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Remembering Peter Drucker

Father of management theory termed business gurus “charlatans”

The most influential management thinker of the past century would have reached his centennial birthday this week. Amongst all the praise in the media and the good-natured memorials to his legacy across academic departments worldwide, one could almost forget that Peter Drucker led a life that was far from unambiguous. In fact, his ideas remained controversial throughout his life, and the thinker himself turned his back on the business world towards the later decades of his career.

 
Nevertheless, the Viennese intellectual who migrated to the US in the 1930s is today believed to have laid the foundations of management as a discipline. It was he who first formulated the idea that the management of people, resources and organisations required certain guidelines, skills and tools. In other words, Drucker’s work rendered management an actual profession, while at the same time offering a toolkit for leaders to govern complex organisations and companies which were facing increasing globalisation.
 
After his death in 2002, the 92-year-old Professor of Management left an impressive legacy archived in 40 books, as well as a controversial image of a management guru who never quite fit in.
 
In his groundbreaking works, Drucker describes in detail the organisation of humans in modern society – and his analyses have changed the way we think about management. His thoughts are as challenging today as they were in the 1950s.
 
Due to his preoccupation with human behaviour rather than the behaviour of commodities, one of the thinker’s main arguments was that a company should strive to become a community and a place in which its employees could achieve fulfilment with their lives. Also, the priority of a firm should be to satisfy its customers – and making a profit should only be a means to this end.
 
For Drucker, management was about more than just crunching the numbers – it was about relationships and how to bring out the best in people. His writing crossed disciplinary boundaries: he wrote about politics and society as much as he did about business; and he was inspired by philosophical and religious thought as much as economic theory.
 
As a result, his theories were often been dubbed unscientific and superficial by many of his contemporaries. He was never properly accepted in the business school world of his time, with his colleagues rejecting his theories as lacking scientific proof or quantifiable research. He was, some said, more of a writer than a scientist. More recently, even the head of the Peter F. Drucker Graduate School of Management claimed that Drucker was a “brand in decline”.
 
The thinker’s exclusion from the ranks of his contemporaries was not only due to his pioneering work and the fact that his ideas stood out from the mainstream of publications: Drucker was also deeply critical and unafraid to point his finger at managers’ shortcomings and faults.
 
His groundbreaking analysis of General Motors which resulted in the famous work “Concept of a Corporation” condemned the company’s customer and employee relations, for instance, and didn’t go down very well with GM’s management.
 
It was not just Drucker’s critical mind, but equally his straightforward sense of humour and unafraid personality that made him stand out. His executive classes at New York’s Graduate School of Business were so popular the school had to drain its pool to make enough space for the audience. And when inviting colleagues to a long meeting at his private home, he suggested skinny dipping in the pool as an appropriate way to spend a break.
 
Reflecting on his own legacy, and asked why he didn’t appreciate being referred to as a Management Guru, Drucker concluded that people are “using the world ‘guru’ only because ‘charlatan’ is too long to fit into a headline.”
 
Drucker finally turned his back on the world of commercial business. While he continued to believe in the free market system until his final days, he raised doubts about capitalism as a way to a better society. His conviction that private companies had a wider responsibility for the world around them was tested in the 1980s: he began to feel that greed and self-interest were dominating global companies, and that they no longer offered a space for community and social values.
 
He especially condemned CEO compensation in corporations that were laying off workers, and described Wall Street traders as “pigs gorging themselves at the trough”. This disenchantment with the corporate world led him to stress the importance of volunteering as a route to self-fulfilment, and he eventually devoted himself to consulting in the non-profit sector.
 
Nevertheless, Drucker is today regarded as the most influential management thinker of the 20th century. Amongst other things, he predicted the rise of Japan to economic power status, the development of the information society and the importance of privatization, decentralization and marketing.
 
He pioneered the a toolkit for managers and established the profession as a specialist discipline by pointing out that companies were not only responsible for the handling of goods, but most importantly for the management of human beings.
 
Deeply insightful, open-minded and unafraid to challenge established categories, Drucker was throughout his life a controversial thinker. For those who are curious about Drucker’s thoughts and ideas, the Drucker Institute at the University of Claremont offers daily pieces of his wisdom which, regardless of whether or not they are still useful today, certainly offer some food for thought.

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