Peter Drucker: Mr. Management


By Mike J. Brewster Even the quickest scan of the U.S. business-education landscape reveals hundreds of MBA and executive-MBA programs, thousands of thick tomes on management lessons according to everyone from Abraham Lincoln to Queen Elizabeth 1, and many professions adding continuing-education requirements. It's not a stretch to conclude that the study of management -- as a discipline in and of itself -- is big business today. And nobody has been more central to the creation of management as a subject worthy of serious attention than famed management guru Peter F. Drucker.

Drucker, 94 and still going strong as a (what else?) management professor at the (where else?) Peter F. Drucker Graduate School of Management at California's Claremont Graduate University, has spent his career pondering how business interests, politics, and human nature interact at companies all over the world. The signature trademark of Drucker's nearly 70-year career is the prescient global insight, typically announced in one of his best-selling management books like The Practice of Management or The Effective Executive (although his literary credits include two novels) a decade or two ahead of the advance itself.

FIRST TO SAY IT. For example, when companies like IBM (IBM) were first using "adding machines" that filled up entire rooms in the early 1950s, Drucker predicted that computers would come to define how business was done. A long-time student of both Asian art and business, he served notice in the 1960s of the rise of Japan as an industrial power. And who else but the Father of Management could come up with terms such as "privatization" and "knowledge workers"?

Indeed, Drucker's productivity shows no signs of slowing. In the June, 2004, issue of the Harvard Business Review, Drucker penned the article, "What Makes an Effective Executive." Execs, according to Drucker, should take responsibility for decisions, communicate with rank-and-file workers and mid-level management as much as possible, and become more focused on opportunities rather than problems. Mind-blowing concepts?

Hardly. But Drucker gets credit for being the first to say these same things many years ago. The Practice of Management, in fact, was a groundbreaking business book in that it treated management as a stand-alone corporate function.

SUBWAY DETOUR. Drucker was born in 1909 in Vienna, Austria. His family was uprooted during World War I and eventually made their way to Germany after the war. Drucker found a job as a newspaper reporter in Frankfurt after college, and simultaneously studied for his doctorate in law and international relations. After earning his degree he left Germany for London and a job as an economist for an international bank. The next stop, in 1937, was the U.S. and academia, both of which would serve as Drucker's surrogate homes for the next 60-plus years.

He began his teaching career as professor of politics and philosophy at Bennington College in Vermont. But during a chance meeting with a former colleague outside a New York City subway stop in the early 1950s, Drucker accepted an offer to join the Graduate Business School of New York University, where he stayed for nearly 20 years as a management professor.

There, he helped change the curriculum from one almost solely devoted to quantitative math, statistics, and accounting courses to instead focus on managing workers, organizational behavior, and corporate strategy. Once again, Drucker's timing was impeccable. Business in the early 1960s was growing more complicated, and companies were desperate for smart, third-party professionals who could take a fresh look at an organization and offer advice about a whole host of issues that members of management weren't necessarily experienced in. That included writing computer code, expanding beyond U.S. borders, and finding new ways to beat the competition.

Thanks to Drucker, NYU started churning out hundreds of newly minted graduates who were ready for this new profession: consulting.

COUNTERINTUITIVE INSIGHTS. Drucker's writings, which for many years included a monthly column on The Wall Street Journal editorial page, have always been uncannily ahead of the headlines or satisfyingly parallel with them, which helps explain his immense popularity. Even as executives started to complain about the heavy costs of complying with the financial-disclosure rules of the Sarbanes-Oxley Act of 2002, for example, Drucker had been writing for years about the debilitating "reporting" costs that companies operating in the U.S. faced.

And the recent contretemps over outsourcing? Drucker told a Fortune reporter in January, 2004, that "Nobody seems to realize that we import twice or three times as many jobs as we export."

No subject is safe from Drucker's way of looking at the world. Recent articles have touched on these sometimes counterintuitive, always provocative ideas: Outsourcing doesn't save companies money but improves product quality. The era of American economic dominance is essentially over. India's superior educational system and ability to move people from rural areas to cities means that country poses a much greater economic challenge to the U.S. in the near future than China does.

NEW AREAS OF INQUIRY. Or how about these: Older executives hate computers not because they can't learn how to use them, but because they require that one organize one's thoughts, and because business decisions used to be made on the fly much more often. And it's mid-level management, not shop-floor workers, who are most disillusioned with outsized CEO pay.

Besides his teaching at the Drucker School of Management, which was just Claremont's business department when Drucker joined it in 1971, he largely confines his consulting work today to nonprofits such as universities, hospitals, and churches. This isn't entirely out of desire to help the underdog. According to Drucker's writings, these are three areas where worker productivity is most dismal. Just more interesting management questions to grapple with, for the man who started it all. As part of its 75th anniversary celebration, BusinessWeek is presenting a series of weekly profiles for the greatest innovators of the past 75 years, from science to government. BusinessWeek Online is joining in by adding more online-only profiles of The Great Innovators. In late September, 2004, BusinessWeek will publish a special commemorative issue on Innovation

Brewster is a New York-based writer


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