The Relevance of Peter Drucker’s Management Philosophy in Today’s World

M S Rao

“The most valuable assets of a 20th-century company were its production equipment. The most valuable asset of a 21st-century institution, whether business or non-business, will be its knowledge workers and their productivity.” — Peter F. Drucker

Peter Drucker needs no introduction in the world. He was an imaginative thought leader who predicted the birth of knowledge economy and knowledge workers long ago. He coined several concepts including management by objectives (MBO) and knowledge workers. He encouraged nonprofits to build better communities and societies. He remarked on nonprofits in his award-winning book, Managing the Non-Profit Organization: Principles and Practices as follows: “The “non-profit” institution neither supplies goods or services not controls. Its “product” is neither a pair of shoes nor an effective regulation. Its product is a changed human being. The non-profit institutions are human-change agents. Their “product” is a cured patient, a child that learns, a young man or woman grown into a self-respecting adult; a changed human life altogether.” He added immense value to the discipline of management, and is known as the father of “modern management.” He authored 39 books including the award-winning The Practice of Management, The Effective Executive, The Essential Drucker and Management Challenges for the 21st Century. He authored books in diversified genres including social, political, business and management. He had the uncanny ability to interlink knowledge from different disciplines.

Peter Drucker was a multifaceted personality who worked as an employee, educator, author and advisor before becoming a management guru. He pioneered the concept of decentralization, privatization and social institutions. He believed in the empowerment of employees and treated employees as assets. He predicted the usage of computers and conversion from manual workers into knowledge workers. He predicted the rise of Japan as an industrial power. Ford Motor Company successfully implemented his ideas after World War II. General Electric under the leadership of Jack Welch effectively applied his ideas.

Peter Drucker could see what could not be seen by others. He envisioned future which no other management thinker could envision. He received several awards and honors globally for his contribution. BusinessWeek remarked, “What John Maynard Keynes is to economics or W. Edwards Deming to quality, Drucker is to management.” Warren said. “He had a way of saying things simply. Peter was far more than the founder of modern management, far more than a brilliant man, one of the greatest minds of the 20th century. He was a great soul. If I summed up Peter’s life in three words, it would be integrity, humility and generosity…. Peter was the only truly Renaissance man I’ve ever known. He had a way of looking at the world in a systems view that said it all matters.” After reading Peter Drucker’s first major work, The End of Economic Man in 1939, Winston Churchill described Drucker as “one of those writers to whom almost anything can be forgiven because he not only has a mind of his own, but has the gift of starting other minds along a stimulating line of thought.”

Who are Knowledge Workers?

Knowledge workers are extraordinary workers with amazing ideas, insights, experiences and judgments. They invent new products and services, and are able to predict the future technology and knowledge. They are always ahead of their times and technologies. They are the pillars of organizations with visionary mindset to take their organizations to great heights. Peter Drucker defines them as “high level employees who apply theoretical and analytical knowledge, acquired through formal education, to develop new products or services”. He emphasized the importance of knowledge workers and mushrooming services sectors. He remarked, “It is the individual knowledge workers, who, in large measure, will determine what the organization of the future will look like and what kind of organization of the future will be successful.” The future organizations will be led by specialized knowledge workers unlike the present knowledge workers. Hence, it is essential to transfer knowledge from experienced professionals to inexperienced individuals within the organization. Presently knowledge is growing exponentially. There is more demand for specialized knowledge which is likely to change rapidly with advanced technology. Additionally, it has become a major challenge to predict the knowledge as it is tough to anticipate where the technology would take us to next level. Hence, there is an urgent need to adopt new tools and techniques to ensure seamless supply of knowledge in the knowledge pipeline to ensure organizational excellence and effectiveness. The future knowledge will be highly volatile, and is based on the volatility in the technology. It is essential to encourage continuous research to forecast the future knowledge and technological trends. Hence, it is equally essential to encourage employees to learn, unlearn and relearn quickly to keep pace with the rapid global changes.

Knowledge workers are the people with knowledge as their capital. They are different from manual workers. In 1959, Peter Drucker coined this concept in his book, The Age of Discontinuity. He said that knowledge workers are the people who primarily work with information and make use of it in the workplace to achieve better performance and productivity. He further added, “The most important, and indeed the truly unique, contribution of management in the 20th Century was the fifty-fold increase in the productivity of the manual worker in manufacturing. The most important contribution management needs to make in the 21st century is similarly to increase the productivity of knowledge work and the knowledge worker.” He predicted that the knowledge workers will play a crucial role for the rapid growth of the global economy.

Knowledge workers are the result of the mushrooming services sectors. They capture the global attention currently, and are the future leaders. They dominate the entire economy especially the services sectors. They are consultants and collaborators rather than contractors and competitors. They know where the revenues originate, and work on them passionately. They grow in the corporate ladder quickly and excel as leaders. They are smart and wise workers who believe in delivering qualitative results. They strive for excellence rather than perfection.

With the mushrooming services sectors there is a need for more knowledge workers who are paid for their knowledge and thinking. For instance, engineers, scientists, accountants, researchers, educators, authors and consultants and the professionals coming from such similar professions belong to the category of knowledge workers. In fact, knowledge workers are paid more than others. It is the consultants rather than the contractors who will earn respect and money. They constantly upgrade and update their knowledge through continuous research. They consult companies and gain exposure to the ground realities, and then do research to resolve those challenges through their innovation. Hence, consultants are better placed than contractors because they constantly reinvent themselves with the changing times and technologies.

