January 29, 1998
It is not much of an overstatement to say that our understanding of the world today is the product of the mind of Peter Drucker. Many of the terms and metaphors by which we apprehend contemporary society -- Global Economy, Knowledge Worker, Information Society, Postmodern -- are concepts conceived of or developed by Drucker. Indeed, even the invention of "management" as the self-conscious art and science of governing our companies, our institutions, and ourselves is generally credited to this Austrian-born thinker.
Over the years Drucker has been the subject of many articles and not a few books. But until now no one has attempted to take the full measure of his career. Perhaps Drucker appears too daunting a subject for most biographers. He has, after all, served as a consultant to many of the largest Fortune 500 companies and to scores of non-profits; he has advised governments, including Japan and many of the U.S. administrations since Eisenhower; he has written twenty-nine books, including two novels; and he has served as the ur-intellectual to businessmen and social scientists alike. Nevertheless, this month witnessed the publication of Jack Beatty's The World According to Peter Drucker, an effort to synthesize and explicate Drucker's work as a thinker and writer. Beatty, a senior editor at The Atlantic Monthly, is well-equipped for the undertaking: he already has a critically acclaimed biography under his belt -- The Rascal King: The Life and Times of James Michael Curley (1992) -- and he has been Drucker's editor at The Atlantic for years, working with him on such major articles as "Really Reinventing Government" (February, 1995) and "The Age of Social Transformation" (November, 1994).
Scott Stossel, the executive editor of The American Prospect and a former staff editor at The Atlantic, recently interviewed Beatty for Atlantic Unbound.
Discuss this interview in the Community & Society forum of Post &
See a series of excerpts from The World According to Peter Drucker, by Jack Beatty.
Why Drucker? And why now? |
Why Drucker? Because other than a 1980 article from the Harvard Business Reviewthere was really nothing good on him. There was the 1976 book The Man Who Invented Corporate Society -- but that, from the title on, was just all wrong.
Drucker is a wonderful American writer. He's sold six million copies of his books. We have whole biographies about poets influencing other poets, but Drucker has influenced other continents and there was no exegetical work on him.
"On or about November 6, 1954, Peter Drucker invented management."
Well, both books are about a life. The first book was about a life of action; this one is about a life of thinking. What attracted me to Drucker was the opportunity to learn about this whole world of management. It impinges on everybody. Management has a great deal of power and influence in society today, and I badly needed to have it explained to me and demystified. I've always been curious: What does it mean when we say "management"? What's it all about? How did it all come about? What are its pretensions? What are its ambitions?
What is the difference between an intellectual and a consultant? Drucker is a very interesting focal point for considering that question. Is a consultant an intellectual who sold out, or is an intellectual a consultant without a portfolio? And which is Drucker?
"He recommends intellectual omnivorousness as a form of self-renewal."
Good question. I don't know. In researching the book I talked to ten or twelve
of his clients. I cite one manager who says that the best managerial advice he
ever got was from Drucker. The interesting thing, though, was that this advice
was not managerial so much as intellectual or cultural. It's one of the most
representative Drucker anecdotes I've come across. One day in a hotel lobby in
Japan, Drucker met the CEO of an American company who told him he was having
trouble with his Japanese business partner and was close to scrapping the
relationship. The CEO had decided not even to go down to Osaka to meet with
him. Drucker said, "Bill, you get on that train the first thing tomorrow
morning and go down to Osaka and you eat a little crow." The CEO did so, and
the relationship was saved. This is culturally sensitive management advice.
So that's an example of how his intellect and his knowledge bore practical
fruit for someone. |
That example may be the model of what he gives these people generally. He doesn't number the streaks on the tulip. He doesn't even write the comprehensive reports that he used to. Sometimes he still writes a long report, but sometimes he writes just a sheet. He gives his clients concepts; he gives them general ideas. He connects what they're doing with something larger. I think what they like, in fact, is that revelation he provides -- "God I never realized this, I never saw it this big-picture way!"
We associate Drucker with management, and therefore with business, but he's not one of these Wall Street types concerned only with finance or the bottom line. He appears to be more concerned with maximizing people's potential. Does Drucker represent the proverbial capitalism with a human face?
Against today's vertiginous capitalism, I don't know what anyone can do. The problem is, you can't measure productivity in the old way. How do you measure knowledge-work? If, as a CEO, you treat people decently, if you allow their full potential to flower, and if you don't dash their morale by making deals with Wall Street to give you golden parachutes and the like, and you show that you're committed to the business, then your employees will give you good work and good advice for the running of the company. They're going to work better than they otherwise would, and the whole place will have a different feeling. Drucker is telling these CEOs: Look, your high salaries are not only a social crime -- they're also an economic crime. Drucker is kind of a moralist about this, but he's also practical: a more democratic workplace, and a more egalitarian pay structure, would redound to the bottom line.
Management, in the Druckerian reckoning, is nothing less than a metaphysical bulwark against fascism. He also says management is a humanist undertaking and a liberal art. How much stock do you place in his interpretation of management? Does he give it too strong and significant a role in modern society?
"'The manager is the dynamic, life-giving element in every business.'"
