‘Peter the Great’ by Stefan Stern, Management Today, December 2011

This article is based around the annual Drucker Forum, recently held in Vienna. It is a tribute to the ‘Father of Management’ that 102 years after his birth, 65 years after his first book and six years after his death, his name still attracts a wide audience and high calibre speakers. When analysing modern problems, ‘what would Drucker say?’ still seems a relevant question to many modern management thinkers.

It is also true that many of Drucker’s arguments and quotations have remarkable relevance to present day issues and prove his remarkable gift of foresight. In 1997, well into his eighties, he predicted that, during the next recession, the differentials between top pay and that of lower levels would cause ‘an outbreak of bitterness’. Not a bad call!

One of the speakers at the conference was Charles Handy, another guru who has questioned the values of modern day business. His view as expressed at the conference is that modern managers lack sympathy and that the quest for shareholder value has allowed too much uncaring behaviour. The conference also gave a platform to Mark Kramer who worked with Michael Porter on the development of the concept of ‘shared value’ which we have (critically) reviewed in past blogs. Their ideas could be seen as a further development of Drucker and Handy’s thinking in that they advocate using the profit model to ‘improve people’s lives’. However, our concerns about the wooliness of the shared value concept were backed up by Adrian Wooldridge of the Economist who claimed that Drucker, the originator of the concept of Management by Objectives and a great believer in focus, would never have embraced such a vague idea.

Perhaps the most interesting contribution to the debate was the surprising admission by Harvard professor Rakesh Khurana that business schools had played ‘a large and ignoble part’ in encouraging negative attitudes to business in the last quarter of the 20th century. He went even further than Handy by suggesting that the obsession with shareholder value and the assumption that rewards had to be linked to it, have created a self-interested culture. The assumption that managers have to be bribed to do their jobs, often at the expense of moral values, has been the main driver of the negative behaviours which drag down reputation of business.

Khurana has his own agenda here because he is the driver of the move by Harvard to make management more of a profession - as reported in previous blogs - but it is difficult to challenge some of his arguments. However to blame the business schools or the managers themselves seems to be missing the point; the underlying cause must be those investors who look for performance based on shareholder value, often over the short term. No CEO can push for moral values if he is out of a job.

Overall, an interesting article that made me wish I’d attended Drucker’s annual forum; it also caused me to think that maybe MTP should be represented in future years.

Click here to view this article in full:

http://www.managementtoday.co.uk/features/1105852/why-drucker-relevant-ever/