Peter Drucker was a world-famous management consultant whose ideas transformed business leadership from reactive to proactive. Before Drucker, managers’ highest priority was supervising. Now, thanks to him, it’s strategizing.
Drucker laid the foundation for corporate responsibility externally by being a good corporate citizen and internally by creating a positive company culture. That’s just one of many insights Drucker left behind for businesses of all sizes in all industries. Business owners and managers who take the time to learn about Drucker’s lessons, life and work can glean many guiding principles that are just as relevant today as when he wrote about them decades ago.
Peter Drucker was born in Vienna, Austria, in 1909. He attended college and graduate school in Germany in the early 1930s, where he witnessed – and vocally opposed – the Nazis’ ascent to power. Drucker fled to England in 1933 and then to the United States in 1937. During this period, he worked as a financial journalist and an investment analyst. In 1939, he published his first book, The End of Economic Man: The Origins of Totalitarianism, which chronicled the rise of fascism.
Drucker believed the only way to prevent a second coming of fascism was to create a “functioning society,” the cornerstone of which, he said, was strong institutions – including corporations, which he believed had a duty to be as virtuous as they were profitable.
“Management, practiced well, was Drucker’s bulwark against evil,” according to the Drucker Institute, a social enterprise established by Drucker to advance his ideas and ideals.
Drucker laid out his theory – that corporations are as much social entities as they are economic ones – in his second book, The Future of Industrial Man, which caught the attention of General Motors. In 1943, the company invited Drucker to study its internal operations, the result of which was Drucker’s third book, Concept of the Corporation, in which he introduced many of his most influential management theories.
And so commenced Drucker’s prolific career as a management consultant, teacher and author, which spanned more than 60 years until his death of natural causes in 2005.
“Drucker felt that all businesses need and deserve to be managed well,” explained Drucker disciple Bruce Rosenstein, author of two books about the management guru and his theories: Create Your Future the Peter Drucker Way and Living in More Than One World: How Peter Drucker’s Wisdom Can Inspire and Transform Your Life. “Part of that, he believed, was thinking about the future … He recognized that even if you’re really successful now, you will fail later if you’re not thinking about the future.”
In Drucker’s own words: “Management is doing things right; leadership is doing the right things.”
Peter Drucker’s management theory embodies many modern concepts, including the following:
One of Drucker’s most enduring ideas is “management by objectives,” or MBO. Although it has come to mean different things to different people, the definition most agree on is management in pursuit of shared organizational goals.
The idea is simple: Employees at all levels work together to advance the business toward an agreed-upon destination. Each worker has an equal say, sharing their opinions on the destination. From there, teams establish business goals and delegate specific tasks according to skill sets and interests.
The process comprises five basic steps:
For organizations and individuals, Drucker believed in fellow management consultant George T. Doran’s concept of SMART goals – goals that are specific, measurable, achievable, realistic and time-bound.
“It’s the idea that you have to have a sense of where you’re going, what good results look like and how you’re going to achieve them,” Rosenstein explained. “You have to think in a very concrete way about what you want to accomplish so that you can get there, and help other people get there.”
Although Drucker’s ideas are decades old, they feel as fresh today as ever. Consider, for example, one of his most famous pieces of advice: “Look out the window and see what’s visible but not yet seen.”
“Drucker wrote about ‘the future that has already happened,'” Rosenstein said. “Think about self-driving cars, or blockchain, or artificial intelligence. These are things that have already happened but whose full social impact hasn’t yet been realized. Drucker would have argued that your business needs to be thinking now about what those things are going to mean for your business down the road … His advice is timeless. It will still apply years from now – whatever the current trends and technologies are.”
Source interviews were conducted for a previous version of this article.