I don't know. I don't claim to have the knowledge base to challenge his
interpretation. He looks at the world historically: surveying the post-Second
World War era, he saw that the way to keep chaos and emptiness and economic
depression -- those precursors of totalitarianism -- at bay was to make
economic institutions function well. And the key to making these function is
applying "mind" to work. That is what management is. For many people
management won the Second World War. The miracles of production of that
period were not engendered by making people work harder; they were conceived
out of management. The Marshall Plan, in fact, was sort of a manager's
So, seen in historical perspective, the significance of the role Drucker ascribes to management seems credible. I think the trouble today is -- and I'm not sure to what degree he's anticipated this -- that we have a kind of conflict between management and the price system. This is very similar, I think, to what Thorstein Veblen saw eighty-five years ago in the conflict between engineers and the price system. The engineers wanted to make a perfect product -- a product as good as it could be, a product that would last, but the price system said we don't need to make that kind of product. It needs to be functional, but we don't have to be so perfectionist about it, so let's just have mass consumer goods. The engineers lost that fight. And it looks like the managers are losing this one. They're fighting now against Wall Street, against the forces of capitalism.
Wall Street says to the manager, "All your efforts to harmonize human skills, to optimize people's strengths and neutralize their weaknesses, mean nothing if they don't affect the bottom line." I think being a manager today, with so much emphasis on the bottom line, must be terribly difficult. As a manager you want to do all the things Drucker said a manager should do, but all you're hearing from the stockholders and financial analysts is that we can't accept short-term losses. Drucker may not realize just how much these new forces are impinging on management.
"He defends profit, but as if it were broccoli: a distasteful obligation."
Drucker has provided lots of examples of how to temper the harsher effects
of capitalism. Yet he's also provided much of the intellectual infrastructure
behind the latest wave of privatization. He has written as much as anyone about
the dislocating effects of globalization, and the transformation to a service
economy. And now more than at any time since the Industrial Revolution there's a
need for something to help ease the transition, to mitigate the dislocation of
our workers. Yet Drucker wants to diminish the role of government, and give its
role to private for-profit firms, or to non-profits in the social sector. Do
you think that makes sense? |
No, I don't, and I hope that comes through in the book. I think that his derogation of government and politics is the most serious weakness in his whole world view. And that may come from spending so much time with people who regard government as a total albatross. People say, "Imagine asking government to get involved in medical care!" Well, what about Medicare? Pretty good program. I think most people would agree.
Drucker's normative view is that foundations will be more efficient than government. I question that. And what does the replacement of government by the non-profit firms do to the notion of citizenship? You're no longer a citizen, you're a client.
But Drucker also points to corrosive criticism of government as a real problem, and his analysis there is dead on. He first said that thirty years ago, but it's precisely at this moment when we are entering the global economy that we need the whole role of government to be re-thought -- not in the way the Republicans have done, simply by standing away from it, but by getting involved in it in some catalyzing way and protective way, joining the two forces of government and the global economy. A kind of compromise. Drucker saw the problems associated with attacks on government a long time ago, and in that sense he was very prescient and incisive. But at the same time he concedes too much to the attackers.
That comes across in your book -- you catch him several times talking about the "futility of politics" even as he is stressing how important it is that criticism of politics be reined in.
Part of the problem is that he doesn't remember pre-New Deal America.
"He has, you sense, reserves of Old World Charm sufficient to smooth any troubled waters."
arrive in this country until the tail end of the New Deal, after the welfare
state had already been established. So he doesn't know what the country was
like before the welfare state. He doesn't see what an immense achievement the
New Deal was -- it humanized the system through pensions, saved the elderly
from the poor house, redressed the vast imbalances between rural and urban
America, brought electricity to rural America ... all that stuff. This is
what government has done. He didn't see that; he came too late. If he had come
earlier and had had just a taste of America in the 1920s, I think he would have
had a different view. But instead he doesn't see the great work of politics --
the Civil Rights era, for example. You can't deny that liberal government
matters to the achievement of civil rights. That didn't seem to impress him
In your book you say that irony is the habit of Drucker's mind. What do you mean by that?
Drucker has a kind of doubleness. It fits his role as the moralist, as someone who's not going to be caught in a position. Moralists don't take positions; they sort of hover between them. Take Irving Howe -- what was his position? Getting out of fixed positions. I think that describes Drucker, too.
What's the most interesting thing that you learned in working on this book? How much did it change your way of thinking about society and management?
I've always seen business on the one hand and government on the other, and had never seen the human aspect they hold in common. That's management. Discovering this was a revelation for me.
I learned about the whole human reality of the business system, about the people who make it go. I've never appreciated quite what the manager deals with, the range of problems stretching from pregnancy to the next quarterly statement. I have a lot more admiration for it. This abstraction -- Business -- now has a human face to it. And of course I now see it everywhere. Good management is not just something for business; it applies to the public sector, too. Immersion in Drucker's writings was like discovering an unknown country for me. I've never had any dealings with businessmen. I discovered that the manager is one of the authors of modernity.
Having worked with Drucker myself, as an Atlantic fact-checker, I have to ask this question. He is certainly one of the most brilliant people I've ever encountered. Yet I also learned that he's not one to let a few facts get in the way of a good theory. In your book, you talk about how important intellectual integrity is to him. Does his disregard for facts contradict his claims of intellectual integrity?
"'There is only one point on which the economists and I are in agreement: I am NOT an economist.'"
He uses the facts just to illustrate, to make it clear that he's not just
spinning this out of his brain. He has said (and I should have quoted him), "I
don't care who's right." He could never be a professor; he could never be an
academic. Academics have to be right about everything. He doesn't have that
attitude. He just wants to get on with the results.
Drucker is the most literary of business writers, and I wonder if two hundred years from now people will study him the way they study Castiglione's The Courtier-- as the creator of a sort of code for managers.
That's a very good analysis. And I think in a strange way he's like John Kenneth Galbraith. The literary man who is a writer and a thinker but truly a writer first.
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