Lessons From Peter Drucker

Become a Better Manager Using Drucker's Consulting Methods: Questions, Brains and Guts

William Cohen, Ph.D.
Posted: 03/01/2016

Peter Drucker is known as "the Father of Modern Management." He was certainly different than other management consultants. He differed greatly in his consulting approach from other giants in the field, and in fact from just about any other management consultant.

These differences start with the basic organization of his consulting practice, the services he performed, what he demanded of clients, his focus on thinking through to solutions over more rigid structured approaches, an emphasis on questioning clients rather than providing answers, his emphasis on managerial gut decisions over misuse of numbers and overreliance on quantitative methods are just for openers.
You cannot only become a better management consultant by adopting his principles, but a better manager as well.
Drucker’s Strange Non-Consulting Organization
Years ago a writer wondered at the fact that of all the world famous "brand name" consultants, Drucker alone did not establish a major consulting organization supporting or expanding his activities. There was and is no "Drucker Consulting Group" or "Drucker and Associates," or "Drucker LLP or LTD."

McKinsey and Company, the largest consulting firm in the world with 9000 consultants worldwide had its greatest growth under Marvin Bower. Bower and Drucker were friends, but Drucker did not follow Bower’s lead to build a worldwide consulting organization. Call Drucker’s telephone number and you didn’t get a receptionist or a secretary unless you dialed his university number. In his consulting practice he had neither. He even answered the phone himself.
Drucker lived until 2005 - technologically modern times. However, he never had a website either. If you wanted Drucker, you either were his student, a client, or looked him up in the phone book. He may have actually turned more potential clients away than he accepted.
Drucker thought of himself as a scientist, even if he did not use the word in his description of himself. He painted a word picture of working in his "laboratory" as a consultant which he said was a business or corporation. And if he wasn’t wearing a white coat, his imagery may have encouraged your mind to dress him in one anyway. It did mine.
This mindset explains a lot. Since Drucker clearly thought of himself as a scientist, like many scientists, he never coveted great wealth. Instead of billing his clients $10,000 a day, he required that they donate $10,000 a day to a foundation he founded. He lived in a modest house in Claremont, California. He drove a relatively inexpensive car. He mowed his own lawn. He did not wear $1000 suits or expensive watches and his shoes were not high fashion and did not cost a fortune either.
The Most Difficult Aspect of Being a Drucker Client

I heard once that the manner in which he provided his consulting was the most difficult thing about being a Drucker client. One Drucker client that I spoke with expressed it this way: "We had been accustomed to hiring consultants to whom we told what we wanted done or to solving a specified problem. They then went off and returned after a time with mounds of data and reports, and before the time of Power Points, stacks of Overhead foils which presented what they did and their detailed solution and recommendations. Although they answered questions, we were instructed exactly what we were to do to execute their recommendations. Drucker, on the other hand, did none of that. He would begin asking us questions which we were expected to answer. In the process we had to think through logically to get to solutions which we would have otherwise completely overlooked."
The Chinese philanthropist, Minglo Shao, who contributed the money to found the very unusual non-profit MBA-granting graduate school, California Institute of Advanced Management based on Drucker’s teachings (of which I have the honor to be president), told me that every year he would visit Drucker in his home and Drucker would ask him questions about various issues regarding the developments of his many businesses and foundations. However, though he asked questions and told him what to do, he never once told him how to do it.
The Brain is for Thinking, Use It!
Although Drucker was well aware of the use of many innovative methodologies developed almost yearly for analyzing business situations and determining strategies, he made almost no use of them, emphasizing instead thinking through every situation on its own merits. He never taught, "portfolio analysis" with their famous 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 another version of management or business strategy by rote methods.
Drucker’s Caution in Applying "Breakthrough" Ideas
Drucker was well aware of new ideas promoted as breakthroughs, but he was extremely cautious in applying them across the board and without much thought; that is, without thinking through each situation individually.
Although his association and learning of management methods in Japan were much appreciated by him, - and his clients in Japan were quick to adopt Drucker’s methods as well - he did not instantly jump on the bandwagon of "Japanese Management" when it caught on in the U.S. in early 1980s. He was highly suspicious of all methods of "management by fad."
When organizations joined the participatory management fad based on Douglas McGregor’s research and his concept of Theory X versus Theory Y in the early 1960s, Drucker pointed out that McGregor was merely noting that Theory Y - management with significant participation of the managed - was an alternative to the more directive style practiced almost exclusively up to that time.

He underlined what most adopters missed: that McGregor himself had written that his intent was to describe an alternative management style which could 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.
Even Drucker’s friend, and strong supporter, Warren Bennis, a distinguished management expert in his own right, failed to heed Drucker’s cautionary advice not to adopt Theory Y’s participatory management as the answer for all management problems in all organizations. Bennis, who was at the time president of the University of Buffalo, embraced and adopted participatory management in a totally unsuitable environment. According to Drucker, "the result was tremendous excitement but also total failure."
This was one of Bennis’ few major mistakes either as manager or as leader theorist. It probably had one major benefit --- it encouraged Bennis to return to his career as a leadership theorist, author, and teacher. He wrote many books and before died he won many honors in this area and founded the Leadership Institute at the University of Southern California. About his experience in applying Theory Y he wrote: "in the end I wasn’t very good at being a president."
Drucker’s Emphasis on Feelings over Numbers in Decision Making
Drucker insisted on measures in just about everything, but the results were to be considered informational only, and he avoided decision making by numbers whereby the decision was made for the manager by simply inputting certain data considered crucial to a software program, turning on a computer, and having the answer magically appear.
He pointed out that one could gather data on thousands of businesses, including primary factors, even the weather and some elements thought to be relatively insignificant and finally the results themselves that were attained. You could then design the software based on your extensive data. You might claim that by imputing your own situational data you might be able to predict the project results with some high per cent of accuracy, say 92.5 percent.
Drucker maintained that this was still inferior to using your brain, thinking through everything and making your own "gut" decision based on available information, your experience and knowledge of the nature of your own personnel and organization.
He noted that your knowledge or instinct of one vital factor might well be decisive and that the computer would never pick it up. He reminded his students and his clients that though a certain program might give accurate outcome results 92.5 per cent of the time, for 7.5 per cent of the time the results were 100% inaccurate. He recommended managerial gut decisions after considering all the information that could be obtained. Drucker told his clients to make "gut" decisions, but these gut decisions were made with the brain. The brain was a better device than a computer and is associated software by itself for decision making.
Drucker’s consulting, or managerial principles were based on only three basic principles:
• Questioning everything
• Using the brain rather than formula or fad
• Gathering all the information you can, but making your own decisions

*Adapted from Peter Drucker's Consulting Principles: And How to Apply Them for Business Success to be published by LID in June 2016.
William Cohen, Ph.D.
Posted: 03/01/2016

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