How Drucker Can Make You a Better Manager*
Peter Drucker is known as “the Father of Modern Management.” He was certainly different than other management gurus. And by the way, he didn’t like that description of his work. His own choice was “social ecologist.” In case you are wondering, a social ecologist studies how societies interact and organize themselves. But there is a little more to it. Social ecology was a theory founded by an author by the name of Murray Bookchin. Proving that the conservative Drucker harbored no prejudices, Bookchin was not only a socialist, he was an anarchist. His theory is based on a reconstructive, ecological, communitarian, and ethical approach to society. Maybe this is why Drucker differed so much in his consulting approach from other giants in the field, and in fact from just about any other management consultant. His methods of analyzing issues, solving problems, and making recommendations were far from theirs. These differences start even with the basic organization of the consulting practice, the services performed, and what Drucker demanded of his clients, and perhaps most importantly an emphasis on questioning clients rather than providing answers. In my own study of Drucker’s consulting I found that any manager can adapt Drucker’s consulting methods to his or her own practice of management.
Drucker’s Strange Non-Consulting Ways
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 Trials of Being a Drucker Client
I heard once that the manner in which Drucker 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 represented what they did and their detailed solution and recommendations. We were instructed exactly what we were to do to execute their recommendations, although of course the answered questions. Drucker, on the other hand, did none of that. He would begin with his asking us questions which we were expected to answer. In the process, we had to think through logically to answer and along the way generated solutions which we would have otherwise completely overlooked.” The clients obviously learned a great deal in the process.
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 founded and had the honor to be president for five years, told me that every year he would visit Drucker in his home multiple times and Drucker would ask him questions about various issues regarding the developments of his many businesses and foundations. However, though he asked questions and just by asking him opened new insights which guided him what to do, Drucker never once told him how to do anything.
Do the Most Difficult Thing --- Think!
Although Drucker was well aware of the use of many innovative methodologies developed almost yearly by hundreds of students and academicians 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 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. And he developed few such gimmicks of his own.
Beware “Breakthrough” Systems
Drucker was well aware of new fads 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 and as whether it made sense to employ them.
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 briefly took hold in the U.S. in the early 1980s. He was highly suspicious of all methods which Fortune Magazine once termed “management by fad.”
When organizations joined the participatory management, fad based on Douglas McGregor’s research and his concept of Theory X verses 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 by almost everyone previously. He discovered 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 the manager to simply mandate: “Do this!”
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, at the time president of the University of Buffalo embraced and adopted participatory management almost completely 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 an academician. 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 he 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 himself wrote: “In the end I wasn’t very good at being a president.”
Feelings are Frequently More Important than Numbers
Drucker insisted on measures in just about everything, but the results were to be considered informational, and he avoided decision making by numbers whereby the decision was made for the manager by simply inputting certain data considered crucial into a software program, turning on a computer, and having the instructions on what should be done magically appear. He pointed out although one could gather data on thousands of businesses, even the weather the information was insufficient. Designing software based on your extensive data, you 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 when the young Captain James T. Kirk of Star Trek fame, faced with an unsolvable academic problem as a cadet at Star Fleet Academy, confounded his instructors by solving it. He had simply entered the computer lab at night and reprogrammed the computer.
Drucker maintained that computer generated answers were still inferior to using the human brain, thinking through everything and making a “gut” decision based on available information, personal experience and knowledge of the nature of the unique personnel involved in the situation. He noted that personal knowledge or instinct of one vital factor might well be decisive and that the computer might 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 managers to make “gut” decisions, but these gut decisions were made with the brain. The brain was a better device than a computer and its associated software by itself for decision making.
The application of Drucker’s consulting, or managerial principles were based on only three basic principles:
- Questioning everything
- Using the brain rather than formula or fad as your primary aid
- Gathering all the information you can including from computers, but making your own decisions
*Adapted from Peter Drucker on Consulting: How to Apply Drucker’s Principles for Business Success published by LID in 2016.