Business Gurus: The Masters of Management

Peter Drucker: “The man who invented management”

Peter Drucker: The man who invented management

When he died in 2005, the respected Bloomberg Businessweek magazine lauded him as ‘the man who invented management’ – high praise indeed for someone who had devoted his life to the study and improvement of the practice of management[i]. During his lifetime, Peter Drucker wrote over thirty-nine books, which have been translated into a number of different languages and many of the thoughts and ideas contained within them have now passed into accepted business wisdom and practice. His influence was profound on some of the major corporations of his day, together with a number of prominent business and political leaders, which spanned such household names as, IBM, Proctor and Gamble, Intel, and also included the likes of Jack Welch at GE and British Prime Minister, Winston Churchill. His influence is still felt today.

The 'Guru's Guru'

Drucker was one of those rare examples of someone who became a legend in his own lifetime and more than deserving of the epithet, ‘management guru’.  Indeed, he was probably the first management guru of the post-war era. As the Businessweek obituary proclaimed, “[he] was the guru's guru, a sage, kibitzer, doyen, and gadfly of business, all in one. He had moved fluidly among his various roles as journalist, professor, historian, economics commentator, and raconteur. Over his 95 prolific years, he had been a true Renaissance man, a teacher of religion, philosophy, political science, and Asian art, even a novelist. But his most important contribution, clearly, was in business. What John Maynard Keynes is to economics or W. Edwards Deming to quality, Drucker is to management.”[ii]

From Austria to the USA

He had been born in post-war Austria and then moved to the USA after a brief spell in England.  Becoming a US citizen during the Second World War, he taught at a range of colleges across the country, finishing at Claremont College in California, where the Drucker Institute is to be found to this day, which bears his name and continues to keep alive and further his legacy.  Such was the energy of the man that he continued to teach and offer consultancy well into his nineties. He died at the ripe old age of ninety-five, just a few days short of his ninety-sixth birthday.

Front Office/Back Office

Whilst his legacy is significant, the following are just a few of the areas upon which he focused and wrote about in his many books. Firstly, writing in the post-war era of large corporations, Drucker was interested in encouraging businesses to focus on their core activities.  He differentiated between the front office, which dealt with the customer, and the back office, where all the ancillary and support tasks were completed, such as HR and payroll.  Thus he was an early proponent of outsourcing non-core activities, and, as such, he predicted a trend that was to become synonymous with the era of globalization.  He also believed that the large behemoth businesses of the day, such as P&G and GE, needed to decentralize their decision-making, so that they retained their marketing and innovative edge.

The Knowledge Worker

Secondly, in an age when making things was still seen as the cornerstone of a strong economy and the main task of industry, Drucker was ahead of his time in championing the idea of the ‘knowledge worker’ and the corresponding growth of the knowledge economy.  In this respect he foresaw the rise of businesses such as Apple, who do not manufacture the physical product, but derive their profit from their knowledge assets or intellectual property.  Likewise he outlined the type of worker needed to service the growth of this type of industry and the skills required to compete in this new economy.

Leadership is doing things right ...

Finally, it would be remiss of me not to emphasise Drucker’s ideas on leadership and management.  It is Drucker’s words that are often quoted by many students when they are writing an essay on that perennial topic of the distinction between leadership and management: "Management is doing things right; leadership is doing the right things." Whist his views were very much more detailed than this, it does serve to highlight his belief that the employees were the organization’s most important asset and that they needed to be valued and developed. He believed that management was a skill that could be taught and developed and he scorned the idea of charismatic leadership, claiming that it enabled despots like Hitler, Stalin and Mao to mislead people.  Instead he emphasised the importance of good leadership that was centred on a core mission, focused on the customer and delivering quality through innovation and good service.

There is much more that could be said about Drucker, this brief article is intended to give you just a flavour.  I would encourage anyone to dip into his extensive corpus of books to gain more of an idea of the breadth of subjects that he addressed during a long and prolific lifetime.  One of the best places to start is ‘The Essential Drucker’, which is published by Collins Business Essentials and distils some of his key ideas that spanned a writing career of over sixty years. To finish, I thought I would leave you with some of the other more memorable quotes from this truly remarkable man:

“The best way to predict your future is to create it.”

“Innovation is the specific instrument of entrepreneurship...the act that endows resources with a new capacity to create wealth.”

“Leadership is not magnetic personality, that can just as well be a glib tongue. It is not "making friends and influencing people", that is flattery. Leadership is lifting a person's vision to higher sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations.”

“A manager is responsible for the application and performance of knowledge. ”

“So much of what we call management consists in making it difficult for people to work.”

Written by Will Trevor, Founder and Training Consultant at Windsor Training
Email: will.trevor@windsortraining.net

Picture Credit: By Jeff McNeill [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

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[i] Byrne, J, & Gerdes, L. “The Man Who Invented Management”, (2005), Online at: http://www.businessweek.com/stories/2005-11-27/the-man-who-invented-management. Accessed July 31, 2014

[ii] Ibid.