Peter Drucker, 1909-2005

Peter Drucker, the management uber-guru who hated the term "guru," died at home in Claremont, California yesterday "of natural causes," a phrase all too rarely heard in our Big Medical Science era.  I'll leave the recitation of the facts of his life to the capable hands of The New York Times and the FT, but his passing deserves a word because of his vast and continued insight and perspective.  In these days of embarrassingly vapid "management" books (I won't name too many names, but Jack Welch, Lee Iacocca, and Donald Trump will give you my drift), Drucker was a sage for the ages.  Over 66 years, he wrote 35 books which were translated into 30 languages.

"Peter could look around corners," philanthropist Eli Broad, who knew Drucker for 30 years, said Friday. "He would say things that seemed rather simple but in fact were very profound. He saw the future."

Drucker's views stemmed from his focus not on corporations in the abstract, or buildings and machines, processes and systems, not in creating elaborate economic or managerial theories:  Drucker's focus was on people. Management's job was to chart a course and get out of the way. People were not an expense but a resource.

Interestingly, another business legend of the 20th Century, Warren Buffett, operates on the same principle (from a profile of him in today's WSJ):

Mr. Buffett believes that managers of these companies ought to be left to run their businesses without interference from him, and without having to hew to any unifying corporate strategies or goals. "We delegate to the point of abdication," Mr. Buffett says in Berkshire's Owner's Manual, a six-page manifesto posted on the company's Web site.

Famously, Drucker was also skeptical of grand predictions.  He was anchored in the concrete:

"There is only one valid definition of business purpose: to create a customer," he said 45 years ago. Central to his philosophy was the belief that highly skilled people are an organization's most valuable resource and that a manager's job is to prepare and free people to perform. Good management can bring economic progress and social harmony, he said, adding that "although I believe in the free market, I have serious reservations about capitalism." (from The Washington Post)

And here are some words of wisdom particularly germane to lawyers, information junkies that we are. The message is to be exceedingly selective about what you're doing as a firm leader (from a 1996 Forbes interview):

"Leaders communicate in the sense that people around them know what they are trying to do. They are purpose driven--yes, mission driven. They know how to establish a mission. And another thing, they know how to say no. The pressure on leaders to do 984 different things is unbearable, so the effective ones learn how to say no and stick with it. They don't suffocate themselves as a result. Too many leaders try to do a little bit of 25 things and get nothing done. They are very popular because they always say yes. But they get nothing done."

In 1999, the WSJ published the following on the occasion of his 90th birthday. It can scarce be bettered:

"Drucker is famous for a series of questions: What is our business? Who is the customer? What does the customer value? The answers to those questions, asked by generations of managers around the globe, became known as "the theory of the business."
The most distinctive hallmark of the managerial mindset is that it operates from that theory. Major decisions and initiatives all become tests of the theory. Profits are important in part because they tell you whether your theory is working. If you fail to achieve the results you expected, you re-examine your model. It is the managerial equivalent of the scientific method, starting with hypotheses which are then tested in action, and revised when necessary."

Pay a bit of heed this weekend; we will be exceedingly fortunate to see someone of half his stature again.

And for the record:

• The Los Angeles Times
• The Washington Post
• ABC News
• Forbes (including a wonderful republished interview)
• Bloomberg

Update (14 Nov 2005, 11:52 am):  Here's one of the last things Drucker wrote for publication.  Print it out and tape it up somewhere conspicuous (or put it under your pillow).