Interview with Elizabeth Haas Edersheim

Author of The Definitive Drucker

What inspired you to write The Definitive Drucker?

I am convinced that Drucker’s insights and approaches have never been more important to management than they are right now. Drucker ‘s ideas, coupled with his critical questions, help managers take a fair amount of uncertainty out of the future by liberating them to elevate their expectations and act with imagination and courage to deliver results. In a 21st-century business environment where constraints of time and distance are gone and change comes as fast as the blink of an eye, Drucker’s “take” is absolutely essential to managers.

Drucker was known as a 20th-century pioneer, so why do you think he is so essential today?

There have never been as many opportunities for individuals and organizations as there are in this world where businesses and consumers alike all have access to global citizens and global providers. No one was better at helping identify opportunities and translate opportunities into action plans than Peter F. Drucker. Management’s job is to turn opportunity into results, and who better to learn from than Drucker.

How did you decide whom to interview?

Peter and I went through his incredible Rolodex. We chatted about everyone from entrepreneurs to CEOs who became household names. From those discussions, I wrote to scores of leaders. From there, Drucker’s name opened doors all around the world.

If Peter Drucker were alive today, what would he tell people wanting to go into business?

Well, this is what he told me in the final stage of his life: Be effective and ethical. And enjoy it. To do that, he often talked about:

  • Learning and investing in your strengths—few people know their own strengths.
  • Finding something you are passionate about—there is nothing more important. You will be spending more time at your work than in anything else you do.
  • Viewing yourself as an enterprise to grow—recognize that you will be part of the business community five times longer than the life of the average corporation. Never stop challenging and growing and reinventing.
  • Working with people you like and respect and are oriented towards trying things and taking action.

In your mind, what are the fundamental lessons from Peter Drucker every business-person must embrace?

  1. Business is a practice dependent on people, very much like medicine.
  2. Practice means that theory does not come from working inside an academic environment. Theory comes from seeing what works and doesn’t work, and testing the repeatability of what is seen. Look outside—be a social ecologist—and never stop learning.
  3. If you constantly abandon your assumptions and notions of constraints, that will help keep you focused on the future where the opportunity resides. Don’t stay mired in the past, where the opportunity is more often than not no longer relevant. Profits are your ability to invest in tomorrow. There is always a balance to maintain—learning and repeating what works and taking risks to create tomorrow.
  4. People are the critical resource of any enterprise. People are the capabilities, the knowledge, the productivity, and the capital of the enterprise. A successful enterprise brings out the strengths in every person, renders weaknesses unimportant, and delivers value to every customer.

Why is Peter Drucker called the father of management?

The emergence of management as a discipline may be the pivotal event of our time. Management has existed, in some form or other, as long as people have needed to work together. In its modern form, management evolved beginning about 150 years ago with the development of the first national telegraph and rail networks. The infrastructure allowed unprecedented speed of communications and flow of goods, creating a new scale and scope to be managed.

Until some 50 years ago, management was about physical logistics, scientific tools, and engineering marvels, with little attention given to the “human management” aspect.

That changed in 1945, with publication of Drucker’s Concept of the Corporation, the culmination of Drucker’s two-year study of GM’s corporate structure. That effort gave Drucker access to GM’s legendary patriarch, Alfred P. Sloan.

Concept of the Corporation, introduced the ideas of decentralizing decision-making and managing for the long-term by setting a series of short-term objectives. GM wasn’t pleased with the book initially, and the popularity of Concept of the Corporation was completely unexpected, even by Drucker and his publisher. It became an immediate bestseller. That one book launched the discipline of management. Management suddenly became a quantifiable and comprehensible phenomenon with the techniques and practices that could be studied, taught, and implemented.

