My Life as a Knowledge Worker

The late leading management thinker describes seven personal experiences that taught him how to grow, to change, and to age–without becoming a prisoner of the past

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Peter F. Drucker

I was not yet 18 when, having finished high school, I left my native Vienna and went to Hamburg as a trainee in a cotton-export firm. My father was not very happy. Ours had been a family of civil servants, professors, lawyers, and physicians for a very long time. He therefore wanted me to be a full-time university student, but I was tired of being a schoolboy and wanted to go to work. To appease my father, but without any serious intention, I enrolled at Hamburg University in the law faculty. In those remote days–the year was 1927–one did not have to attend classes to be a perfectly proper university student. All one had to do to obtain a university degree was to pay a small annual fee and show up for an exam at the end of four years.

THE FIRST EXPERIENCE
Taught by Verdi

The work at the export firm was terribly boring, and I learned very little. Work began at 7:30 in the morning and was over at 4 in the afternoon on weekdays and at noon on Saturdays. So I had lots of free time. Once a week I went to the opera.
On one of those evenings I went to hear an opera by the great 19th-century Italian composer, Giuseppe Verdi–the last opera he wrote, Falstaff. It has now become one of Verdi’s most popular operas, but it was rarely performed then. Both singers and audiences thought it too difficult. I was totally overwhelmed by it. Although I had heard a great many operas, I had never heard anything like that. I have never forgotten the impression that evening made on me.
When I made a study, I found that this opera, with its gaiety, its zest for life, and its incredible vitality, was written by a man of 80! To me 80 was an incredible age. Then I read what Verdi himself had written when he was asked why, at that age, when he was already a famous man and considered one of the foremost opera composers of his century, he had taken on the hard work of writing one more opera, and an exceedingly demanding one. “All my life as a musician,” he wrote, “I have striven for perfection. It has always eluded me. I surely had an obligation to make one more try.”
I have never forgotten those words–they made an indelible impression on me. When he was 18 Verdi was already a seasoned musician. I had no idea what I would become, except that I knew by that time that I was unlikely to be a success exporting cotton textiles. But I resolved that whatever my life’s work would be, Verdi’s words would be my lodestar. I resolved that if I ever reached an advanced age, I would not give up but would keep on. In the meantime I would strive for perfection, even though, as I well knew, it would surely always elude me.

THE SECOND EXPERIENCE
Taught by Phidias

It was at about this same time, and also in Hamburg during my stay as a trainee, that I read a story that conveyed to me what perfection means. It is a story of the greatest sculptor of ancient Greece, Phidias. He was commissioned around 440 b.c. to make the statues that to this day stand on the roof of the Parthenon, in Athens. They are considered among the greatest sculptures of the Western tradition, but when Phidias submitted his bill, the city accountant of Athens refused to pay it. “These statues,” the accountant said, “stand on the roof of the temple, and on the highest hill in Athens. Nobody can see anything but their fronts. Yet you have charged us for sculpting them in the round–that is, for doing their back sides, which nobody can see.”
“You are wrong,” Phidias retorted. “The gods can see them.” I read this, as I remember, shortly after I had listened to Falstaff, and it hit me hard. I have not always lived up to it. I have done many things that I hope the gods will not notice, but I have always known that one has to strive for perfection even if only the gods notice.

THE THIRD EXPERIENCE
Taught by Journalism

A few years later I moved to Frankfurt. I worked first as a trainee in a brokerage firm. Then, after the New York stock-market crash, in October 1929, when the brokerage firm went bankrupt, I was hired on my 20th birthday by Frankfurt’s largest newspaper as a financial and foreign-affairs writer. I continued to be enrolled as a law student at the university because in those days one could easily transfer from one European university to any other. I still was not interested in the law, but I remembered the lessons of Verdi and of Phidias. A journalist has to write about many subjects, so I decided I had to know something about many subjects to be at least a competent journalist.
The newspaper I worked for came out in the afternoon. We began work at 6 in the morning and finished by a quarter past 2 in the afternoon, when the last edition went to press. So I began to force myself to study afternoons and evenings: international relations and international law; the history of social and legal institutions; finance; and so on. Gradually, I developed a system. I still adhere to it. Every three or four years I pick a new subject. It may be Japanese art; it may be economics. Three years of study are by no means enough to master a subject, but they are enough to understand it. So for more than 60 years I have kept on studying one subject at a time. That not only has given me a substantial fund of knowledge. It has also forced me to be open to new disciplines and new approaches and new methods–for every one of the subjects I have studied makes different assumptions and employs a different methodology.

