Drucker maintained that the best way to predict the future is to create it
December 2022, Photo: wikipedia
In reviewing my notes from the time when I was Peter Drucker’s student one of his requirements stands out. He invariably favored action, over response to the actions of others. Sometimes the action he advocated was difficult, untried, or had been unsuccessful when tried by others previously. But his success ratio was high, and he got spectacular results with this approach. He also noted that once someone accomplished anything difficult successfully, others were able to duplicate the same accomplishment, but didn’t necessarily receive the same benefits or acclaim.
For example, the first one to run a mile in four minutes or less was Englishman Roger Bannister in 1954. Prior to that many said it couldn’t be done. This included doctors and exercise physiologists many of whom had concluded that the human body just wasn’t built to move that fast. Since Bannister broke the "four-minute barrier" running a mile in less than four minutes have been beaten by 1,663 athletes, including even high school students. Most received only modest acclaim for their achievement.
Another difficult physical event accomplished for the first time in those days was the successful climbing of Mount Everest. It was almost unimaginable to contemplate. Mount Everest’s isolated peak stood at 29,029 feet (8,849 meters) and is the highest point on earth. Although many attempted it, all had failed, and some had died in the attempt. So, it too was thought to be impossible to accomplish. More than half of this difficult task had to be done while inhaling oxygen. However, Everest was finally conquered by Edmund Hillary with his native guide, Tenzing Norgay in 1953. Hillary was knighted and he became Sir Edmund Hillary for his achievement. He said that to accomplish this extraordinary feat the main key was to overcome the uncertainty and fear in ourselves, not the actual event. Although still far from easy, since 1953, more than 2000 climbers have climbed Everest successfully, but none are as well-known as Hillary.
This works for groups, too. The "Miracle on Ice" was an ice hockey game during the 1980 Winter Olympics between the United States and the Soviet Union. The Soviet Union was a four-time defending gold medalist, experienced, and heavily favored over a recently recruited and unknown American team which had barely played together. Incredibly the United States won 4–3! But one needn’t look that far back. A few days ago, the US Men’s National Soccer Team advanced to Round 16 in the 2022 World Cup by beating heavily favored and experienced Iran team 1-0! It almost seems that sometimes to win, you need to be the predicted loser.
Bruce Rosenstein demonstrated Drucker’s unique use of first action in his book, Create Your Future the Peter Drucker Way (McGraw-Hill, 2014). Creating the future is accomplished according to Rosenstein by developing and applying what he described as a forward-focused mindset and Rosenstein explained how to do it.
That was Peter Drucker’s attitude alright, and you can find this at the core of many of his teachings. He maintained that the best way to predict the future is to create it. To his students he added that “planning for an event, is only a statement of good intentions unless it immediately degenerates into the hard work of implementation.” He further explained that successful implementation was achieved primarily by leadership, and he also explained the difference between leadership and management. “Good leadership is doing the right things while good management is doing things right.” Even ten years after his death, Drucker is sometime described as the greatest management thinker in the previous century, but Drucker focused even more passionately on the action part, that is, leadership, writing that 50 per cent of the outcome of any endeavor is due to leadership and explaining that “there is nothing so useless as doing efficiently that which should not be done at all.”
Drucker’s Notion of Planned Abandonment
Drucker’s unique concept of planned abandonment by change managers confirmed that he meant what he said. With planned abandonment a change manager intentionally abandons a profitable product or procedure and uses the resources thereby saved for developing and marketing a product or procedure which has greater potential. “The successful change leader,” he insisted, “puts every product, every service, every process, every distribution channel, every customer and end-use, on trial for its life. And he does so on a regular schedule.” A most powerful example of this concept’s success was illustrated when Jack Welch who as the new CEO of General Electric hired Drucker as a management consultant.
On questioning, Welch told Drucker that there were a number of businesses of high potential that he would like to acquire but that GE didn’t currently have the resources or capability. Drucker looked over a list of profitable businesses that GE already owned. Drucker shook his head and said, “Too bad, if you abandoned a few of these you would have the money to invest in those of higher potential that you would like to acquire. Welch agreed. “If so, what are you going to do about it?” Drucker asked immediately. Welch realized that Drucker was suggesting that he abandon profitable businesses. For the first time Welch realized that he had immediate access to money and personnel resources to invest in the businesses of higher potential that he wanted. Abandoning older but still profitable businesses never occurred to him before. Abandoning profitable businesses wasn’t what MBA schools taught or investors wanted. Welch decided that if a GE business was not number one or two in its market, and it was unlikely to become such, he would close it or sell it even though it was profitable. This was a revolution in management thinking and clearly assumed the power of action over reaction. Welch issued orders to abandon by selling or liquidation businesses which though profitable had no potential for becoming number one or two in their markets. He took a lot of criticism from his own managers as well as from outside experts and the business press when he gave these orders. But an unexpected phenomenon occurred as a result. The value of GE’s total holdings increased significantly. When Welch retired nine years later, GE’s value had increased by an enormous 4000%! Experts, some of whom had been strong critics of Welch previously now called him a management genius. When Welch retired, the GE Board awarded Welch the largest retirement package in history, while Fortune Magazine named him the manager of the century. Welch gave Drucker full credit.
