Peter Drucker

After Peter Drucker died earlier this month, a number of articles explored his legacy and his influence on modern business. Most have concentrated on his writings on corporate management, especially his seminal book, The Concept of the Corporation. Few of these, however, really captured the social thinker – the author of The End of Economic Man and The Future of Industrial Man — his first two books. Most importantly, many of these articles either skipped over or downplayed what is, for me, the most important of Drucker’s ideas – the rise of the knowledge worker. The review by the Economist “Peter Drucker: Trusting the teacher in the grey-flannel suit” got it right:

The two most interesting arguments in “The Concept of the Corporation” actually had little to do with the decentralisation fad. They were to dominate his work.
The first had to do with “empowering” workers. Mr. Drucker believed in treating workers as resources rather than just as costs. He was a harsh critic of the assembly-line system of production that then dominated the manufacturing sector–partly because assembly lines moved at the speed of the slowest and partly because they failed to engage the creativity of individual workers. He was equally scathing of managers who simply regarded companies as a way of generating short-term profits. In the late 1990s he turned into one of America’s leading critics of soaring executive pay, warning that “in the next economic downturn, there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.”
The second argument had to do with the rise of knowledge workers. Mr. Drucker argued that the world is moving from an “economy of goods” to an economy of “knowledge”–and from a society dominated by an industrial proletariat to one dominated by brain workers. He insisted that this had profound implications for both managers and politicians. Managers had to stop treating workers like cogs in a huge inhuman machine–the idea at the heart of Frederick Taylor’s stopwatch management–and start treating them as brain workers. In turn, politicians had to realise that knowledge, and hence education, was the single most important resource for any advanced society.

Too bad that American business really hasn’t absorbed these two lessons. They think they have – but workers are still treated as liabilities, not assets. And their knowledge is treated as something that can be turned off and on like a machine.
Drucker himself gave a great example of this problem in an interview published on Jan 1, 2000 (which the Wall Street Journal has reposted online :

I just spent 10 days in the hospital. This is our local hospital, and I know the administrator. Nine of those 10 days I was in good shape, but I had to lie flat and motionless because I had an IV in each arm. So all the nurses came and chatted with me. They came to me in the hope that I would get across to the administrator something that irked them. I won’t tell you the details. It involved a change in policy imposed on the hospital by the HMOs that altered their professional status. They were being told what to do instead of being asked what should be done. They are used to that from physicians — but not from administrators.

Drucker went on to discuss how he passed the message on to the hospital administrator, who changed the process.
Slowly – oh, so slowly – we are leaning the wisdom of what Peter Drucker said long ago about the true value of workers’ knowledge. As the hospital story shows, people get it – but they have to have it pointed out to them by astute observers, such as Drucker. It is sad that he won’t be around anymore to remind us and chide us to further progress.


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