Peter Drucker, R.I.P.

When I moved from Arkansas to Mississippi in early 2005, I brought with me three Bibles and a shelf of books by Peter Drucker. That gives you some idea of how much I appreciated his writing. I began reading the ones I had not read, and re-reading those that I had read.

The obituary in the New York Times did not begin to describe his accomplishments. The one in the Washington Post was better.

He was a pioneer in management studies. Yet his books went beyond management into social theory.

He is the source of the idea of the “knowledge worker,” as distinguished from the “industrial worker.” He saw what a profound effect this would have on society long before his peers did.

He understood the use of demographics. Some of his most notable predictions about America were based on trends that were already visible demographically — yet only he spotted them.

He believed in decentralization of business. He understood that business management in a market economy is a way to reconcile the conflicting goals of the many (workers) with the goals of those who employed them. Society always seeks to do this. Management has achieved this. The result has been economic growth that has transformed the world.

He understood that the discovery of management techniques in the twentieth century was one of the most momentous discoveries in man’s history.

He understood how management made America’s victory in World War II possible, how low-income, low-education workers could become highly productive through training and by breaking down their tasks into a series of component steps.

He had no grand scheme of management, no cookie-cutter management technique. There is no “Drucker theory.”

He was highly successful as an author, a consultant, and a speaker. Before him, there was no literature on management. He was the right man in the right place in 1939 when his book appeared, The End of Economic Man. From that day until the 1990s, he cranked out book after book. They all sold well. He was giving interviews almost to the end. Here is a fine one in the Wall Street Journal, published in 2000 and reprinted immediately after news of his death hit the news services.

In that interview, he tells a story. It is a story about nurses. Nurses are basic to health care. They know what they are doing. Nobody else in a hospital can do what they do. So, management had better ask them what needs to be done, not tell them. This should be obvious. It isn’t.

I just spent 10 days in the hospital. This is our local hospital, and I know the administrator. Nine of those 10 days I was in good shape, but I had to lie flat and motionless because I had an IV in each arm. So all the nurses came and chatted with me. They came to me in the hope that I would get across to the administrator something that irked them. I won’t tell you the details. It involved a change in policy imposed on the hospital by the HMOs that altered their professional status. They were being told what to do instead of being asked what should be done. They are used to that from physicians — but not from administrators.

And all I had to do was, when the administrator came to say hello, I said, “Look, you are creating trouble with your nurses. Yes, the HMO put pressure on you. But instead of issuing orders, you should call in the senior nurse from each group and sit down with them. You explain the pressure from the HMOs and ask, ‘How do we handle it best? What are your ideas?’ They may curse. They may say that HMOs are perfectly stupid. But they should make the decision on how to handle it. They should be treated as professionals who know their job.”

And he did it while I was still there. And in two days the atmosphere changed. The same nurses came to me and said, “This is again the place I like to work in.” That was all he had to do.

Two facts are worth noting. First, this inherent decentralization of knowledge is true in every large organization today. Knowledge of how to get things done is mostly at the bottom of the hierarchy. Second, When Peter Drucker spoke, management responded!

The only living author I can think of who has had as long a career, equally distinguished, is Jacques Barzun, whose magnum opus appeared in 2000: From Dawn to Decadence, a history of Western culture from the Renaissance until 1999.

They have provided models — targets — for my own writing and longevity.

November 14, 2005

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 17-volume series, An Economic Commentary on the Bible.

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