Drucker explained to his students why his planned abandonment theory worked:
– Older profitable businesses required company resources in money, people, priorities, and just plain maintenance even though their potential was limited.
– Businesses with high potential helped to motivate employees to see, set, and reach higher goals that were formally thought impossible.
–Abandoning profitable businesses of lower potential and acquiring businesses which had significantly greater potential resulted in expansion and higher profits with less effort and fewer resources.
Initiating Actions In New Ways
Drucker observed that by initiating actions in unexpected ways, unexpected results benefiting the business might occur. For example, Drucker noted that Julius Rosenwald had built Sears Roebuck not only by satisfying his customers and innovation but by social responsibility, specifically his efforts at education of minorities. Drucker concluded that there was more to building a business than profit and that the notion that business should be measured based solely on amount of profit obtained was in error. He noted that society expected a business to contribute, and not only through taxes, but through social responsibility to its employees and the public it served. While a business was expected to be profitable, it was also expected to make social contributions and that employees worked not only for pay, but also to be part of something that was bigger than themselves.
Consequently, while Drucker insisted on measurements and estimates to analyze every business endeavor, he was opposed to “quantitative analysis for business decisions” if maximum profit was the sole focus and he shifted from the notion that management was a science with profit maximization as the major objective to management as a liberal art with the inclusion of measurement, and consideration of knowledge and actions in economics, ethics, history, humanities, philosophy, social sciences, physical sciences, and psychology – all liberal arts. Maintenance of profitability was a necessity like oxygen in breathing, but not necessarily profit maximization.
Drucker insisted on action based on total analysis of all aspects affecting and resulting from business. Those that followed his guidance found themselves profitable and successful in their occupations and those involved in them both in operations and as customers.
*In the above photo: Tenzing Norgay and Edmund Hillary (Left) after successfully completing the first ascent of Mount Everest at 11.30am, 29 May 1953.
*הכותב ד"ר ביל כהן הנו מומחה בתורת המנהיגות. ד"ר כהן הינו מייג’ור גנרל בדימוס בחיל האויר האמריקאי, בעל תואר דוקטור בניהול מאוניברסיטת קלרמונט. כתב למעלה מ- 50 ספרים שתורגמו ל- 22 שפות בנושאי ניהול ומנהיגות. ביל כהן שימש כיועץ בעמדות בכירות וכמרצה באוניברסיטאות הטובות בארה”ב בינהן ביה”ס לניהול באוניברסיטת קלרמונט וב-UCLA. בנוסף, הוא מעביר הרצאות וסמינרים בנושא מנהיגות בכל זרועות הצבא האמריקאי ובאקדמיה הצבאית וזכה בפרסים על הרצאותיו בעולם. מעבר להיותו גנרל בצבא ארה”ב, ד”ר כהן הנו בעל דרגת רב סרן בחיל האויר הישראלי והשתתף בקרבות אוויר במלחמת יום כיפור. שימש בתפקידי ניהול בכירים במספר חברות וכיהן כנשיא של שתי אוניברסיטאות פרטיות. ביל כהן היה חבר דירקטוריון במספר מועצות מנהלים ומועצות סחר עירונית, ממשלתיות ושל תאגידים שונים.ביל כהן היה תלמידו הישיר לדוקטוראט של פיטר דרוקר אבי תורת הניהול המודרנית שאמר עליו בין היתר כי ” ביל כהן היה סטודנט אשר אני והקולגות שלי למדנו ממנו לפחות כפי שיכולנו ללמד אותו”.
ד"ר ביל כהן הוא נשיא המכון לאמנות המנהיגות, מייסד ונשיא לשעבר של המכון ללימודי ניהול מתקדם בקליפורניה CIAM וחבר בצוות המומחים של קבוצת ד"ר עדנה פשר שות'
קבוצת ד"ר עדנה פשר ושות' היא הנציגה הבלעדית של תוכנית CIAM בישראל
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