Organizations and Markets

What Would Peter Say?

16 November 2009 at 10:23 am Peter G. Klein 2 comments

| Peter Klein |

Peter Drucker, that is. The great management guru died in 2005 — and even then, he didn’t blog, unlike some other guys named Peter. If Drucker were alive today, what would he say about the financial crisis, health-care reform, climate change, and the other Big Issues of our day? Rosabeth Moss Kanter asks in the current issue of HBR, and thinks Drucker’s writings have important lessons for today’s problems. E.g.:

• Drucker would not have been surprised that incentives to take excessive risks contributed to the recent global financial meltdown. Back in the mid-1980s, he warned about a public outcry over executive compensation — a main theme on the U.S. government’s agenda following the fall of banks in 2008.
• Years ago, he warned of troubles ahead if GM executives remained stuck in memories of previous successes and failed to ask his famous “what to stop doing” question. GM was an iconic example of failure to see the need for significant innovation; its structure had become ossified, and its top management couldn’t consider a change.
• He focused on how organizations could best achieve their purpose, not on business per se or on profit as the main indicator of success. He championed a robust civil society of voluntary nonprofit organizations as an essential foundation on which business could thrive and people could prosper, because this sector plays a vital role in promoting health, education, and well-being. The role of government is fuzzier in Drucker’s writings, although it is clear that he mistrusted centralization of power and saw bureaucracy as a source of rigidity rather than innovation.

I hadn’t known before that Drucker’s father was friends with Schumpeter, often described as a major influence on Drucker’s thinking. “Regular guests of the Druckers included the economists Schumpeter, Hayek and Mises, with whom Drucker’s father had business relations in his function as director of the K.& K. trade museum,” according to Drucker’s official biography. Unfortunately the young Drucker was more attracted to Othmar Spann, described by Mises as an “anti-economist.”

Entry filed under: - Klein -, Management Theory, People.