THE FOURTH EXPERIENCE
Taught by an Editor-in-Chief

The next experience to report in this story of keeping myself intellectually alive and growing is something that was taught by an editor-in-chief, one of Europe’s leading newspapermen. The editorial staff at the newspaper consisted of very young people. At age 22 I became one of the three assistant managing editors. The reason was not that I was particularly good. In fact, I never became a first-rate daily journalist. But in those years, around 1930, the people who should have held the kind of position I had–people age 35 or so–were not available in Europe. They had been killed in World War I. Even highly responsible positions had to be filled by young people like me.

The editor-in-chief, then around 50, took infinite pains to train and discipline his young crew. He discussed with each of us every week the work we had done. Twice a year, right after New Year’s and then again before summer vacations began in June, we would spend a Saturday afternoon and all of Sunday discussing our work over the preceding six months. The editor would always start out with the things we had done well. Then he would proceed to the things we had tried to do well. Next he reviewed the things where we had not tried hard enough. And finally, he would subject us to a scathing critique of the things we had done badly or had failed to do. The last two hours of that session would then serve as a projection of our work for the next six months: What were the things on which we should concentrate? What were the things we should improve? What were the things each of us needed to learn? And a week later each of us was expected to submit to the editor-in-chief our new program of work and learning for the next six months.

I tremendously enjoyed the sessions, but I forgot them as soon as I left the paper.
Almost 10 years later, after I had come to the United States, I remembered them. It was in the early 1940s, after I had become a senior professor, started my own consulting practice, and begun to publish major books. Since then I have set aside two weeks every summer in which to review my work during the preceding year, beginning with the things I did well but could or should have done better, down to the things I did poorly and the things I should have done but did not do. I decide what my priorities should be in my consulting work, in my writing, and in my teaching. I have never once truly lived up to the plan I make each August, but it has forced me to live up to Verdi’s injunction to strive for perfection, even though “it has always eluded me” and still does.

THE FIFTH EXPERIENCE
Taught by a Senior Partner

My next learning experience came a few years after my experience on the newspaper. From Frankfurt I moved to London in 1933, first working as a securities analyst in a large insurance company and then, a year later, moving to a small but fast-growing private bank as an economist and the executive secretary to the three senior partners. One, the founder, was a man in his seventies; the two others were in their midthirties. At first I worked exclusively with the two younger men, but after I had been with the firm some three months or so, the founder called me into his office and said, “I didn’t think much of you when you came here and still don’t think much of you, but you are even more stupid than I thought you would be, and much more stupid than you have any right to be.” Since the two younger partners had been praising me to the skies each day, I was dumbfounded.
And then the old gentlemen said, “I understand you did very good securities analysis at the insurance company. But if we had wanted you to do securities-analysis work, we would have left you where you were. You are now the executive secretary to the partners, yet you continue to do securities analysis. What should you be doing now, to be effective in your new job?” I was furious, but still I realized that the old man was right. I totally changed my behavior and my work. Since then, when I have a new assignment, I ask myself the question, “What do I need to do, now that I have a new assignment, to be effective?” Every time, it is something different. Discovering what it is requires concentration on the things that are crucial to the new challenge, the new job, the new task.

THE SIXTH EXPERIENCE
Taught by the Jesuits and the Calvinists

Quite a few years later, around 1945, after I had moved from England to the United States in 1937, I picked for my three-year study subject early modern European history, especially the 15th and 16th centuries. I found that two European institutions had become dominant forces in Europe: the Jesuit Order in the Catholic South and the Calvinist Church in the Protestant North. Both were founded independently in 1536. Both adopted the same learning discipline.

