His Key Ideas
Drucker is considered the single most important thought leader in the world of management, and several ideas run through most of his writings:
- Decentralization and simplification. Drucker discounted the command and control model and asserted that companies work best when they are decentralized. According to Drucker, corporations tend to produce too many products, hire employees they don’t need (when a better solution would be outsourcing), and expand into economic sectors that they should avoid.
- The concept of “knowledge worker” in his 1959 book The Landmarks of Tomorrow. Since then, knowledge-based work has become increasingly important in businesses worldwide.
- The prediction of the death of the “Blue Collar” worker. The changing face of the US Auto Industry is a testimony to this prediction.
- The concept of what eventually came to be known as “outsourcing.” He used the example of “front room” and “back room” of each business: A company should be engaged in only the front room activities that are critical to supporting its core business. Back room activities should be handed over to other companies, for whom these tasks are the front room activities.
- The importance of the nonprofit sector, which he calls the third sector (private sector and the Government sector being the first two). Non-Government Organizations (NGOs) play crucial roles in the economies of countries around the world.
- A profound skepticism of macroeconomic theory. Drucker contended that economists of all schools fail to explain significant aspects of modern economies.
- A lament that the sole focus of microeconomics is price, citing its lack of showing what products actually do for us, thereby stimulating commercial interest in discovering how to calculate what products actually do for us; from their price.
- Respect for the worker. Drucker believed that employees are assets not liabilities. He taught that knowledgeable workers are the essential ingredients of the modern economy, and that a hybrid management model is the sole method of demonstrating an employee’s value to the organization. Central to this philosophy is the view that people are an organization’s most valuable resource, and that a manager’s job is both to prepare people to perform and give them freedom to do so.
- A belief in what he called “the sickness of government.” Drucker made nonpartisan claims that government is often unable or unwilling to provide new services that people need and/or want, though he believed that this condition is not intrinsic to the form of government. The chapter “The Sickness of Government” in his book The Age of Discontinuity formed the basis of New Public Management, a theory of public administration that dominated the discipline in the 1980s and 1990s.
- The need for “planned abandonment.” Businesses and governments have a natural human tendency to cling to “yesterday’s successes” rather than seeing when they are no longer useful.
- A belief that taking action without thinking is the cause of every failure.
- The need for community. Early in his career, Drucker predicted the “end of economic man” and advocated the creation of a “plant community” where an individual’s social needs could be met. He later acknowledged that the plant community never materialized, and by the 1980s, suggested that volunteering in the nonprofit sector was the key to fostering a healthy society where people found a sense of belonging and civic pride.
- The need to manage business by balancing a variety of needs and goals, rather than subordinating an institution to a single value. This concept of management by objectivesand self-control forms the keynote of his 1954 landmark The Practice of Management.
- A company’s primary responsibility is to serve its customers. Profit is not the primary goal, but rather an essential condition for the company’s continued existence and sustainability.
- A belief in the notion that great companies could stand among humankind’s noblest inventions.
- “Do what you do best and outsource the rest” is a business tagline first “coined and developed” in the 1990s by Drucker. The slogan was primarily used to advocate outsourcing as a viable business strategy. Drucker began explaining the concept of outsourcing as early as 1989 in his Wall Street Journal (WSJ) article entitled “Sell the Mailroom.” In 2009 by way of recognition, Drucker was posthumously inducted into the Outsourcing Hall of Fame for his outstanding work in the field.
From wikipedia: https://en.wikipedia.org/wiki/Peter_Drucker