Why Managers Still Follow Drucker’s Ideas*

Posted: 02/13/2017
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Many famous managers from industry and researchers from academia have passed on since making their names and contributions. Yet while we honor what they have contributed during their careers, many of the techniques and systems they have developed have faded and fallen into disuse. Consider even those once so pervasive that millions of managers in every industry were taught and practiced at least some of the principles of these past contributors. Academics rushed forward to embrace these cutting-edge systems and to conduct additional research into still unexplored aspects and to teach it to their students. Where have they gone?  What happened, for example to McGregor’s Theory X vs. Theory Y and “Participation Management” or the Blake-Mouton Managerial Grid?? Are Bruce Henderson’s portfolio management techniques still in common use other than academic concepts? In the early 1980’s Japanese Management was all the rage. As it morphed into TQM it faded and today it has largely disappeared. Even TQM is rarely put forth as the single concept needed for success. While other management principles have vanished entirely, only Peter Drucker’s management ideas seem to pervade and go on. I don’t mean a single concept which Drucker promoted such as MBO (Management by Objectives). Actually, MBO wasn’t his. He merely promoted and defended it. Yet our trust in the Drucker name and his ideas are largely in place. There remains a “Drucker Difference” that we should note carefully and can follow with confidence to help us with practical application of Drucker’s theories. Perhaps the fact that this is so, among all the great management thinkers over the last hundred years is the greatest “Drucker Difference.”

My Personal Experience with the “Father of Modern Management”

I was Drucker’s student in the later 1970’s as I studied for and completed my PhD at what was then Claremont Graduate School of Management, today the Peter F. Drucker and Masatoshi Ito Graduate School of Management at Claremont Graduate University. Peter was a unique genius. He was known among his students especially for his wit, his openness in responding the questions raised by his students and his very different interpretation of all things having to do with management.

Was Drucker Against Participatory Management?

For example, at a time when the favorite management approach had only recently shifted to participatory management as exemplified by Douglas McGregor’s Theory X (traditional authoritative management) versus Theory Y (management with the participation of those managed) Drucker pointed out that 100 per cent management by Theory Y was never intended by McGregor. McGregor intended and wrote only that both approaches should be examined for use depending on the situation. Also when challenged as to how he (Drucker) could bring his knowledge and experience to bear in so many different managerial situations and environments, Drucker responded that he did not bring his knowledge and experience to bear in any management problem; he brought his ignorance. Later I learned how he did this in a typical logical and organized Drucker fashion. Still despite years as his student and studying his methods, I never once saw him draw so much as an economist’s price demand curve, much less a methodology to classify and predict what businesses or products to promote, and which to abandon. He spoke against any system which excluded the manager’s gut feelings in decision making. He even wrote a case study “The Management Control Panel” to show the fallacy as to why decision making based solely on prime factors such as air speed, altitude, and in-flight attitude in an airplane’s condition of flight would not work for the practicing business manager.

Why Prime Conditions in Anything Should Only Be a Guide

As a former pilot and combat navigator I can assure readers that although these are in fact the basic conditions which the aviator must monitor, these do not always hold for decision making in flight either. I once flew on a combat mission in a modified WW II non-jet aircraft in bad weather during which it was necessary that the aircraft fly in a straight and level attitude for the final few minutes of flight to ensure accurate delivery of a bomb by radar controllers on the ground. Suddenly the oil pressure gauge on the control panel dropped to zero. Normally the engine needed to be shut down at once and other actions need to be taken to avoid calamity. However, I considered additional factors not displayed on the airplane’s control panel. First, there were no audible sounds of engine seizure. Next, our oil pressure gauges were notorious for failing in flight. If the engine failed in flight I would have sufficient time to shut the engine down and to “feather” the prop to ensure reduced drag on the “dead” engine. The weather was bad which was the reason for the necessity of a ground radar controlled drop in the first place. If I aborted the bomb run, I would have to be located by the ground radar and start the run all over again. This was chancy under the weather conditions the request a straight and level run above the weather. All things considered I made the immediate decision to ignore the oil pressure gauge, but to keep one eye on the gauge as I continued my run. As it turned out it was a bad gauge and I had a successful run, which might not have been true if I had assumed that the gauge was correct and I needed to shut the engine down.

The Limits of Any Decision-Making Concept That Disregards Situational Factors

Drucker’s friend, renowned USC professor of leadership Warren Bennis, was once president of the University of Cincinnati. He implemented participatory management decision making with little situational analysis under the assumption that participatory management would always turn out well.  Drucker commented than afterwards there was a great deal of excitement, but ultimate failure to a degree that Bennis left academic management to return to writing and teaching and accepted a professor’s job at University of Southern California where he became both successful and famous, owning up to the mistake he made earlier and agreeing that depending on the situation, a more authoritarian style of leadership decision making might be called for and been more successful.

Another Limitation to Decisions Being Made Totally Without Thinking

Systems can be sophisticated. For example, many computer programs have been developed which input dozens of important variables, much like idea of the Management Control Panel in which the software includes the results from analysis of thousands or more of competitive situations such that an accuracy of 99 percent predictability is guaranteed. In another words, you input the data from your situation using this data into this program and the computer assigns you a strategy based on the conditions of past success.  The output guarantee’s a 99% success rate if the computer-generated strategy is followed. What’s wrong with that? As an input to your judgment, nothing. However, if you follow the software’s instructions blindly and happen to be in that 1% failure from that total success rate, your resulting failure rate on that decision is 100%

Drucker’s Gut Management

Drucker felt that managers sometimes depended too much on quantitative models leading automatically to the correct solution of any managerial problem when they should have used their own gut feelings.” Not that the results from these complex automated systems should be ignored, but that the manager should interpret these results in the same way that I had once interpreted the reading from what turned out to be faulty oil pressure gauge.

What is the Real “Drucker Difference” That Drucker Taught?

The real “Drucker Difference” which causes his ideas to go on and be adapted years after his death and will no doubt cause them to continue out into the future is quite simple. Drucker eschewed the idea of being a guru or concocting any one infallible management system. Rather, Drucker taught us to think.

*Adapted from Peter Drucker on Consulting: How to Apply Drucker’s Principles for Business Success  published by LID in 2016.