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Lessons From Peter Drucker

Why Managers Still Follow Drucker’s Ideas

Cohen
Posted: 01/12/2017

Every few years, a new supposedly revolutionary management concept gains popularity. And for the most part, after a few years in the limelight, the ideas are rarely used anymore. 

Where have they gone?  What happened, for example, to McGregor’s Theory X vs. Theory Y and “Participation Management” or the Blake-Mouton Managerial Grid? Are Bruce Henderson’s portfolio management techniques still in common use outside of academic courses?

In the early 1980s, Japanese Management was all the rage. As it morphed into TQM, it faded and today it has largely disappeared. Even TQM is rarely put forth as the single concept needed for success.

While other management principles have vanished entirely, Peter Drucker’s management ideas continue to be popular.

I don’t mean a single concept which Drucker promoted, such as Management by Objectives. Actually, MBO wasn’t his. He merely promoted and defended it. 

Yet our trust in the Drucker name and his ideas are largely in place. There remains a “Drucker difference.”

My Experience With the “Father of Modern Management”

I was Drucker’s student in the late 1970s as I completed my Ph.D at what was then Claremont Graduate School of Management. Today it’s known as the Peter F. Drucker and Masatoshi Ito Graduate School of Management at Claremont Graduate University.

Peter was a unique genius. Among his students, he was known for his wit, his openness in responding the questions, and his different interpretation of management.

At the time, participatory management—exemplified by Douglas McGregor’s Theory X (traditional authoritative management) versus Theory Y (management with the participation of those managed)—was all the rage.

Drucker pointed out that McGregor never intended for 100 percent management by Theory Y. McGregor wrote that both approaches should be examined for use depending on the situation.

How Was Drucker So Successful? 

Drucker knew his asset as a consultant wasn’t his knowledge and experience, it was his ignorance. Rather than telling companies what to do, he asked the executive team questions, which led them down the path to come up with the best possible solution. 

Instead of focusing on academic theories and methodologies, Drucker told managers to go with their gut. He even wrote a case study “The Management Control Panel” to show why replicating a pilot’s decision-making based solely on prime factors, such as air speed and altitude, would not work for business managers. 

Prime Factors Should Only Be a Guide 

As a former pilot and combat navigator, I can assure readers that these are not the only bits of information aviators using when making in-flight decisions.

I once flew on a combat mission in a modified WWII non-jet aircraft in bad weather. It was necessary to fly the aircraft in a straight and level altitude for the final few minutes of flight to ensure accurate delivery of a bomb by radar controllers on the ground.

Suddenly the oil pressure gauge on the control panel dropped to zero. Normally that meant the engine needed to be shut down at once to avoid calamity. However, I considered additional factors not displayed on the airplane’s control panel.

There were no audible sounds of engine seizure. Our oil pressure gauges were notorious for failing in flight. If the engine failed in flight, I would have sufficient time to shut the engine down and “feather” the prop to ensure reduced drag on the “dead” engine. 

The weather was bad—the reason for the ground radar controlled the drop in the first place. If I aborted the bomb run, I would have to be located by the ground radar and start the run all over again. This was chancy under the weather conditions.

All things considered, I made the decision to ignore the oil pressure gauge, but to keep one eye on it as I continued my run. It turned out to be a bad gauge and I had a successful run, which might not have been true if I had assumed that the gauge was correct and I needed to shut the engine down.

The Limits of Disregarding Situational Factors

Drucker’s friend Warren Bennis, a renowned leadership professor, was once president of the University of Cincinnati. He implemented participatory management decision-making with little situational analysis under the assumption that participatory management would always turn out well.

Drucker commented that afterwards there was a great deal of excitement, but ultimately the plan failed. Bennis left his management post and accepted a job as a professor at the University of Southern California, where he became both successful and famous, owning up to the mistake he made earlier. 

He realized that in certain scenarios a more authoritarian style of leadership decision-making might be called for and lead to more success.

Drucker’s Gut Management

Drucker felt that managers depended too much on quantitative models to lead them to a solution when they should have gone with their gut. 

The results from these complex models shouldn’t be ignored. Instead, the manager should interpret these results in the same way that I interpreted the reading from what turned out to be faulty oil pressure gauge.

Why Drucker’s Ideas Live On

The real “Drucker difference,” the reason his ideas continue to be used and adapted years after his death, is quite simple: Drucker eschewed the idea of being a management guru or concocting one infallible management system. Rather, Drucker taught us to think.

This article has been adapted from Peter Drucker on Consulting: How to Apply Drucker’s Principles for Business Success, published by LID in 2016.

 

Cohen
Posted: 01/12/2017