Whenever a Jesuit priest or a Calvinist pastor does anything of significance–making a key decision, for instance–he is expected to write down what results he anticipates. Nine months later he traces back from the actual results to those anticipations. That very soon shows him what he did well and what his strengths are. It also shows him what he has to learn and what habits he has to change. Finally, it shows him what he has no gift for and cannot do well. I have followed that method for myself now for 50 years. It brings out what one’s strengths are–and that is the most important thing an individual can know about himself or herself. It brings out areas where improvement is needed and suggests what kind of improvement is needed. Finally, it brings out things an individual cannot do and therefore should not even try to do. To know one’s strengths, to know how to improve them, and to know what one cannot do–they are the keys to continuous learning.

THE SEVENTH EXPERIENCE
Taught by Schumpeter

One more experience, and then I am through with the story of my personal development. At Christmas 1949, when I had just begun to teach management at New York University, my father, then 73 years old, came to visit us from California. Right after New Year’s, on January 3, 1950, he and I went to visit an old friend of his, the famous economist Joseph Schumpeter. My father had already retired, but Schumpeter, then 66 and world famous, was still teaching at Harvard and was very active as the president of the American Economic Association.

In 1902 my father was a very young civil servant in the Austrian Ministry of Finance, but he also did some teaching in economics at the university. Thus he had come to know Schumpeter, who was then, at age 19, the most brilliant of the young students. Two more-different people are hard to imagine: Schumpeter was flamboyant, arrogant, abrasive, and vain; my father was quiet, the soul of courtesy, and modest to the point of being self-effacing. Still, the two became fast friends and remained fast friends.

By 1949 Schumpeter had become a very different person. In his last year of teaching at Harvard, he was at the peak of his fame. The two old men had a wonderful time together, reminiscing about the old days. Suddenly, my father asked with a chuckle, “Joseph, do you still talk about what you want to be remembered for?” Schumpeter broke out in loud laughter. For Schumpeter was notorious for having said, when he was 30 or so and had published the first two of his great economics books, that what he really wanted to be remembered for was having been “Europe’s greatest lover of beautiful women and Europe’s greatest horseman–and perhaps also the world’s greatest economist.” Schumpeter said, “Yes, this question is still important to me, but I now answer it differently. I want to be remembered as having been the teacher who converted half a dozen brilliant students into first-rate economists.”

He must have seen an amazed look on my father’s face, because he continued, “You know, Adolph, I have now reached the age where I know that being remembered for books and theories is not enough. One does not make a difference unless it is a difference in the lives of people.” One reason my father had gone to see Schumpeter was that it was known that the economist was very sick and would not live long. Schumpeter died five days after we visited him.

I have never forgotten that conversation. I learned from it three things: First, one has to ask oneself what one wants to be remembered for. Second, that should change. It should change both with one’s own maturity and with changes in the world. Finally, one thing worth being remembered for is the difference one makes in the lives of people.
I am telling this long story for a simple reason. All the people I know who have managed to remain effective during a long life have learned pretty much the same things I learned. That applies to effective business executives and to scholars, to top-ranking military people and to first-rate physicians, to teachers and to artists. Whenever I work with a person, I try to find out to what the individual attributes his or her success. I am invariably told stories that are remarkably like mine.

Adapted from Drucker on Asia: The Drucker-Nakauchi Dialogue , by Peter F. Drucker and Isao Nakauchi.

Peter F. Drucker, the world’s foremost pioneer of management theory, died of natural causes on November 11, 2005 at his home in Claremont, east of Los Angeles, one week before his 96th birthday. Drucker was the Marie Rankin Clarke Professor of Social Sciences and Management at Claremont Graduate University (CGU) from 1971 to 2003 where he continued to write and consult up to the time of his death. Drucker’s career as a writer, consultant and teacher spanned nearly 75 years. His groundbreaking work turned modern management theory into a serious discipline. He influenced or created nearly every facet of its application, including decentralization, privatization, empowerment, and understanding of “the knowledge worker.” The Austrian-born management guru coined such terms as knowledge workers and management by objective, he was celebrated for the clarity of his analysis and historical perspective rather than for any particular management theory that bore his name.