The present world expects employees with a unique blend of mindset, toolset, and skillset to deliver goods and services effectively, and it is available only among the knowledge workers who are the leaders, and the carriers of knowledge to the next generation. If you want to grow professionally; ensure quick career growth and grab the opportunities, you must become a knowledge worker.

The Role of Knowledge Workers

Peter Drucker advised, “Knowledge has to be improved, challenged, and increased constantly, or it vanishes.” Hence, knowledge workers must not take their successes and positions for granted because what got them to the present status of knowledge workers may not help them reach the next higher level if they don’t reinvent regularly. They must write down where they stand in terms of talents, skills, knowledge and capabilities currently. They must write down where they would like to be after two or three years as it provides clarity in their minds, and helps achieve the desired objectives. It is always better to ink than to think. Hence, the knowledge workers must write down and take feedback regularly.

The Role of Organizations

Peter Drucker said, “All organizations say routinely ‘People are our greatest asset’. Yet few practise what they preach, let alone truly believe it.” Hence, companies must walk their talk by grooming the knowledge workers. Companies must find out their expectations and aspirations. In fact, knowledge workers basically look for the right professional ambience and talented people to collaborate to create more knowledge. They emphasize quick career growth and prefer working in an organizational environment free from politics. Most people think that it is the money the knowledge workers crave for, which is totally wrong. In fact, they look beyond money in the workplace apart from providing them with professional challenges.

Knowledge workers are the backbone of a modern economy and every organization must realize this fact and treat them as assets rather than as costs. Companies must realize their needs from time to time, and meet the same to ensure better performance and productivity. Above all, they must invest heavily to train and groom them as it is beneficial in the long run for employers and employees.

Challenges for Coaches

Peter Drucker remarked, “Making knowledge workers productive requires changes in attitude, not only on the part of the individual knowledge worker, but on the part of the whole organization.” Therefore, there is a huge challenge lying ahead for current coaches to manage both the employees and employers to bring out the desired objectives. In addition, the present knowledge workers are much superior to coaches in terms of knowledge. They are also well ahead of their times and coaches. Young knowledge workers (Gen Y) are much superior to elderly knowledge workers (Baby Boomers) as they are quick in thinking, and exposed to technology. They shift companies and acquire knowledge from multiple domains, synthesize and create more knowledge. Some of the young knowledge workers prefer becoming employers to employees. Hence, managing knowledge workers is a major challenge for them. However, passionate coaches enjoy coaching such knowledgeable coachees.

Individuals are Mortal and Ideas are Immortal

Joseph L. Badaracco once remarked, “In today’s environment, hoarding knowledge ultimately erodes your power. If you know something very important, the way to get power is by actually sharing it.” Knowledge is not the property of any individual. It is the asset of the intellectuals who acquire it, and it is the magnanimity of intellectuals who share it with others. It is not important whether the intellectual is an Indian, American, Asian, African, European or from any nationality. What is important is that the greatness of the intellectuals who share their knowledge with others to build a better society and world. Above all, ideas are more important than individuals because individuals are mortal while ideas are immortal. Hence, add value either in a small or a big way, and share it with others to keep your ideas immortal, and to keep this world a better place to live. Dalai Lama rightly remarked, “Share your knowledge. It’s a way to achieve immortality.”

Is Peter Drucker Relevant in Today’s World?

“Management by objectives works if you first think through your objectives. Ninety percent of the time you haven’t.” ― Peter F. Drucker

The concept of MBO is relevant as it helps set objectives to accomplish them. It saves time, money, energy and organizational resources. Several global organizations benefitted from it. The Economist quoted, “MBO is one of the rational school of management’s successful products.”

With the rapid growth in technology, the information is inundated. The people are able to leverage it to excel as knowledge leaders. Most of his ideas and insights are relevant even today because his research was based on future requirements in the discipline of management.

Peter Drucker ― Integrity, Humility and Generosity

“Organization has created an employee society… Knowledge workers are the new and growing majority – both the main cost and the main resource of all developed societies.” — Peter F. Drucker

Peter Drucker believed that management is an interdisciplinary subject and not confined to quantitative statistics in measuring profits as an outcome, but applicable to social missions and a catalyst for innovations to be delivered by people.

Peter Drucker offered tools and techniques to become your own successor as follows: diversify your efforts and outputs; develop a powerful personal brand; maintain a global outlook and world view; remain relevant; produce a consistently impressive body of work; and creative work that benefits others.

Peter Drucker’s management ideas and insights are pearls. He was a visionary leader who was far ahead of his time. He emphasized the significance of soft skills long ago when only hard skills were highly respected. He preferred soft leadership to hard leadership. He valued time and emphasized human resources, work-life balance, customers and nonprofits. He is more relevant today and his ideas and insights continue to inspire the world irrespective of the discipline. He was the rarest management thinker who added an immense value to the discipline of management with his philosophy, principles, and practices. The management thinkers across the world cutting across their national borders salute this management legend for his passion, vision and contribution.

Author Bio:

Professor M.S.Rao, Ph.D. is the Father of “Soft Leadership” and Founder of MSR Leadership Consultants, India. He is an International Leadership Guru with 37 years of experience and the author of 37 books including the award-winning ‘21 Success Sutras for CEOs’ He is a sought-after keynote speaker globally. He is passionate about serving and making a difference in the lives of others. He shares his leadership wisdom freely with the world on his four blogs. His vision is to build one million students as global leaders by 2030. He is a dynamic, energetic and inspirational leadership speaker. He can be reached at: .

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