The wisdom and logic of Concept of the Corporation quickly spread well beyond GM to the rest of corporate America. General Foods required every executive to read and study the book (and hired Drucker as its consultant), and Charles Mortimer credits it with the creation of a successful multi-brand company. “It was a path to let us do what we dreamed of and had no idea how to.” General Electric borrowed from the book (and hired Drucker as its consultant) in its 1950 reorganization and subsequent efforts over the next 30 years. Between 1945 and 1954, Drucker also worked with two railroads, two World Bank presidents, The American Management Association, Chase Bank, and Oxford University.

By 1952, Drucker needed a book on management that he could share with clients. There was no such book and he had had sufficient experience observing “best practices” to integrate his perspectives into a how-to book. Then came his best-known book, The Practice of Management, published in 1954. It was the first to view management as a practice in a human environment, not a science or series of techniques, and it posed three now-classic business questions: What is our business? Who is our customer? What does our customer consider valuable?

Throughout his life, Drucker continued to grow and share his ideas through print, lectures, and advisory engagements, while applying his own approaches to provide uncannily accurate predictions—evidence that it is indeed possible to remove uncertainty from the future over and over again. For example, in the early 1950s, when other business leaders figured the worldwide market for computers was in the single digits, he predicted that computer technology would thoroughly transform business. Peter Drucker pioneered the idea of privatization and the corporation as a social institution. Long ago, he coined many of the terms commonly used today such as “knowledge workers” and “management by objectives.”

I like what Geoffrey Colvin wrote in Fortune in 2005, “Think of virtually any hot topic in business today other than the Internet—global competition, executive pay, the rise of information and services —and odds are that Drucker wrote about it with extraordinary perception, probably before 1970. It’s one thing to talk about the rise of the ‘knowledge worker.’ It’s another thing to predict it in 1959.”

In 2005, in what would be the last year of his life, Drucker’s influence on business and economic thinking and practice was evident in diverse countries in totally different stages of development. His 51-year-old classic, The Practice of Management, was the number four business book in Brazil. That year, The Age of Discontinuity, first published 36 years earlier, was number eight in Korea. The Essential Drucker, at six years old—a mere fledgling, was number eleven in Japan. And, The Daily Drucker, published in 2005 (with Joe Maciariello), was number eleven on the Wall Street Journal’s bestseller list. Oh, and by the way, Drucker was 95 years old then.

Why is there so little direct reference to Peter Drucker’s work in business school curriculum?

I think there are two primary reasons for this absence. First the academic world tends to create theory and then test it. Peter observed reality and translated that into reproducible theory—a very different approach.

Secondly, his observational and anecdotal style sometimes led to charges that Drucker’s supporting facts weren’t rigorous enough or backed by quantitative research. Yes, Drucker used anecdotes to make points, and on occasion the details did not tie to the actual events. In fact, the Wall Street Journal researched several of his lectures in 1987 and reported that some of the anecdotes were factually wrong.

This is very much Drucker’s strength and weakness. His anecdotes are straight forward and translatable – they may also be parables.

But evidence of his value is found in just how ordinary many of his insights now seem: A company should streamline bureaucracy; managers should look for more efficient models for organizing work; results are obtained by exploiting opportunities, not solving problems; and so on. The fact is, time continues to prove Drucker right. That he was sometimes careless with the details should not be a deterrent to the ongoing value of his insights.

Whom do you think this book will appeal to?

This book is written for the next generation of leaders and people who want to be part of redefining the world in which we live. If the book helps even a few leaders do the right thing well, I will consider it a success.

What do you want people to take away from The Definitive Drucker?

Our great opportunity, our future, lies in stepping up to the real challenges we face, looking outside ourselves and our organizations, asking tough questions and giving real consideration to the answers, testing ideas against history’s lessons, and encouraging others to join us in doing what needs to be done. And to do so with a strong moral compass.

In Peter’s spirit, let’s regularly challenge ourselves to answer two fundamental questions. First, what are we going to demand from ourselves to make this a better world? And second, how are we going to make sure that business is run on the same principles that we teach our children?