Sunday, August 22, 2010



“Because a manager can profit both from the ideas and from the discipline of mind by which they are formulated – Alan M. Kantrove”

Mention the name of Peter Drucker and many an ear in the business forest stands up straight. Over the years little of concern to bysiness has fallen outside the extraordinary range of his interests, and few of those interests have escaped thoughtful, often classic exposition in his six-foot shelf of articles and books.

Such productivity is itself a professional achievement of the first order. Add to it, however, Drucker’s countless appearances in executive seminars, lecture halls, conference rooms, and classrooms; his extensive labors as a consultant; and his facility for expressing complex ideas simply and elegantly. No wonder the mention of Peter Drucker commonly guarantees attention. People listen because they respect the authority of experience – distilled, analysed, articulate and are eager to profit by it.

There are those, of course, who do not listen so attentively to Drucker. Some, especially within the academy, think him more journalist than scholar and more glib generaliser than journalist. They slight his research as no research at all and his ideas on management as unstructured and (worst sin of all) unsystematic. To their minds Drucker is an armchair philosopher who lacks practical credentials as a doer.

At one extreme they believe him neither interested nor competent on the myriad details of day-to-day business operations and therefore question the authority his judgments regularly carry.

At the other extreme Drucker’s most attentive followers, like those of many a populare thinker, grant him too much. Out-of-context snippets from his writings or conversations often app;ear in support or conversations often appear in support of contentions that he himself does not endorse. Similarly, overly ardent disciples reduce the complexity of his thought to a handful of canomical ideas that, in their doctrinaire simplicity, do violence to the original.
In point of fact, Drucker’s works lend themselves to these excesses of reaction. By relying in places on such suggestive – but incompletely wrought notions as the “contribution coefficient”. Drucker offers fertile ground for scholarly naysaying. Conversely, by striving for a pithy, ep;igrammatical style, he often plays into the hands of those who are too easily satisfied with easy phrases and hall-truths. Indeed, it is rhetorically memorable to assert, as Drucker does, that “most sales training is totally unjustified. At best it makes an incompetent salesman out of a moron”. But it also gives ready encouragement to the cavalier dismissal of a perennially knotty problem.

Sloganeering of either sort, wherever it occurs, is double-edged. Used with care, it allows for a quick, incisive thrust of thought; in the wrong hands, it becomes an effective weapon of simple or fuzzy mindedness.

The influence of ideas:
For the most part, however, Drucker’s books command attention neither for their stock of aphorisms nor for their mastery of technical computation. Ears perk up, rather, to catch the wisdom of Drucker’s animating ideas. So generally, receptive has their audience been and also longlived their influence that many of his ideas have become part and parcel of today’s commonsense understanding of business. As a result, it is snot easy even in retrospect to achieve critical distance from them.

How remarkably familiar has become his vision of modern industrial society as constituted by large-scale organizations. How obvious it now seems to regard business as the representative institution of that society, and how matter-of-fact an exercise it now is to apply to business the same models of analysis appropriate to any social or political institution.

Was there a time when people did not regularly ask of individual businesses their source of legitimate authority, their principle of organization, or their pattern of leadership ? Was there a time when management felt little need to address employees’ concerns for status and function, to fit “knowledge workers” into established structures of decision making and command, or to achieve effective communication in and among managerial levels ?

For that matter, did business ever fail to take seriously the recruitment and development of executives, the proper role of boards of directors, or the special needs of companies at different stages of development ? Did it fail to pay adequate attention to the internal logic of work itself or to those techniques by which managers can become both more efficient and more effective ? Did it ignore such fundamental questions as the nature of the business it was in and of the customers it served ?

Today it is hardly frontpage news, at least within the business community, when some executive offers a defense of profits as an objective measurement of economic performance or as an essential premium against the risks of the future. Nor is it shocking to hear a call for management to think through long-term strategy as well as to set short-term objectives. A voice recommending that business plan for innovation is no longer a voice crying out in the wilderness. That non of this seems novel – that it is all quit commonplace – is prime evidence of Drucker’s pervasive influence, direct or indirect, on managerial thought. By and large these ideas have long since won acceptance as kind of professional folk, wisdom. They have become home truths.