Copyright © 2006 Mansueto Ventures LLC.

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Best Quotes by Peter Drucker

A manager is responsible for the application and performance of knowledge.
 
Accept the fact that we have to treat almost anybody as a volunteer.
 
Borrowers of books – those mutilators of collections, spoilers of the symmetry of shelves, and creators of odd volumes.
 
Business, that’s easily defined – it’s other people’s money.
 
Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information.
 
Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.
 
Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.
 
Efficiency is doing better what is already being done.
 
Efficiency is doing things right; effectiveness is doing the right things.
 
Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm.
 
Executives owe it to the organization and to their fellow workers not to tolerate nonperforming individuals in important jobs.
 
Few companies that installed computers to reduce the employment of clerks have realized their expectations… They now need more, and more expensive clerks even though they call them ‘operators’ or ‘programmers.’
 
Follow effective action with quiet reflection. From the quiet reflection will come even more effective action. 

Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.
 
Knowledge has to be improved, challenged, and increased constantly, or it vanishes. 

Making good decisions is a crucial skill at every level. 

Management by objective works – if you know the objectives. Ninety percent of the time you don’t. 

Management is doing things right; leadership is doing the right things. 

Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake. 

Most of what we call management consists of making it difficult for people to get their work done. 

My greatest strength as a consultant is to be ignorant and ask a few questions. 

Never mind your happiness; do your duty. 

No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings. 

People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year. 

Plans are only good intentions unless they immediately degenerate into hard work. 

Rank does not confer privilege or give power. It imposes responsibility. 

So much of what we call management consists in making it difficult for people to work. 

Suppliers and especially manufacturers have market power because they have information about a product or a service that the customer does not and cannot have, and does not need if he can trust the brand. This explains the profitability of brands. 

Teaching is the only major occupation of man for which we have not yet developed tools that make an average person capable of competence and performance. In teaching we rely on the “naturals,” the ones who somehow know how to teach. 

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself. 

The best way to predict the future is to create it. 

The computer is a moron. 

The entrepreneur always searches for change, responds to it, and exploits it as an opportunity. 

The most efficient way to produce anything is to bring together under one management as many as possible of the activities needed to turn out the product. 

The most important thing in communication is hearing what isn’t said. 

The new information technology… Internet and e-mail… have practically eliminated the physical costs of communications. 

The only thing we know about the future is that it will be different.

The productivity of work is not the responsibility of the worker but of the manager. 

The purpose of a business is to create a customer. 

The purpose of business is to create and keep a customer. 

There is an enormous number of managers who have retired on the job. 

There is nothing so useless as doing efficiently that which should not be done at all. 

Time is the scarcest resource and unless it is managed nothing else can be managed. 

Today knowledge has power. It controls access to opportunity and advancement. 

Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.
 
Unless commitment is made, there are only promises and hopes… but no plans. 

We can say with certainty – or 90% probability – that the new industries that are about to be born will have nothing to do with information. 

We now accept the fact that learning is a lifelong process of keeping abreast of change. And the most pressing task is to teach people how to learn. 

When a subject becomes totally obsolete we make it a required course. 

©Inc.

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THE CORPORATION THAT PLAYS TOGETHER, STAYS TOGETHER:

AN INTERVIEW WITH PETER DRUCKER
 
Peter F. Drucker has been called “The dean of this country’s business and management philosophers” by the Wall Street Journal. The author of many books on management, economics, politics, and society, as well as several works of fiction, Mr. Drucker has cultivated a lifelong enjoyment of music and enjoys friendships with many great musicians. Mr. Drucker spoke with LIVE FROM LINCOLN CENTER’s John Goberman about leadership, decisionmaking, mission and structure, in the business world and the world of music. This interview was conducted in 1995 for an episode of “Backstage\Lincoln Center”.

QUESTION:
It seems to me that one of the most difficult things for people, especially in a bureaucracy, is when one person wants to do a thing one way and another person wants to do it another and they arrive at the middle. You can compromise in a business, but that doesn’t, at least in theory, happen in music. At least in theory, everybody in a string quartet is “on the same page”.

