The heritage of Peter Drucker

This is an opinion article by an external contributor. The views belong to the writer.
The heritage of Peter Drucker
The work of Peter Ferdinand Drucker (November 19, 1909 – November 11, 2005) contributed to the philosophical and practical foundations of the modern business corporation. Credit: WikiCommons

Vienna, Austria, being a city that traces its origins to Roman Empire era Vindabona has been the birth place of many famous people. One of the most consequential, known to many business leaders, is the management thought leader, Peter F. Drucker.

Drucker, the author of 39 books, is the father of modern management consulting. Active in the US, Europe, Asia and elsewhere from the 1940s into the dawn of the 21st century, Drucker was celebrated decades before fabled consulting firms such as Bain and Boston Consulting Group were even founded.

Perhaps his most well-known thought is that “the best way to predict the future is to create it”. He also said that innovation opportunities “do not come with the tempest, but with the rustling of the breeze.” By this he meant that innovation requires entrepreneurs to constantly identify disruptions that are occurring, or which have just occurred, and to seize them as opportunities. He recognized that this essential behavior, was not easy as existing companies, contrary to start-ups, have the tendency to defend and maintain the status quo, rather than to continually reinvent themselves to respond to inevitable changes.

That’s why in these turbulent times of Covid variants, political turmoil and commercial and supply chain disruptions, Drucker’s wisdom is more relevant than ever. It reminds us that the Greek and Chinese  words for “crisis” are comprised of the two meanings  for “danger” and “opportunity.”

Drucker also believed that the purpose of business was to serve the customer and other stakeholders, including employees and society at large, not merely shareholders. To him, profit-making was not a company’s raison d’être but merely the means for it to continued existence. While this might make laissez-faire economist Milton Friedman spin in his grave, it is now considered the most enlightened business model.

Drucker, who died in 2005 at the age of 95, has as his living memorial, held annually in Vienna at the time of his birthday, the Global Peter Drucker Forum, a top-level management conference which has rightly been called the “Davos of Management”. This year was the 13th edition and in keeping with the constraints of the times it was held both virtually and in-person. Its theme was “The Human Imperative—Navigating Uncertainty in the Digital Age”.

The Forum days traditionally begin early with a guided meditation. This year it was led by a Zen Buddhist monk from Belgium, Bart Weetjens. Weetjens referred to Drucker’s famous 4 C’s: competence, character, compassion and community, noting that the Forum asked him to “support this community of excellence with guided meditations, because it makes these leaders more authentic, effective, pragmatic and universal.”

One of the most thoughtful high-level business leaders who spoke at the Forum was Huawei’s Deputy Chairman of the Board of Directors and Rotating Chairman Guo Ping. He showed himself, and the company of nearly 200,000 employees spread across more than 170 countries that he helps lead, to be true disciples of Peter Drucker’s 4 Cs. His talk demonstrated Huawei’s commitment to Drucker’s belief that the best way to predict the future is to create it, and that the purpose of business is to serve Huawei’s stakeholders.

He demonstrated that Huawei follows the principles laid out by Drucker of being able to “read the tea leaves”, identifying disruptions as they occur and using new opportunities to innovate to benefit its customers and other stakeholders, such as in its leadership in developing and applying 5G technology to address tomorrow’s needs today.

Guo explained how Huawei overcomes Drucker’s finding that enterprises and their employees tend to defend the old, rather than seeking out and implementing the new. They do this by creating a culture of innovation, giving employees the freedom to experiment and even to fail, so long as this experience is shared with others to allow them to profit from the lessons learned. It’s analogous to Winston Churchill’s admonition that “those who fail to learn from history are condemned to repeat it.”

Another insightful speaker was Maurice Levy, Chairman of the Supervisory Board of Publicis, the world’s third largest advertising and communications group. He described his five-year effort to encourage innovation by creating more synergies, eliminating aversion to change and knocking down barriers to win-win cooperation. The initiative called “no silo, no solo and no bozos” is thought to give Publicis a two to three year lead over its competitors.

One of the most inspiring presentations, and perhaps the most provocative of the Forum came from Adrian Woolridge, political editor of The Economist who put forth the thesis that for much of human history, societies could be characterized as low performance because jobs and roles were aristocracies that were based on the accident of birth, not merit. The vast majority of the best and the brightest were excluded from prominent roles because they weren’t born into a handful of aristocratic families, and therefore received no education and no opportunity for upward mobility. The model began to change only recently to high performance societies in the West, in the Age of Enlightenment with meritocracy largely replacing aristocracies.

Now however, the West is partially reverting back to a lower performance society. The irony is however, that at almost the exact same time, China is rediscovering its ancient meritocratic heritage of imperial exams and is engaged in rigorous competition internally among its population. If this is in fact the case, it could have  profound geopolitical consequences going forward.

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