Drucker’s contribution:

To be sure, few of these ideas are original with Drucker. Even fewer have escaped treatment in at least a dozen management texts. Yet there is always a value in reencountering sensible thought sensibly put. But if the substance of his books is neither original nor unique, if what they offer at best is no more or less than the readily paraphrasable content of his thinking, why bother to read them ? Why, in short, read Peter Drucker and not a streamlined digest of his major ideas ?

The answer is simple: Drucker’s real contribution to managerial understanding lies not so much in the cash value of his ideas as in the rigorous activity of mind by which they are formulated. One can learn more and more deeply from watching him think than from studying the content of his thought.

Integration of thought:
Most critics assess the substantive contribution of Drucker’s works to the discipline of professional management. Yet Drucker’s thought is far more valuable for its manner than its matter. First, there is its decidedly integrative quality. To understand essential management tasks. Drucker shows by example that it is necessary to view them in context. One must appreciate the historicaluniverse of traditions and structures out of which they emerged and the culturaluniverse of norms and values in which they participate. One must know about the many forms capitalism has taken over time and the particular strengths of each form. One must be aware of competing economic ideologies and their underlying premises. In short, one must be able to recognize major shifts inhuman aspirations as well as the fixed limits of human adaptation.

Then, too, one must be sensitive to the speed, direction, and logic to those technological and demographic changes that will make the future very different form the present. One must, at the same time, carefully ascertain what in the present will last. Not least, one must supplement an understanding of management with insights from other fields of knowledge, regularly comparing it with the summary experience of other large-scale organizations and different cultures

When brought to bear on even the thorniest of problems, such integrative thinking allows Drucker to identify the key assumptions at issue, to establish their mutual relations, and to evaluate them. Consider, for instance, his lengthy discussion of the curse of bigness in Concept of the Corporation. Here Drucker avoids the needless excesses of those who argue either for or against bigness in business by tracing their operative premise to its root and showing it to be grossly misconceived.

Consciously or not, most opponents of bigness, Drucker finds, are in fact tilting against the windmills of monopoly; its defenders, protecting them. Now, monopoly and bigness are, of course, not the same thing and ought not be confused. But Drucker is able to track the point of issue still further to challenge its historical as well as its logical basis. “This theory of monopoly”, he writes, “which is still widely accepted as gospel truth, rests on the assumption – correct in the eighteenth century – that supply will always be limited, whereas demand will always be unlimited”.

This assumption does not always obtain. It may be true of some, but is not necessarily true of all, historical periods. Because Drucker knows the traditional meaning of monopoly and the structural differences between past and present economic conditions, he can refocus an errant discussion.

Other examples suggest themselves. In The End of Economic Man, Drucker comprehends the sense behind the seeming irrationality of fascism’s appeal by acknowledging the historical context of its ideas. According to Drucker the Great War and the Great Depression destroyed Europe’s already shaken belief in an economic system that was autonomous, governed by rational laws, and productive of both freedom and equality. With the inherited rational world view of classical economics shown to be bankrupt, fascism took powerful hold on the Europian mind precisely because it was “irrational” – that is, it offered a non economic basis for individual status and rank. Drucker reaches the heart of this twentieth-century phenomenon by appreciating the sudden irrelevance of earlier systems of thought. A similar understanding characterizes his many obiter dicta on Marxism as well as his famous essay on John Maynard Keyness. Drucker writes:

“Keynes’ work was buildon the realization that the fundamental assumptions of nineteenth-century laissex faire economics no longer hold true in an industrial society and a credit economy. But is aimed at the restoration and preservation of the basic beliefs, the basic institutions of nineteenth century laissez fair politics, above all, it aimed at the preservation of the autonomy and automatism of the market. The two could no longer be brought together in a rational system; Keynes’s policies are magic spells, formulae, and incanitations, tomake the admittedly irrational behave rationally”.

Much the same is true of Marx’s thought , which treats as a universal given conditions limited to a brief phase of industrial development.

(Excerpted from the book titled – Becoming a manager by Linda A Hill)

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