Business Forum: Happy Birthday Peter Drucker

By Isaac Cheifetz
Published December 9, 2002

Peter Drucker's birthday was Nov. 19; he turned 93. Most people in the business world know him as a management guru. But he's much more than that.

For much of the 20th century, two of the most important ideological figures were Sigmund Freud and Karl Marx -- Freud for his theories explaining the workings of the subconscious (what motivates individuals) and Marx for his theories of class conflict (what drives societies and economies).

Before the 20th century ended, both men were discredited, their theories considered brilliant dead ends, two-dimensional explanations of a 3-D world. Marxist societies routinely resulted in mass executions and moribund economies. Freud is respected as literature, not science -- behavioral therapy and medication have replaced the excavation of the subconscious he advocated.

A strong argument can be made that industrialized societies today are more influenced by Peter Drucker, for almost singlehandedly codifying the discipline of management, and Edwards Deming, for creating Total Quality Management -- the intertwining of quantitative "scientific management" and humanistic "organization development."

Nazism equals Stalinism

Drucker does not have a single paradigm like Freud or Marx or Deming -- he is deeply suspicious of all-encompassing theories. But consider the impact of four of his books:

Drucker first shocked the world in 1939, with "The End of Economic Man," in which he predicted that Nazi Germany and the Soviet Union would become allies. To conventional thinking, this was nonsensical -- what two societies could be further apart than "Far Right" Nazism and "Far Left" Communism?

But Drucker analyzed the organizational, economic and ideological underpinnings of both systems. Each society, he pointed out, was totalitarian and resisted realities that conflicted with their extreme ideologies.

Both valued the state (in the form of the Nazi and Communist parties) above the individual, and were blithely willing to kill millions of their citizens to realize their vision. Both were decimating their economies to build war machines, and to feign successful societies.

Like two hallucinating psychotics, Drucker suggested, they would inevitably be more comfortable with each other than with societies in the middle of the political (and psychological) spectrum. The specific ideologies mattered less.

Several months later, in August 1939, Germany and the Soviet Union signed the Nazi-Soviet Non-Aggression Pact, agreeing not to fight each other in case of war, and to split Poland between them. A week later, on Sept. 1, 1939, Hitler invaded Poland. Stalin attacked Poland that same month and, in 1940, invaded the Baltic states of Estonia, Lithuania and Latvia. World War II had begun, and Peter Drucker was famous at age 30.

The Discipline of Management

Within several years of arriving in the United States in 1937, Drucker had persuaded senior management at General Motors to allow him access to all levels of the company. The resulting study became "The Concept of the Corporation," his 1945 book that described the impact and implications of GM's decentralized structure.

Over the next 10 years, he penned a series of classics that codified the practice of management. Additionally, he forecast the ownership of big corporations by the pension funds of U.S. workers, and the resulting influence they would have. Workers would now "own the means of production," as Karl Marx predicted, but in a capitalist structure that would have flabbergasted him.

Drucker astonished the world again in 1969, with "The Age of Discontinuity." It's hard to convey how startling a book this is even today. It paints a crystalline portrait of the knowledge-based economy, 25 years in advance, and the critical role knowledge workers (a term he introduced) would play. When the book was republished 25 years later, it was so relevant to the mid-1990s that it read like current events. He needed only to write a new introduction.

Deconstructing the nature (and Achilles' heel) of totalitarian societies. Defining the discipline of modern management. Labeling the building blocks of the knowledge economy. Most gurus would gladly make their reputation off one such accomplishment. But Drucker has had just as powerful impact on the nonprofit sector.

His 1990 book, "Managing the Non-Profit Organization," sets a foundation for the theory and practice of achieving results in volunteer, not-for-profit and government organizations.

Labeled a conservative, he is more accurately a 19th-century liberal, valuing free markets as a means for expanding individual freedom, not as an end in itself.

Though he has taught in universities nearly his entire career, he has always written in popular idiom, rather than for a specialized academic audience. His books and journalism are consistently readable and accessible, drawing examples and comparisons from recent and ancient history and sociology.

Two of his most decisive shorter books are "Innovation and Entrepreneurship," a classic on creating successful new ventures, and "Adventures of a Bystander," a quasi-autobiography that tells the stories of the 20 or so most interesting people Drucker has known, ranging from Freud and Alfred Sloan to his second-grade teacher.

Drucker, Dirty Harry and the Duke

Born in 1909 in Vienna, Drucker spent the first 30 years of his life in Europe, and he still speaks in a baritone Austrian accent. Nevertheless, he is an American icon -- an individualist, supremely creative yet always staring reality in the eye, taking the best of traditions and making something new out of them.

A conservative who loves the new, he is as American as Clint Eastwood or Duke Ellington, other American originals whose creativity and accessibility make them influential in the long term, and accessible at levels surface or deep.

I don't know whether Drucker has been compared with the Duke or Dirty Harry before, but I'd like to think he'll enjoy the company.

We are better for his thinking, writing and energy, and his writings will remain classics.