PETER DRUCKER:
Arnold Prosay, Mahler’s brother-in-law, was the first violin in the Vienna Philharmonic. The Prosay quartet in the early years of the century was the leading European string quartet. And Prosay was once asked, “who leads in your quartet?” He said, “That depends on what we play.” And then he said, “The quartet serves the music but every member serves the others.” That is the definition of a team. And that is what business is struggling with today.

The ideal team, like a string quartet, has no one leader, and every team member serves the others. The task is the master. However, the basic difference between all performing art and any other human enterprise, whether you’re talking string quartet or a play or symphony or an opera, is that there is a score. You have a composer’s explicit instructions to work from. In every other enterprise you write the score as you play.

QUESTION:
If I’m a major corporation and I’ve got 4 divisions that report to me, there’s no plan that’s the equivalent of the score?

PETER DRUCKER:
There’s a difference between a plan and a score. A score is down to the last detail. Everybody has a part, and the viola never takes the first violin part. And there is a beginning and an end. And there are clear assigned parts. The score assigns parts.

That means you have certain limited decisions. You may cut the reprise, but that’s about it. The decisions are about how to interpret, not how to write the score. And that is simply not true elsewhere, even on a sports team. Let alone in a business!

And there’s another difference. Take for example a Beethoven quartet- it lasts 49 minutes, but it’s 49 minutes of simultaneous effort, whereas in other corporate activity, there are things that have time span of 5 years and things that have a time span of 5 minutes at the same time. So there is a fundamental difference.

QUESTION:
And a quartet has no leader, per se, while an orchestra has a conductor. Is that “corporate”? What does a conductor really do?

PETER DRUCKER
Here is a good orchestra, and here is a conductor who blows in on Monday. He has 2 rehearsals with an orchestra he has never played with and to play the same piece of music they have been playing for a good many years. They know this music, he knows it, but they’ve never done this piece together.

And they play it and it sounds different. Why? What does he do? What is it that he does within fairly narrow limits of the score? What do they do that really makes that enormous difference without changing the score? How do they get – I don’t call it vision because it’s not what they see, it’s what they hear- how do they get it across?

There are two secrets of the good conductor – – he has a vision, and he communicates. But not only to the orchestra; he communicates to the audience, too.

And in a way, that’s one of the things that we need to learn in other organizations. The people at the top are the people who basically have to have a vision and have to communicate.

I’ve seen people who do this and I can’t figure out how they do it. Ever since I was a teenager, I’ve been interested in that. A friend of mine, Adler- a little older than I, my neighbor – became a very successful conductor and opera manager in San Francisco. I still remember when I was 10 and he was 14 and he was standing on the balcony making peculiar gestures, learning to conduct – and I tried to figure out, how does he get it to happen? How did he get it across to an orchestra, to prima donnas, to a chorus, and bring together what he heard and saw?

And by the way that’s important- because I think good opera conductors are both visual and aural. A good opera conductor produces a play and not just a sound. That’s why Bruno Walter, despite his enormous ability, never really was first rate conducting in opera; he conducted only the music.

In Vienna when I was a boy, in the ’20s, Richard Strauss was really first-rate. He had a keen sense of drama. The drama came to life, even with those overweight sopranos of my youth.

QUESTION:
Suppose you look at it the other way. Suppose a guy like Lou Gerstner comes into IBM, he does something completely different, is that like a conductor coming into a symphony? Is a conductor a model for a CEO like that?

PETER DRUCKER:
Yes and no. No because the conductor comes with the score in his hand. The task is the master. When it’s a score anybody in the orchestra can read, they have a common language, a common notation, a common frame. Whenever somebody comes into a turnaround situation like the IBM situation – especially turnaround of an old company, an old institution, or God help you, a Washington agency, where everybody knows the right way and the wrong way and our way – well, then you are in a disastrous situation. True, in a catastrophe you can get people to move who otherwise wouldn’t have moved. But even there, you have very little time to get across what you mean, and you have no score, no way to guarantee you’re all playing in the same key even.

