I tried to interview Peter Drucker several times. The first time he replied, without explanation, “Sorry. Sold out.” His reply was the same when I emailed him again three months later. About a year later, I got a different, though equally disappointing, reply. “Sorry, too busy painting.” (Japanese brush painting, which he had long studied and taught, I assumed).
Peter Drucker was a giant of a man and a national treasure. He may not have invented management but he certainly pioneered and set the standard for management thinking and writing, especially for their breadth and pithiness. While Alfred P. Sloan is credited with having invented the modern corporation, it was Mr. Drucker who enabled that invention, by studying Mr. Sloan’s GM and introducing the idea of decentralization. Years later, after studying GE, he famously advised newly installed CEO Jack Welch by asking, “If you weren’t already in a business, would you enter it today? And, if the answer is no, what are you going to do about it?”
For me, it isn’t just that Peter Drucker was both the bedrock and oracle of management thinking and writing. It was the intellectual appetite and vigour he exhibited when talking about or teaching in fields as diverse as management, eastern religion, Japanese painting and the non-profit sector. Never a true believer, Mr. Drucker was an iconoclast, one whose greatest contribution may prove to be establishing scepticism as the default for management thinking. The originator of the by-now seemingly antiquated “management by objectives,” Mr. Drucker came to be called on less and less as he grew older, and as he came to be seen, very sadly, as yesterday’s management guru. Too bad, because Peter Drucker’s thinking and writing will always be marked by cogency and pithiness, and the man will always represent the humanist, fully formed manager that business schools and corporations will forever hope to shape and desire.
While Mr. Drucker could be eloquent he could also be prosaic. “Management must always, in every decision and action, put economic performance first,” he wrote in The Practice of Management. “It can only justify its existence and its authority by the economic results it produces. There may be great non-economic results: the happiness of the members of the enterprise, the contribution to the welfare of culture of the community. Yet management has failed if it fails to produce economic results.” And further on, in what is certainly an epitaph for many failed companies, he wrote that, “There is only one valid definition of business purpose: to create a customer.”
Back in the eighties, Peter Drucker thought that the actions of corporate managers who collected huge salaries and stock options while firing thousands of workers were “morally and socially unforgivable.” It’s safe to infer that he would say the same, at least, of the larceny and deception perpetrated by executives in the past five years or so. Some of this behavior will be disclosed in the coming months, during the trials of former executives of Enron and Hollinger International. During these months, some of the worst practices in corporate governance will be in the spotlight. Which is one reason why some of the articles on governance in this issue of Ivey Business Journal will be welcome reading.