Peter Drucker understood the value of people in the business equation a long time ago. In his last best seller book author Jim Collins deliberates on what could merely good companies do to become great. One of the no brainer findings had to do with the importance of people. Surprise, surprise?
It is evident that one of the primary objectives in making a company great is to get the right people for the task(s), and create a culture with self-disciplined team players who are willing to go to extreme lengths to fulfill their responsibilities. This truth about business is not revolutionary or new, besides Drucker and now Collins, the late W. Edwards Deming had also been preaching it with passion a long time ago. Why don’t we have more great companies with sustained growth and innovation? Well, that is the job of those of us in leadership roles; that is a fundamental that has to be right. At the end of the day huge value is created by getting the people truth right!
The following classic eulogy to one of the greatest business thinkers was published by Scott Thurm and Joann S. Lublin, staff reporters of The Wall Street Journal last November 14, 2005.
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Peter Drucker was the most influential management thinker of the past century. But his most crucial insights were about workers. Mr. Drucker, who died Friday at age 95, was among the first to see the limits of large industrial organizations and their authoritarian hierarchies. Long before the Internet, before even the first computer chips, he foresaw the arrival of "knowledge workers" motivated by personal pride as much as by fear and a paycheck. Harnessing their talents, he argued, required a new approach to management. He dispensed this advice in simple prose in 39 books over a remarkable 60-year career, and in probing conversations with scores of executives. Along the way, he developed a loyal following among many of the world's most-famous corporate chieftains, and became the model of the modern management guru, a craft he plied far more modestly than many of his successors.
While Mr. Drucker's eclectic interests ran from European history to Japanese art, his management teachings centered on ways to make workers more effective. David A. Jones, co-founder and retired chairman and chief executive of Humana Inc., a Louisville, Ky., health insurer, recalls the core of Mr. Drucker's advice this way: "Successful enterprises create the conditions to allow their employees to do their best work." Mr. Drucker offered plenty of other lessons, of course. He believed organizations should articulate a clear purpose, with specific, measurable goals; he developed the concept of "management by objective," to keep managers in step with those goals; he encouraged managers to ask unspoken questions and consider ignored issues.
His interests weren't limited to profit-seeking corporations. Mr. Drucker viewed nonprofit organizations as social linchpins, and devoted entire books to management of these groups. "He had the anthropologist's insight into this strange tribe [of managers] that had these formal rituals and strange practices," says Michael Useem, a professor at the University of Pennsylvania's Wharton School, and an author of several books on management and leadership. "Peter Drucker was able to see behind them, and also see what could be changed and made for the better." Mr. Drucker contributed much to the modern cult of the chief executive. Yet as an emigrant from Nazi Europe, he retained a lifelong distrust of charismatic leaders. "He was skeptical of hero worship," says John Alexander, president of the Center for Creative Leadership in Greensboro, N.C. "He saw management as an activity rather than a heroic venture."
Mr. Drucker's varied interests led him to predictions that gave him a reputation of a visionary in some circles. Warren Bennis, a University of Southern California business professor and author of more than two dozen books about leadership and related subjects, recalls Mr. Drucker warning him 15 years ago about coming social disruptions because of shrinking populations in Western Europe. In 1987, when Japan's roaring economy was the envy of the world, Mr. Drucker saw trouble ahead. "The pillar of their success -- lifetime employment -- is becoming an almost insurmountable barrier to flexibility," he said. Skeptics, and there were few, who studied his record said that Mr. Drucker was wrong as often as he was right, and had a penchant for twisting anecdotes in the retelling. But that did little to shake the faith of several generations of CEOs. Mr. Drucker's impact was so profound that most of them still remember the first time they read, or met, him.
For Humana's Mr. Jones, it was in 1974, when his colleague Wendell Cherry bought one of Mr. Drucker's books at an airport to help pass the time of a flight delay. "Wendell called me and said, 'Some guy wrote a book about us," Mr. Jones recalls. The two finished the book, "Management, Tasks, Responsibilities, Practices," in a weekend, then called Mr. Drucker on Monday morning. A few weeks later, the pair flew to Mr. Drucker's home in Claremont, Calif. There, Mr. Jones quickly learned the cornerstone of Mr. Drucker's style: "He never really answered questions. He always asked them." Still, Mr. Jones was sufficiently impressed that he repeated the pilgrimage annually for more than a decade. He recalls two preachings: That profit is a requirement for a company, but should not be a goal in itself; and that productivity and quality are effectively the same thing. "A day or two spent with Peter was the most valuable way I could spend my time," Mr. Jones says.
Dan W. Lufkin, co-founder of the Wall Street investment firm Donaldson Lufkin & Jenrette, encountered Mr. Drucker's unusual style during their first meeting, in the early 1960s, just as DLJ was just getting off the ground. Mr. Drucker, who spoke with an Austrian accent, initially seemed "formal and authoritarian," Mr. Lufkin recalls. "I asked him if he thought we should sell a certain product or do a certain strategy, but all he said was 'I don't know' to every question I posed," he recalls. "So finally I asked, what am I hiring you for?” Mr. Lufkin says. In response, Mr. Drucker said, "I'm not going to give you any answers, because there are always many different ways to approach problems, but I'm going to give you the questions you should ask." Mr. Lufkin says. "So we started talking in great length and depth about who we were and what we wanted to do -- and I can't tell you how important he was to the development of the firm.”
For Andrew Grove, the retired chairman and chief executive of Intel Corp., the Peter Drucker moment came in the late 1970s, when he ran across a book that Mr. Drucker had published about a decade earlier. The book included a chapter on the multiple roles of a CEO: the public face of the company, a strategist and an operational manager. Mr. Grove says the descriptions echoed the way that he and two other Intel co-founders, Robert Noyce and Gordon Moore, had unconsciously divided the duties at the top of the semiconductor maker: Mr. Noyce as the public face, Mr. Moore as "a man of thought," and Mr. Grove as "a man of action." Mr. Grove says he ran to a copy machine and distributed copies of the chapter to Messrs. Noyce and Moore. At the time, Mr. Grove says, he was a "young manager, very skeptical about management gurus and consultants. Nonetheless, he says Mr. Drucker's writings "spoke to me. He was so impressed that Mr. Grove drove an hour from Intel's Silicon Valley offices to San Francisco to watch that era's motivational video -- a three-hour movie of Mr. Drucker speaking about management.
Mr. Grove singles out two of Mr. Drucker's precepts that have stuck with him: That managers should never promote an employee on the basis of his or her potential, but based only on performance; and that managers should make a decision no later than you need it, but as late as possible, because you always have more information. Mr. Drucker's lessons still resonate with a younger generation of managers. Mike Zafirovski, 51, who begins work tomorrow as chief executive of Nortel Networks Corp., never met Mr. Drucker, but says the author had a "huge influence" on him. Reading Mr. Drucker's books, Mr. Zafirovski says he was persuaded by the argument that companies should "treat employees like their most valuable resources, including pushing decision making to the lowest levels."
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