The Drucker Difference

Reflecting on Prahalad Reflecting on Drucker


Peter Drucker liked to ask all kinds of penetrating questions, but in the end, none cut to the core as much as this: "What do you want to be remembered for?"

Among those who surely could have answered with great conviction was C.K.Prahalad, who passed away last week at the age of 68 following a brief illness. Although I didn't know Prahalad well, my interactions with him left a strong impression: He was a man as gracious and good-humored as he was stimulating and smart.

Among management scholars and practitioners, Prahalad was a giant. An expert on corporate strategy, he advised major companies across the globe. With Gary Hamel, he coined the term "core competencies." Perhaps his most lasting legacy will be his pioneering work in identifying the poorest of the poor as an untapped market worth as much as $13 trillion. Underlying this insight was Prahalad's deeply held belief that every business must have a social purpose as it produces a profit.

Not surprisingly, given his extraordinary intellect and influence, The Times of London ranked Prahalad, a professor at the University of Michigan, as the leading management mind in the world.

But tellingly, Prahalad placed another name at the top of his own list of the most important contributors to the field. "We have to pay attention to Drucker," he told an audience in Vienna last fall. "No other person has had as much of an impact on the practice of management."

Drucker Distilled

From there, Prahalad deftly distilled Drucker's decades of writing, an exercise that felt a little like Stephen Hawking breaking down the theories of Albert Einstein or Albert Pujols analyzing Babe Ruth's swing. The intent, Prahalad explained, was to challenge academics to reconsider the ways in which they research and teach management. Drucker, Prahalad couldn't help but observe, was so scorned by his business school colleagues that it's a wonder he ever got tenure.

Yet the handful of lessons Prahalad shared that day weren't just applicable to those trapped in the ivory tower; he offered plenty for executives to chew on, as well.

The first thing that characterized Drucker's work, according to Prahalad, was its constant focus on the future. "It's all about 'next practice,' not 'best practice,' " he said. To figure out what lies ahead—that is, what companies should be doing, not what they are doing—"means you have to amplify weak signals," Prahalad added. "You have to see new patterns, both of problems and of opportunities."

For his part, Drucker maintained that he never predicted the future. Rather, he said, "I just look out the window and see what's visible but not yet seen"—an orientation that makes a lot of sense for thinkers and doers alike.

A second quality of Drucker's that Prahalad highlighted was his emphasis on results. "Good words are not enough," Prahalad said. "You must perform." Or as Drucker himself put it: "The best plan is only good intentions unless it degenerates into work."

"Action Bias"

When Drucker would get together with a consulting client, he'd often end the session with a challenge: "Don't tell me you had a wonderful meeting with me. Tell me what you're going to do on Monday that's different." How many of our own meetings end with what Prahalad called "an action bias"?

Drucker's conception of leadership also caught Prahalad's eye. Drucker, he stressed, was interested in the tasks of leaders, not their personalities. And the ultimate task is unmistakable: to lift all of those in the organization to higher heights. Today, said Prahalad, the central question is, "How do you influence people who are…knowledge workers—not people who will be pushed around because you have power?"

Another attribute of Drucker's to which Prahalad pointed admiringly was the way he would "look beyond the corporate world" to art, sociology, history, theology, literature, and a host of other subjects to help shape his views. "He was a master at synthesis," Prahalad said. Although few can match Drucker's erudition, the message was plain: Most of us would do our jobs better if we stepped outside their limited confines and drew on other areas for information and inspiration.

The trick is to do this without getting tied up in knots. Indeed, as Prahalad remarked, Drucker had a trait that all of us, whether we're college professors or corporate managers, would do well to emulate: communicating clearly. "Peter tried very hard to make ordinary people understand nuanced, complex ideas," Prahalad said, noting that most of us, by contrast, take simple ideas and make them needlessly complicated.

Shared Values

Prahalad went on to explore several other themes, including the weight that Drucker placed on innovation and entrepreneurship. But one in particular jumped out at me: Drucker "had constancy of values," Prahalad said.

Many of these values Prahalad shared. Some have criticized Prahalad's assertion that the most impoverished people on the planet represent a lucrative market. But this notion was rooted in the unwavering principle that social responsibility lies at the heart of every business. "The bottom line is simple," he wrote. "It is possible to 'do well by doing good.' "

As he concluded his talk, Prahalad called Drucker "a gift to the world." So, too, was Coimbatore Krishnarao Prahalad.

Wartzman
Rick Wartzman is the executive director of the Drucker Institute at Claremont Graduate University.

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