Insights October 2009

Peter Drucker at 100: Wish you were here

Neil Seeman

Whenever I see a Peter Drucker quote pop up in a Powerpoint™ presentation I am reminded of Woody Allen in "Annie Hall". Alvy (played by Allen) is in a movie line with Annie (Diane Keaton), sharing his insights about Marshall McLuhan. An obnoxious fellow behind them in line disagrees with Alvy, boasting that he teaches a course on "TV Media and Culture" at Columbia.

Then, lo and behold, the real Marshall McLuhan appears: "I heard what you were saying.  You know nothing of my work.  … How you ever got to teach a course in anything is totally amazing!"

Drucker on My Mind

I am not a Peter Drucker scholar, and confess to being a late convert to his genius - and, in particular, to what healthcare leaders can learn from his approach to management science. In fact, I used to laugh at people who regarded the man and his ideas with such reverence. So many used to quote him (often in Powerpoint™) out of context (and still do).

Drucker died four years ago; but I wish he could materialize at conferences, as McLuhan did in "Annie Hall," and tell superficial adulators, "You know nothing of my work." If he were still alive, Mr. Drucker would be 100 years old this November. As Elinor Peebles notes, the centenary of his birth should elicit  renewed dedication to social responsibility among corporate leaders: perhaps, I might suggest, a pledge to clean up the muck on Wall Street.

After his death, I wrote a journal article in Healthcare Quarterly with my colleague Adalsteinn Brown, in which we pointed out that Drucker had inspired the quality revolution in healthcare. We came to this conclusion by counting citations to his work by other researchers. Drucker only discovered the varied challenges of healthcare institutions late in his career, and wished he could devote more time to unraveling their extraordinary complexity.

Drucker flew back onto my radar in May when I learned that Rick Wartzman, the Director of the Drucker Institute at Claremont Graduate University, had generously quoted our analysis of Drucker's influence in a Business Week article. In it, Mr. Wartzman recommended that the White House healthcare reform plan's success metrics be tied to an overarching management strategy. Linking measurement to a transparent system-wide strategy, we had argued in our article, was among Drucker's essential rules of good management.

Today, Drucker's contributions to the importance of tying measurement to strategy, and of inculcating an ethos of corporate social responsibility among CEOs, need to be revived. After the latest Wall Street scandal hit the news - an insider trading charge against Galleon Group founder Raj Rajaratnam - I started tracking how young people were responding online. On blogs and youth-oriented social networks, one of the most commonly associated words connected to the scandal is, simply, "greed". Within days of the insider-trading allegations against Galleon Group, the investors had fled, and the once elite hedge fund slid into liquidation. When the public smells greed or malfeasance, bottom-up blogstorms are merciless.

Confronting Greed

"I am appalled by the greed of today's executive," Drucker declared presciently in 2000, referencing, according to Mr. Wartzman, selfish leaders more interested in pocketing short-term gains than in building their businesses. Many observers sneeringly refer to such leaders as "financial engineers" or, simply, as people who run hedge funds.

Perception of CEO greed is of concern for many reasons, not least because it erodes trust in the private sector, which, whatever its failings, is an engine of innovation. Public sector healthcare is not immune to this atrophying public perception of leaders' motivations. As I argue in a recent book review of the Ontario Hospital Association's new Guide to Good Governance, the trust that patients and communities invest in any not-for-profit institution can quickly dissolve when there is a want of transparency.

If Drucker were alive …

If Drucker were alive to respond to this essay, he might well say I know nothing about his theories or their relevance to healthcare. But I am certain he would disagree with the notion that greed is unalterably good, as Oliver Stone's fictional Gordon Gekko famously intoned. He would further disagree with the idea that we should allow insider trading in order to keep "asset prices honest" - an idea peddled earnestly in this past weekend's Wall Street Journal by economist Donald Boudreaux of George Mason University. (UCLA's Stephen M. Bainbridge counters Boudreaux's arguments here).

The problem is not so much that the Gekko culture permeates the Zeitgeist, but rather that there are insufficient numbers of people in the leadership community brave enough to confront it head on. Personally brave (though humble), Drucker made a career out of wedding empiricism to ethics. I figure that's a leadership style worth emulating.

About the Author(s)

Neil Seeman is a writer, and Director and Primary Investigator of the Health Strategy Innovation Cell at Massey College at the University of Toronto.


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