Peter F. Drucker – the father of management thinking
“The most valuable asset of the a 21st century institution
will be its knowledge workers and their productivity.”
(Peter F. Drucker 1999)
"We don't believe in progress,
we practice innovation."
(Peter F. Drucker)
Peter F. Drucker was born in 1909 in Vienna, Austria, and was educated there and in England. In 1937 he emigrated to the United States and publishes his first book, “The End of Economic Man”. By then, in the 1940s and 1950s he began to write about issues nowadays known as “management”.
He derived his ideas from his broad humanistic background and took the societal function of an enterprise as his starting point. In this sense, what mattered to him was the functioning of a society.
His basic concept about the purpose and sense of private business has become well known. It is more and more quoted in our times of global economic crisis. The purpose of a company can never be the maximisation of its profits - but the “creation of a customer”. You only can understand the doing of a company by looking at its customers and the value the company creates for its customers.
Consequently, he sees innovation and marketing as the two distinct functions of any company. And he takes a company as a “social institution”.
Peter F. Drucker died in 2005, shortly before his 96th anniversary. He worked until his dead as a writer and published an enormous variety and volume of articles and books.
In November 2009, on the occasion of his 100th anniversary, the “First Global Drucker Forum” gathered among others the following distinguished participants in Vienna. Read their perceptions of his work:
Prof. Philip Kotler:
Peter Drucker: The Grandfather of Modern Marketing
“Peter is not only the father of modern management, but he also is a pioneer in recognizing the centrality of consumers in planning for business success. This is clear from several memorable and insightful statements by Peter about the aim of marketing and the nature of consumers. Peter Drucker wanted managers to see marketing as more than just another one of a half dozen business functions. He wanted managers to see marketing as an overriding business philosophy that helps define the company’s best opportunities and that actively participates in the company’s effort to capture the best opportunities. This profoundly influenced my thinking on the nature of marketing. I couldn’t accept marketing as just a function that handles advertising and the sales force. Nor could I accept marketing as only handling 4Ps, namely product, price, place, and promotion. All of this is important tactical work but it isn’t the whole story of marketing. A company’s marketing people must manage more fundamental processes, namely segmentation, targeting and positioning (STP).
Even these three don’t tell the whole story of marketing’s potential. Marketing must be viewed holistically instead of only vertically. That’s how P&G, Starbucks, Amazon, Harley-Davidson, Ikea, Whole Foods, Toyota, FedEx, and several other companies see marketing.
Marketing is the driving force in these companies. Acquiring, keeping, and growing customers through creating, communicating and delivering value is the defi ning mission. These marketand-customer-driven companies focus on four goals:
- Integrating products, services, communications, channels and prices around a strong brand concept and promise.
- Getting all employees and partners (wholesalers, retailers, advertising agency, etc.) to think about creating, improving and delivering customer value.
- Practicing good corporate citizenship through consistent social responsibility and ethical behavior.
- Aiming to build strong lasting relations with all the company’s stakeholders and making them all into winners.”
Prof. C. K. Prahalad
“Visible but not Seen”: The Genius of Peter Drucker
“Peter Drucker was a never ending “idea machine”. He defied age. He never accepted retirement. It was not part of his thinking. Forever curious, he was constantly looking for and found new avenues to improve and inform practice. He was not a forecaster. He did not consider himself to be one either. He was unmatched in seeing new patterns in the data that was available to all. For example, he was a pioneer in looking beyond corporations to nonprofits and religious orders to identify management lessons. Similarly, he saw the emergence of a knowledge society which will be governed by new rules; not the same that informed the manufacturing age. He could see the connection between the revolutions that Internet was causing with the revolution caused by the Gutenberg press. His ability to connect and see patterns with the past, with other institutions, and with emerging trends was what made him so valuable and immensely popular. Finally, he communicated these insights with great clarity. In this paper, I plan to explore his “research method”. Are there lessons for all of us who strive to be relevant and impactful in our research?”
Prof. Charles Handy
What Drucker Taught Me
“Peter Drucker was a huge influence on my thinking and my work. From him I learnt:
The importance of seeing business, and indeed all organizations, as the key building blocks of society. From this it followed that their goals must enrich society and not merely their owners. The dangers of attaching the rewards of executives too closely to the stock market were made all too clear recently. There is an urgent need to realign rewards with purposes. The full meaning of the Responsible Corporation needs to be spelt out.
The need for leaders to have a “philosophy” for themselves and for their organizations, by which I mean a set of values and purposes on which they base their strategies and actions. Leaders need to stand tall and not hide behind the anonymity of bureaucracy. Personal values matter; only then can one build the basis of the trust that has to be the backbone of a successful organization.
When advising others, it is best to listen before you talk, and to question rather than instruct – what I think of as Socratic Counselling, something all managers need to learn and which Peter Drucker did so well.
The power of concepts to illuminate new truths, e.g. Peter’s “knowledge workers” or, in my case, “portfolio lives”. Leaders need to use language more creatively in order to help their people to see things more clearly. Peter was expert in the creative use of metaphor to draw attention to new issues.
The importance of a deep “hinterland”. Peter’s understanding of history, of sociology and psychology, even of art and religion, allowed him to see beyond the blinkers that most academics and managers wear. Management education needs to be much broader than it is now.”
Prof. Fredmund Malik
“Peter F. Drucker, the intellectual father of management, would have been 100 (hundred) years old on November 19, 2009. There could hardly be a better time to remember the man than now, with so many of even the most competent executives deeply troubled at the cracks appearing in the seemingly rock-solid foundations of their world. …..”
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