Peter F. Drucker, Management Guru, Dies at 95
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Prolific Father of Modern Management
By James Flanigan and Thomas S. Mulligan
Special to The Los Angeles Times
November 12, 2005
Peter F. Drucker, the down-to-earth business thinker who defined the role of management guru, died Friday at his home in Claremont. He was 95.
During more than 60 years as an author, professor and consultant to some of America's biggest corporations, Drucker challenged people's thinking about organizations and popularized the notion of the postindustrial "knowledge worker."
"Peter could look around corners," philanthropist Eli Broad, who knew Drucker for 30 years, said Friday. "He would say things that seemed rather simple but in fact were very profound. He saw the future."
Former General Electric Co. Chairman Jack Welch credited a pithy question from Drucker with helping him understand how to restructure the far-flung GE empire, a sometimes-wrenching process that turned the company into a stock market dynamo and made Welch one of America's most celebrated managers.
"Drucker said: 'If you weren't already in this business, would you enter it today? And if not, what are you going to do about it?' " Welch recalled Friday night. "Simple, right? But incredibly powerful."
Drucker's simple question ultimately led to Welch's operating maxim that if a GE unit could not be No. 1 or No. 2 in its field, it should be jettisoned.
Claremont Graduate University said Drucker died of natural causes. He was the Marie Rankin Clarke professor of social sciences and management at Claremont from 1971 to 2003, and he continued to write and consult from the campus until his death.
Drucker was often called the "father of modern management." But on the occasion of his 90th birthday, he described his life work much more simply:
"I looked at people, not at machines or buildings," he said. That approach led to nearly three dozen books and thousands of articles that formed nothing less than a guide to the 20th century economy.
The former newspaperman did not think up economic theories or elaborate systems of business operation. Rather he looked at people working, put them in historical context and saw a new liberal art: management.
"Unlike many philosophers, he spoke in plain language that resonated with ordinary managers," Intel Corp. co-founder Andrew S. Grove said in a statement. "Consequently, simple statements from him have influenced untold numbers of daily actions; they did mine over decades."
General Motors Corp., which invited Drucker to study its corporate structure in 1943, provided his laboratory and his epiphany. He was then a professor at Bennington College in Vermont and author of two books on society and industry.
At GM in wartime, Drucker saw "the corporation as human effort" — "people of diverse skills and knowledges working together in a large organization," he wrote in "Concept of the Corporation," the 1946 book that emerged from his two years of studying GM.
It was something new in world history, different from the "command and control" methods of organizing labor that had characterized the building of the pyramids or Napoleon's army or even Henry Ford's assembly line.
"The overseer of the unskilled peasants who dragged stone for the pyramids did not concern himself with morale or motivation," Drucker wrote.
But modern management is different, he said. "Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant," he said in various ways in his 18 books on the profession of management.
Drucker saw management as a necessity for the society of organizations that existed in the 20th century. It was a discipline vital not only for commercial business, but also for hospitals, churches, labor unions and youth groups.
Drucker "was like the exceptionally insightful anthropologist who visits a remote tribe and understands things about the tribe that the tribe itself doesn't understand," said Michael Useem, management professor at the Wharton School of the University of Pennsylvania.
That was true at Edward Jones, the St. Louis-based stock brokerage, which started a 20-year relationship with Drucker in the early 1980s. At the time, the company thought it had a winning strategy of locating one- or two-person offices in small towns, where it wouldn't attract the competitive attention of such Wall Street giants as Merrill Lynch, managing director Doug Hill recalled Friday.
But Drucker said he suspected that the firm's niche had less to do with geography than with the conservative individual investors who formed the backbone of its clientele. There were plenty of conservative investors in big cities, Drucker said.
The firm did a study and discovered that, yes, its few metropolitan offices were doing as well as its rural ones, Hill said. That led to an expansion into larger cities, which now account for 60% of Edward Jones' business, Hill said.
In a metaphor that he used repeatedly, Drucker likened the society of organizations to an orchestra. "Each institution has to do its own work the way each instrument in an orchestra plays only its own part. But there is also the score, the community. And only if each individual instrument contributes to the score is there music."
Peter Ferdinand Drucker was born Nov. 19, 1909, in Vienna, the son of a civil servant in the Austro-Hungarian Empire. His father, Adolph, was head of the export department in Austria's government, an important post.
Coming from a society of strict class distinctions, Drucker was ever mindful of the social ladders in various countries. In the home of a senior civil servant such as his father, Drucker would remark with irony later in life, "We never had businessmen to the house."
Drucker studied at universities in Hamburg and Frankfurt, Germany, receiving a doctorate in international law in 1931. He never used the title "doctor," often referring to himself instead as a newspaperman, which he was in the early 1930s in Frankfurt.
Drucker's 1933 essay on a leading conservative philosopher angered the new Nazi government, which banned his writing. Drucker moved to London and worked for a merchant bank.
In 1937, Drucker married Doris Schmitz, whom he had known in Frankfurt, and the couple moved to the United States, where he wrote for British newspapers, taught part time at New York's Sarah Lawrence College and published his first book, "The End of Economic Man: The Origins of Totalitarianism."
A favorable review by Winston Churchill in the Times Literary Supplement in London helped launch the book toward bestseller lists in England and the United States. It would be one of 14 books that Drucker wrote on social, economic and political questions, in addition to his books on management.
Drucker in the 1940s advocated the principle of worker responsibility, which caught on in postwar Japan before U.S. business belatedly took it up.
Drucker never made predictions but for almost two decades he called attention to the rise of what he termed "knowledge work" and "knowledge workers."
He taught business management at New York University until 1971, when he headed West to Claremont Graduate School, now Claremont Graduate University, whose business school is now called the Peter F. Drucker and Masatoshi Ito Graduate School of Management.
Drucker was 61 when he went to Claremont. He wrote the majority of his 32 books in the nearly three decades that followed.
He had an acute sense and knowledge of history. In "Management Challenges for the 21st Century," a book published in 1999, Drucker noted that a version of the high-tech entrepreneurs so lionized today appeared before in history, after the invention of the printing press in 1450.
For nearly 100 years, printers were showered with honors and riches, as technology wizards are today. But then printing came to be taken for granted, and the printers' place of honor was taken by publishers, the controllers of "content."
Drucker was precise in teaching business managers what they were to do, such as determining "the purpose of the business," as he put it, and identifying the customer of the company.
"Profit," he taught generations of business leaders, "is not a reward of doing business but a cost" because it must be paid out to those who financed the business or plowed back in to allow the business to continue.
A protean scholar, Drucker also was an expert on Japanese art, which he noted had perfected abstraction and geometric form a century before Monet and Picasso.
Drucker is survived by his wife, Doris; a son, Vincent Drucker, of San Rafael, Calif.; three daughters, Audrey Drucker of Puyallup, Wash., Cecily Drucker of San Francisco and Joan Weinstein of Chicago; and six grandchildren. Details on a pending public memorial will be available at cgu.edu
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Flanigan is a former Times Business columnist and Mulligan is a Times staff writer. Staff writers Terril Yue Jones and Claudia Luther contributed to this article.
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