When I was a high school boy in the 1920s, students could get a permit to attend rehearsals at the symphony and the opera. It beat going to school and it was an excuse that even our math teacher accepted. This was Vienna- music came first! And so I attended a great many rehearsals of great conductors without being really interested in the process.

I remember Clemens Krauss coming into his first big engagement with the Vienna Philharmonic, which did not take kindly to newcomers. They knew better. Anyhow, the rehearsal was a standard piece and instead of beginning with bar one, he turned the pages and said we’ll start with bar 182. Then he said, “Oboe, I want this much faster.”

It was a sacrilege. They had played for Mahler, they had played for Bruno Walter and Richard Strauss and here was this young newcomer – well, they didn’t give it to him. He had them play it 7 times- slow it down, speed it up. By the seventh time they hated him, but they knew if they didn’t want to be there another 11 hours, they’d better listen. Now Clemens Krauss and the Vienna Philharmonic never became friends. It was always adversarial. But they knew he meant it. And they respected it.

And I think he knew what he was doing.

A little later – I was already working as a young newspaperman in Germany- 1928-9 perhaps, ’30 – a friend told me to go to Aachen. “There’s a young kid your age. He’s going to be a great conductor.” His name was Karajan. So I went on the train and listened.

And yes, you heard it. This was somebody different, who had ideas and managed to do what he heard. And I think he basically did it by picking the places where he could say, “Oboe, I want this different.”

This is what you need in an organization- to be able to say, “from where I stand I hear everything, all the parts together, and what you are doing- oboe, or flute- your response no longer meets reality. So you must do something different.”

QUESTION:
So what does somebody coming into IBM to take charge or a conductor coming in and taking charge, have to do?

PETER DRUCKER:
First, they must do something right away. After 3 weeks or 3 months, everybody says oh, the same old thing. And they must do something that is serious.

Look at President Clinton coming in and wasting the first 6 months with gays in the military. Now this was something different, but it was not something which the public considered established him as having a vision.

He wasted those six months. And that is I think what you can learn from conductors. That conductor who comes into a new situation needs to establish himself very fast as having a different vision – and in a place where it matters.

That’s why that story about Clemens Krauss is important. He must have thought it through; he knew the Vienna Philharmonic, of course. He had grown up in Vienna. And he knew they had many exceedingly powerful conductors. Mahler, Bruno Walter, Richard Strauss. Powerful people. He was the young upstart. So he picked a piece they were familiar with and an important spot and forced them to hear it again. That made an impact. They never forgave him, I was told!

And that is important. If you take over a new situation, particularly a turnaround one, you have to move swiftly and confidently.

And let me say when Clemens Krauss came in, in the late ’20s, the Vienna Philharmonic had become sloppy and slovenly and complacent: we don’t care what the conductor wants to play, we play this, and we play it this way. Beethoven was their slogan. Krauss knew he had to establish himself very fast, and in a way which they had to say, “That son of a bitch is right. He is an SOB but he’s right.”

Years ago, Rudy Bing went to the Metropolitan in New York- at the time, a sloppy, complacent organization, run by the good ladies on the committee. Bing was not a musician as you know, but in the first new production, he took over and he got across to people that opera is not a social event but a musical event.

QUESTION:
Can you give me a corporate example?

PETER DRUCKER:
GE was doing exceedingly well, but there was general agreement that it had to change. And Jack Welch came in and immediately established a radically new corporate philosophy or mission: We are only going to be in businesses in which we can be worldwide number 1 or 2, and have substantial growth opportunities. Everybody said amen. And then he said, “this means getting out of half the businesses we are in no matter how profitable they are.”

Well, believe me – that shook people up. They were used to, “hey, whatever we do, we are the best.” And “if it’s a nice juicy profit, that’s good enough.” And he got rid of exceedingly profitable businesses that were just routine. Making wire harnesses, for example. Well, he got their attention.

That is what you have to do. It’s got to make sense and it’s got to fit.

QUESTION
How is being the turnaround chief like being a guest conductor?

