Peter Drucker would have turned 100 in November 2009 if he were still alive. His centennial was celebrated in a big way by the Drucker School and Drucker Institute, both based at Claremont Graduate University in California, USA, where he taught for more than three decades. Many magazines and newspapers ran articles that not only celebrated Drucker, but also examined his relevance in today's context.
That Drucker would remain so fondly remembered, even after his death, is a sure sign that he has had a remarkable influence on the world. For one, he was hailed the father of modern management, or as the man once called it, the institution of society. So what might Drucker have to say about the postmodern era of management, recently scarred by popular terms such as bailouts and too big to fail?
Drucker100.com, a website to mark the guru's centennial, noted that the world needs Drucker now more than ever: With financial markets in crisis, political institutions around the globe in turmoil, and much of the world continuing an uneasy transition to knowledge work, Drucker's insights on effective management, ethical leadership, and social responsibility have never been more essential.
Incidentally, 'knowledge worker' was a term first coined by Drucker back in 1959. Today, there are at least 29 Drucker Societies set up to propagate his ideas on effective management, knowledge work and ethical leadership all over the world. Many educational institutions and private companies also leverage on the Drucker brand to sell training programmes and consultancy services.
The publishing business is no exception. Robert Swaim is the author of The Strategic Drucker: Growth Strategies and Marketing Insights from the works of Peter Drucker. The book weaves the many lessons he had learnt as Drucker's former student, colleague and friend, distilling them into one neat package for the readers.
As much as Drucker was hailed as a thinker and predictor of trends, he was often criticised by his academic peers for lacking rigour in his work. Rick Wartzman, executive director of the Drucker Institute, admitted, One of the things that drives a lot of analysts crazy about Peter is that he's not empirically based.
Some of his arguments and forecasts have turned out to be largely inaccurate. And it is said that Drucker often frustrated many with his vague and fuzzy approach. In fact, he is said to have once lectured a client: My job is to ask questions. It's your job to provide answers.
Still, business thinkers continued to rely on Drucker for his insights and advice. Wartzman, quoted in a BusinessWeek story, reasoned that [Drucker] was around so long that he was able to create his own statistical sampling from his own observations. And so, despite his occasional gaffes, people continued to trust Drucker's instincts.
This huge support from the masses has, in turn, allowed Drucker to churn out 39 books and thousands of articles on management and related topics. His writings have been read by more managers than those of any other single author, living or dead, Swaim noted.
Yet, Drucker has never written a book dedicated to strategy. Swaim realised this as he was developing a Drucker MBA course on strategy when he found himself trawling through numerous writings in order to stitch together something cogent. This brought to his attention, the need to fill in the Drucker gaps.
Swaim explained that while Drucker was very good at describing what should be done, he might have been a little less clear on the how to do it part. People had difficulties applying his theories in real life situations.
Swaim cites William Clarkson, former CEO of Graphic Controls, who wrote in 1985 that on one side of the gap, we have Drucker, the seer. On the other side of the gap, we have the US manager knowing that the Management Bible (Drucker's 1973 classic, Management: Tasks, Responsibilities, Practices) has been written by Drucker, but not quite knowing how to have this knowledge become a part of her or his behaviour and practice.
There was thus a troubling gap between Drucker's theory and the actual practice of US businesses. The Strategic Drucker is an attempt to bridge this gap - at least within the strategy arena.
Getting rid of yesterday
Although the book is fundamentally based on Drucker's views, Swaim, in several instances, would raise opposing views from other management thinkers. The book is hence generally organised along this pattern: For each topic, Drucker's views are explained first; the gaps are then highlighted; attempts to close the gaps are made via practical guidelines, such as strategic assessment forms, or via differing viewpoints from other management pundits.
A good example is Chapter Six, where he expands on Drucker's concept of 'planned abandonment'. Drucker had often stressed that the first step in strategic thinking and planning is to get rid of yesterday. This means that companies should make systematic analyses of their present businesses and products. Those that no longer fit the purpose and mission of the business - those that no longer make a superior contribution - should be abandoned.
A key question that Drucker often liked to ask management was: If we did not do this already, would we go into it now?
Keeping declining products or services, according to Drucker, would stunt the growth of companies. The resources being used to keep it alive should be allocated to tomorrow's opportunities and new products, Drucker used to say.
Even for ageing products that may still make money, Drucker advocated an almost zero-tolerance approach to letting go. This went down well with Jack Welch, who took Drucker's advice when he took over as CEO of General Electric (GE).
Under Welch's leadership, business units that could not be the No.1and No. 2 of their respective industries were 'abandoned'. Within the first two years, GE divested 71 businesses and brands.
On hindsight, Welch claimed that there were some limitations to Drucker's concept. He wrote in his book, Jack: Straight from the Gut, Obviously, some businesses have become so commoditised that leadership positions give you little or no competitive advantage. It made little difference if we were No. 1 in electric toasters or irons, for instance, where we had no pricing power and were facing low-cost imports.
Be that as it may, aside from the No. 1 and No. 2 strategy that Drucker had recommended to Welch, there seems to be no other clear solutions that might aid such 'abandonment' decisions. Swaim also noted that, theoretically, if every company applied such a strategy, there would only be two firms in each industry. Not a very encouraging prospect, he quipped.
Drucker, but practical
Randomly applying Drucker's concept would be inappropriate, so Swaim suggests tools, such as Roger Best's Net Marketing Contribution, which examines, more closely, the elements of profitability and marketing profitability of a product line or business unit. This, he said, would offer a more comprehensive and measured take on how managers can plan for abandonment.
Wistful readers might also enjoy the additional score sheets that Swaim has provided in the annex pages of his book, such as the 'Industry Attractiveness Assessment Tool' and the 'Planned Abandonment Assessment' - supplements that that will add a more systematic dimension to decision-making.
In such respects, the book is a useful distillation of Drucker's thoughts on strategy; and by closing the gaps, Swaim makes Drucker's teachings more relevant and applicable to the cutthroat business world of today - where a greater emphasis is placed on results and means that are tried and tested.
As a matter of fact, Drucker, the man himself, might enjoy Swaim's bridging of the Drucker gaps with self-help assessment tools. In his 1986 book, The Frontiers of Management, Drucker wrote, Techniques are tools; without tools, there is no 'practice', only preaching.