THOUGHT LEADERSHIP Peter Drucker – A lifetime of wisdom

Can we look upon nations as leaders, and if so, how do you assess America’s current leadership role in the world?
I don’t think you have the next 30 days to discuss that question. As to America’s role in the world, fortunately, we are no longer dominant. We are still militarily dominant, but not politically or economically, thank God. It is very dangerous to be the superstar. With China and India and the European Union emerging, we are fast becoming just another great power. And that will be hard to swallow, especially as we have 30 years of delusions of grandeur. Not because we were strong but because others were so weak.
A world economy is emerging in which we are not even the foremost power. That’s probably the European Economic Union. We will have to learn to be one of – make it half dozen – major players. America’s role in the world will increasingly be one of equals. America is not going to be the big bully and the big boss, as we are discovering in Iraq – the total disaster of Iraq – where we are creating only more turmoil. America’s great strength was that it stood for values not just power.

In 2002, President George W Bush awarded you the National Medal of Freedom, very high honour. How would you assess George W Bush, graduate of the Harvard Business School, as national leader?
I’m sorry, I never answer questions about politics. One assesses president 20 years after he has disappeared. We are just now beginning to understand Harry Truman and he is emerging as very great president. And I don’t think the time has come yet, when we are even able to assess this president’s father.

Over 30 years ago you coined the term “knowledge worker” and now knowledge workers abound. What are the particular challenges of managing these specialists?
I have been wrestling with that question for 30 years. How do you make knowledge worker productive? Knowledge by definition is highly specialised. Nobody is very good knowing many things. Let me say, journalist – and I’m an old one – is very good at being able to grasp the essence of other people’s knowledge and projecting it. But that doesn’t mean they know anything about psychology – they know how to write about it and how to make it accessible to the laity.
Knowledge is exceedingly specialised. And so knowledge workers have to be managed because, by itself, specialty is not productive. It’s got to be integrated with the knowledge of others, integrated into team of knowledge workers.
The second thing is that knowledge workers are basically, I wouldn’t say loners, but soloists. And to make them effective you have to be their protector, their eyes and ears, but also their tongue. And finally, as rule they don’t want to be managers. Good knowledge workers want to keep working in their specialities. That is very tough challenge, especially when the public prestige and the pay goes to managers, and thus, you have to develop career ladder for the professional specialist.

In 1993, you wrote book called The Post-Capitalist Society. Can you explain what that term means – and when, if ever, we will arrive at it?
We are already in the post-capitalist society, very much so. We have moved into the information society. Nothing is easier than to get money today, if you have the right information. It used to be the other way round. Anybody with PC, and today that means everybody in the developed countries, has direct access to all the information in the world and is beginning to learn to use it.
Not my generation, I’m 95. But my grandson’s. In this knowledge society you compete not by having money but by making knowledge productive. And we in America, so far, have been ahead in this. But not for very long.

You have always expressed great confidence in free markets, but you have also expressed reservations about capitalism per se. With the advent of the knowledge society, are your concerns about capitalism now irrelevant or do you still have reservations?
Free markets have their severe limitations but they are infinitely better than any alternative, especially as they are pretty fast at self-correcting. When they make mistakes, and they make plenty, they correct themselves. An economy, society, an organisation are balancing acts. Among the main jobs of management is to balance short-term results and long-term results, and market standing and innovation, and so on.
Management is balancer and above all it’s balancer between the different expectations of its constituents. The first constituent is not the shareholder. The first constituent is the consumer. If you don’t satisfy the consumer, there’s nothing else you can do.
Capitalism is always in danger of overbalancing toward the shareholder. The job of leadership, whether in the political sense or in business, is to restore the balance as it is needed at the time. Because that changes. Experiment is the strength of capitalism and no other system has that strength because no other system is pluralist.

Over the years you’ve written very sceptically about government. What are your views on the future of government, of government’s role in the post-capitalist society?
You know, one of the things one learns when one gets to be my age is not to predict. I’m sceptical of any institution that does not have severe restraints and limits on power. I’m sceptical of power. I’m an old conservative. Power without authority is the ultimate political evil. Government needs to be limited and restrained and confined to the jobs government can do.
There are many things government cannot do. Government is poor doer. Government is norm-setter. And if government attempts to do then it usually fails for the simple reason that government cannot abandon easily. It hangs on to things forever, until they are totally bankrupt, and even then it hangs on.
In the past 30 years we have been cutting government back to the things it does well, though it still does too many things. Fifty years, 100 years from now I hope government will look very different.

There’s lot of unease today over where the world is headed. What’s your sense of the direction in which the world is moving?
Anybody who is not uneasy about the direction in which the world is moving is blind and deaf. The belief in progress which we inherited from the 18th century is gone. The belief in western-dominated world is going. The emerging powers – China and India – are by no stretch of the imagination western nor will they westernise themselves the way Japan did 150 years ago.
We don’t understand this new world. We don’t know the extent to which the EU will become union or remain loose confederation. We don’t understand the way MERCUSOR (the Latin American EU) is going. We are in period of transition as fundamental as the 18th century before the Napoleonic Wars.
We know this much. The world is not going to be dominated by any one great power. For Americans that’s going to be very difficult thing to accept. Most of us still see world – the world of 1960 – in which America was the only great power and the only functioning economy. Today the EU is bigger. China is trying to build free-trade zone that will be bigger than America both as producer and consumer.
We Americans will have to learn that it is going to be very different world in which different values must co-exist. It will have western production and competitiveness, and it will be held together by information not by power. It will be rough period of transition for the next 30 years or so.

You’ve lived long life and focused intensely on how it is lived. Now you’re 95. What about the after-life, what about God? How are you thinking about the moment of transition that you are inevitably approaching?
I happen to be very conventional, very traditional Christian. Period. I don’t think about it. I’m told it’s not my job to think about it. My job is to say, “Yes, sir”.

That must be very

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