Drucker’s Most Important Managerial Concepts

Much of what knowledge workers have encountered in the past 18 months seems unprecedented and unfamiliar. However, the wisdom of Peter Drucker, the “father of modern management,” remains timeless and applicable to today’s challenges faced by people in businesses and other organizations. Drucker coined the term knowledge workers in the late 1950s before it was obvious that there were many such people in the world.

A reminder is found in Peter Drucker: Shaping the Managerial Mind, published 22 years ago to coincide with Drucker’s 90th birthday. The author, John E. Flaherty, who died in 2016, lived to be 95 (as did Drucker).

He had a distinguished career in academia, particularly as Dean of the Lubin School of Business at Pace University in New York. Drucker became his mentor after first auditing a Drucker class at New York University in the mid-1950s.

Flaherty’s Peter Drucker: Shaping the Managerial Mind remains essential reading for anyone who wants to gain an informed sense of Drucker’s work, on management and beyond.

In the book, he extracted the essence from many of Drucker’s most important managerial concepts and demonstrates that they remain relevant for today’s issues. This is particularly true in the following five categories:

Managing Strengths

People today are in charge of their own employability and organizational advancement. Many are freelancers, or part of the gig economy, by choice or necessity.

Flaherty said Drucker advocated self-examination to know your best qualities, before learning about the best qualities of your colleagues or people you manage, which of course relates to Drucker’s construct of self-management.

Related to that, you shouldn’t feel threatened by the strengths and ambitions of others, which can be easier said than done. And while you should focus on your strengths, it is also necessary to identify your weaknesses and make those weaknesses irrelevant.

Decision-Making

This is a perennial challenge, and it’s not necessarily something people learn intuitively. It can too often mean repeating the bad habits of others. The increased availability of digital information can be paralyzing for making sound decisions.

Flaherty wrote that Drucker believed that managers and others in authority should welcome challenges and conflicting information in the decision-making process. Comfort and ease of reaching a decision should not be a goal. He also said Drucker urged people to consider what would happen if a decision wasn't made, resulting in nothing  happening.

The Information-Based Society

Drucker was ahead of his time in recognizing the importance of information and knowledge, before personal computers and the availability of online information.

Flaherty noted that Drucker advocated for continual learning in all professional jobs. This meant that managers and leaders also had to be teachers.

He also said that it was the personal/professional assets of people (including ongoing learning), more than money, that developed businesses and the economy.

These ideas predate ones that later came into wide usage, such as “human capital,” and “the learning organization,” made famous in Peter Senge’s 1990 book The Fifth Discipline: The Art and Practice of the Learning Organization.

Perception and Communication

It’s no secret that communication (particularly online, in virtual platforms like Zoom, and in social media) has become difficult and contentious in recent years. Many knowledge workers come across as selfish and self-centered.

Flaherty noted that Drucker believed people, striving for good communication, should put the focus on what the recipient of a message believes to be important, not on what they themselves deem to be important. This holds true whether online or video, by telephone, or face-to-face.

Further, people should consider that the recipient has, in Flaherty’s words, more than “one role and one reality,” and that they must accept that from their perspective, they may see things differently than others do.

Change and Opportunity

Innovation and entrepreneurship are hot topics and drive today’s economy, yet Drucker literally wrote the book on these areas in his classic 1985 book, Innovation and Entrepreneurship. Flaherty noted how the difficult concepts of change and opportunity relate to these concepts.

Drucker believed that organizations should convert their own and society’s problems into opportunities for new products, services and other businesses. Opportunity is also meritocratic; organizations must be deserving of receiving it. It also did not come mystically from heaven, but rather, Flaherty wrote, “is earned by systematic perception.”

Finally…another cherished area in Drucker’s body of work is the importance of effectiveness, highlighted in his classic 1967 book, The Effective Executive: The Definitive Guide to Getting the Right Things Done. I wrote about the 50th-anniversary edition when it was released in 2017.

Near the end of his book, Flaherty recognized that effectiveness, “requires a commitment to constant renewal that is achieved by acting on the question, what do we have to learn today in order to keep learning for tomorrow?”