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PETER F. DRUCKER | 1909-2005

Prolific Father of Modern Management

November 12, 2005|James Flanigan and Thomas S. Mulligan | Special to The Times

Peter F. Drucker, the down-to-earth business thinker who defined the role of management guru, died Friday at his home in Claremont. He was 95.

During more than 60 years as an author, professor and consultant to some of America's biggest corporations, Drucker challenged people's thinking about organizations and popularized the notion of the postindustrial "knowledge worker."

"Peter could look around corners," philanthropist Eli Broad, who knew Drucker for 30 years, said Friday. "He would say things that seemed rather simple but in fact were very profound. He saw the future."

Former General Electric Co. Chairman Jack Welch credited a pithy question from Drucker with helping him understand how to restructure the far-flung GE empire, a sometimes-wrenching process that turned the company into a stock market dynamo and made Welch one of America's most celebrated managers.

For The Record
Los Angeles Times Monday November 14, 2005 Home Edition Main News Part A Page 2 National Desk 2 inches; 90 words Type of Material: Correction
Drucker obituary -- An obituary for management guru Peter F. Drucker in Saturday's Section A reported incorrect information on his survivors. The article said Drucker's son, Vincent Drucker, lived in San Rafael, Calif. He lives in Dallas. The article also said daughter Cecily Drucker lived in San Francisco. She lives in Mill Valley, Calif. The name of another daughter, Kathleen Spivack of Watertown, Mass., was omitted from the list of survivors. Also, daughter Joan Winstein was identified as Joan Weinstein. Audrey Drucker was incorrectly identified as one of Drucker's daughters.

"Drucker said: 'If you weren't already in this business, would you enter it today? And if not, what are you going to do about it?' " Welch recalled Friday night. "Simple, right? But incredibly powerful."

Drucker's simple question ultimately led to Welch's operating maxim that if a GE unit could not be No. 1 or No. 2 in its field, it should be jettisoned.

Claremont Graduate University said Drucker died of natural causes. He was the Marie Rankin Clarke professor of social sciences and management at Claremont from 1971 to 2003, and he continued to write and consult from the campus until his death.

Drucker was often called the "father of modern management." But on the occasion of his 90th birthday, he described his life work much more simply:

"I looked at people, not at machines or buildings," he said. That approach led to nearly three dozen books and thousands of articles that formed nothing less than a guide to the 20th century economy.

The former newspaperman did not think up economic theories or elaborate systems of business operation. Rather he looked at people working, put them in historical context and saw a new liberal art: management.

"Unlike many philosophers, he spoke in plain language that resonated with ordinary managers," Intel Corp. co-founder Andrew S. Grove said in a statement. "Consequently, simple statements from him have influenced untold numbers of daily actions; they did mine over decades."

General Motors Corp., which invited Drucker to study its corporate structure in 1943, provided his laboratory and his epiphany. He was then a professor at Bennington College in Vermont and author of two books on society and industry.

At GM in wartime, Drucker saw "the corporation as human effort" -- "people of diverse skills and knowledges working together in a large organization," he wrote in "Concept of the Corporation," the 1946 book that emerged from his two years of studying GM.

It was something new in world history, different from the "command and control" methods of organizing labor that had characterized the building of the pyramids or Napoleon's army or even Henry Ford's assembly line.

"The overseer of the unskilled peasants who dragged stone for the pyramids did not concern himself with morale or motivation," Drucker wrote.

But modern management is different, he said. "Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant," he said in various ways in his 18 books on the profession of management.

Drucker saw management as a necessity for the society of organizations that existed in the 20th century. It was a discipline vital not only for commercial business, but also for hospitals, churches, labor unions and youth groups.

Drucker "was like the exceptionally insightful anthropologist who visits a remote tribe and understands things about the tribe that the tribe itself doesn't understand," said Michael Useem, management professor at the Wharton School of the University of Pennsylvania.

That was true at Edward Jones, the St. Louis-based stock brokerage, which started a 20-year relationship with Drucker in the early 1980s. At the time, the company thought it had a winning strategy of locating one- or two-person offices in small towns, where it wouldn't attract the competitive attention of such Wall Street giants as Merrill Lynch, managing director Doug Hill recalled Friday.

But Drucker said he suspected that the firm's niche had less to do with geography than with the conservative individual investors who formed the backbone of its clientele. There were plenty of conservative investors in big cities, Drucker said.

The firm did a study and discovered that, yes, its few metropolitan offices were doing as well as its rural ones, Hill said. That led to an expansion into larger cities, which now account for 60% of Edward Jones' business, Hill said.

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