How Drucker Became the Father of Modern Management

Peter Drucker is known as “the Father of Management” or “the man who created management.” But why? Other experts have contributed significantly to management including many ancients. While credited for their accomplishments, they were not given such heady accolades. Is there really a “Drucker Difference?”

Notable Ancients Who Predated Drucker

Two thousand years ago, Xenophon wrote books on management and leadership. Before becoming a writer he was a junior officer elected as their leader to bring 10,000 Greek warriors hundreds of miles over harsh terrain out of Persia while under almost constant attack from hostile tribes after their commanders had been disarmed and killed by subterfuge. He accomplished this successfully. Xenophon’s feat resulted in a model for successful withdrawal still studied by military leaders. Later, Xenophon wrote many books including one Drucker called “the first systematic study of leadership.” Although few recognize it, Xenophon also created what is known and popularized today as “servant leadership.”

The Babylonian King Hammurabi developed a management code consisting of a compilation of 282 laws that regulated conduct in a wide variety of business dealings, behavior, punishments, interpersonal relations, and more. Another Babylonian King, Nebuchadnezzar, developed the concept of incentives to promote productivity. Neither were recognized for their management contributions though what they did greatly affected both the ancient world and modern developments.

In China, the Philosopher-General Sun Tzu developed subdivisions and rankings of authority, represented by colors to facilitate control and coordination, and boost morale. He did this 2000 years before Max Weber developed his theory of bureaucracy.

Drucker’s Strange Ways of Helping Organizations

Drucker thought of himself as a scientist, even if he did not use the word in a self-description. He called any business for which he consulted, his “laboratory.” If he wasn’t wearing a white coat, his imagery might have encouraged your mind to dress him in one anyway. He thought of management as a serious science, but as to analysis of numbers only a single part. Much as Hippocrates developed an oath that medical doctors still swear their allegiance by, in modern times Drucker challenged managers to ascribe to certain basics.

For example, he insisted on integrity and social responsibility as requirements of good leadership. Whereas other experts wrote that leaders should have integrity and should demonstrate social responsibility, Drucker said that for successful leadership, a leader must have integrity and must demonstrate social responsibility. And he berated those past, present, and future that failed to do this.

His professional mindset explains a lot. Since Drucker thought of himself as a scientist, he didn’t covet great wealth. He required only that his clients donate to a foundation he founded. Some he didn’t charge at all. He lived in a modest home in Claremont, California. He drove a relatively inexpensive car. He mowed his own lawn with a mechanical mower. He did not wear $1000 suits or expensive watches and his shoes were not high fashion.

The Trials of Being a Drucker Consulting Client

The manner in which Drucker provided his consulting was frequently uncomfortable. One client described it this way: “We had been accustomed to hiring consultants. We told them what we wanted and defined a specified problem. They then went off and returned after a time with mounds of data and reports and made formal recommendations. We were instructed exactly what we were to do and they answered any questions we might have. Drucker did none of that. He would begin with asking us questions about the problem we wanted solved. We were expected to answer these at the first meeting. In the process we had to think through the problem and this alone frequently generated potential solutions which we would have otherwise overlooked.” Drucker said that his clients were the real experts, and understood the issue far better than him.

The Chinese philanthropist, businessman, and now Canadian citizen, Minglo Shao, visited Drucker in his home frequently and would ask for advice on management issues. Drucker responded by asking him questions. Discussing Drucker’s questions opened new insights which helped him find good solutions. Drucker never charged him or told him how to do anything. This collaboration led to Drucker allowing Minglo to use the Drucker name in establishing his management schools based on Drucker’s principles throughout China.

The Most Difficult Process --- Thinking

Although Drucker was aware of the use of the many innovative methodologies developed by others for analyzing business situations and developing strategies, he made almost no use of them. Instead, he emphasized thinking through every situation on its own. He didn’t teach the well-known “portfolio analyses” with their quadrants of cash cows, shooting stars, problem children, or dogs as developed by the Boston Consulting Group (BCG) or the GE/McKinsey nine cell version, or any other version of management or business strategy by rote methods.

Drucker’s Use of “Breakthrough” Formulae or Systems

Drucker was aware of new systems and theories being promoted, but he was extremely cautious in applying them without thinking through each situation individually as to whether it made sense to employ any system in a particular case.

When organizations adopted participatory management based on Douglas McGregor’s research and his book describing Theory X versus Theory Y in the early 1960s, Drucker pointed out that McGregor had noted that his Theory Y management with significant participation of the managed was an alternative to the more directive style practiced almost exclusively at the time. Drucker revealed what almost all adopters of Theory Y missed: that McGregor himself had written that his intent was to describe an alternative management style which might give better results under certain circumstances, and that research should be accomplished to uncover exactly what these circumstances were, not that participatory management was the universal answer in all situations. Sometimes it makes sense for a manager to simply direct subordinates to take certain actions.

Although Drucker’s association and study of Japanese management methods was extensive, and his clients in Japan were quick to adopt Drucker’s ideas, he did not instantly jump on the bandwagon of “Japanese Management” or recommend it when it was introduced in the U.S. as the ultimate in the early 1980s. He pointed out that conditions and traditions in Japan were different and copying their exact application was unlikely to work in the U.S. Like Fortune Magazine, he was highly suspicious of what it had termed “management by fad” in an article written about that time.

Liberal Arts More Important than Numbers Alone

Drucker insisted on measurement of all results, but the results were to be considered only inputs, and he avoided decision making by numbers whereby the decision was made by simply inputting certain data considered crucial into a software program, turning on a computer, and having the instructions on a strategy appear as if by magic. He pointed out although one could gather situational data on thousands of businesses, even the weather in each case, the information was invariably insufficient. Designing software based on your extensive data, you could input data unique to the situation and be able to predict the project results with some high percentage of accuracy, say 92.5 percent. He probably agreed with the young Captain James T. Kirk of TV’s Star Trek fame. Faced with an intentionally unsolvable academic problem as a student at Starfleet Academy, Cadet Kirk confounded his instructors by solving it. The future Captain Kirk had “solved the problem” by entering the computer lab at night and reprogramming the computer. Drucker recommended management as a liberal art.

Drucker maintained that computer-generated answers were inferior to the human brain thinking through the issue and integrating available information, personal experience, and knowledge of the availability of those who would be the ones doing the planning and implementation. He noted that personal knowledge or instinct of one vital factor might well be decisive and that a computer might never pick it up. He reminded us that though a certain program might give accurate outcome results 92.5 percent of the time, that meant for the other 7.5 percent of the time the results were 100% inaccurate. He recommended rapid decisions after considering all the information that could be obtained within the time available.

Drucker died in 2005 yet his ideas are still studied in universities worldwide and most are practiced internationally. However, these seemed always based on uncomplicated basics:

• Asking and answering the important questions of yourself and others
• Thinking, rather than depending on formulae
• Practicing the ethics and integrity of doing the harder right rather than the easier wrong
• Practicing social responsibility
• Being where the action is

These constitute the Drucker Difference.

*Syndicated Internationally