PETER DRUCKER:
No, not like guest conductors. Some people who are exceedingly good at building an orchestra are not really good guest conductors. Karajan was a terrible guest conductor, because he basically had no respect for any orchestra other than his own, and it showed.

On the other hand, there are conductors who may not rank in the front rank who are wonderful guest conductors because they have studied the orchestra and know what it can do. I think in every single case, when a new conductor comes in and is successful – and it doesn’t have to be on the exalted heights, it would be true even of college orchestras – he first carefully picks the music he starts with. It has to fit the orchestra. If you come in as a new man and you pick something, the orchestra is simply not in tune with- that can be terrible.

QUESTION:
And then there’s the legacy, right?

PETER DRUCKER:
Of course. You know, Mahler was long dead when I grew up. But I was surrounded by people who had worked with him. Our next door neighbor had been the pianist in his auditions. And so on. And I was very curious to listen to Mahler stories.

Mahler left Vienna in 1907 after almost 10 years, because he didn’t see any challenges anymore. He had built the orchestra he wanted. He had built the opera he wanted. He was bored, frankly. And it was much more fun, as well as much more lucrative, to conduct in New York where what they paid him for one concert what Vienna paid him for a year. But he also knew he wasn’t going to live forever. And he wanted a new challenge. That’s a very wise man.

And that is something you need in all other organizations. The worst disease I see is the exceedingly competent man at the top who has stayed too long and has become the defender of what they did yesterday. It’s most acute in universities. But in businesses too.

The time to change is when you have accomplished. Look, Karajan is today being bad-mouthed. He stayed too long in Salzburg.

I personally believe that, with few exceptions, if you haven’t accomplished after 5 years, you won’t accomplish. That’s just as true in an orchestra, an opera as it is in a business or government agency.

If you are a strong personality, you are inevitably surrounded by acolytes; and further, instead of seeing the task, you see only “how we did it the last time.” Then the smart thing is to transplant yourself.

That, by the way, is why a good many of my conductor friends always insist on having some guest conductor assignments. They realize that one can hear something differently. They are invigorated by the struggle to bring that orchestra not up to their standard, but up to its standard. Because a really good guest conductor does not try to impose his standards on the orchestra, but to bring the potential of the orchestra out. That helps to you to hear again. And also helps you to realize that you have to work on getting it across.

QUESTION:
And what happens in a corporation?

PETER DRUCKER:
The most critical case in a corporation, especially a big one, is when everything goes well, when you have accomplished your objectives. When the temptation is to work twice as hard instead of saying, “We have accomplished our objectives, we have to think again.”

Here’s another thing you can learn from conductors and musicians: the great ones make very sure that there’s enough time between their playing the Beethoven Fifth now and the next playing of the Beethoven Fifth, so that they don’t try to repeat the last performance. They abandon it, basically! And then, the conductors I know go over the repertoire and the good ones add 2, 3, major pieces each year. They abandon, and they innovate.

Organizations need to build organized abandonment in.

QUESTION:
How would a corporation abandon its repertoire?

PETER DRUCKER:
A company should build a process that systematically looks at every product, every service, every process, every policy, every market with the question, “If we weren’t doing this already, knowing what we now know, would we start it, would we go into it?”

If the answer is no, then they must ask, “What do we do?” Not, “Let’s make another study!”

QUESTION:
Is there an example?

PETER DRUCKER:
Oh, plenty of examples. This is what Jack Welch did at GE, systematically. And this is what his closest associate did when he went over to Allied Signal. This is what in many ways Harry Truman did when he became President, that made him so effective. He saw that the domestic policies to which he had devoted his life up to then, were not the priority in 1945. So he painfully learned foreign affairs which he had no interest in at all and hated. He faced up to the new task.

If you don’t abandon, you can’t innovate.

The effective organizations learn systematically to abandon or at least to build systematic abandonment into their ordinary life cycle. Extra weight is a burden on the heart and the brain. And volume by itself is no great benefit.

I once asked Rudolf Serkin how he knew that he was ready not to play this Beethoven sonata or this Schubert sonata for 4 or 5 years, and Rudy said, “When I don’t look forward to practicing it, because I don’t hear anything new anymore; I begin to bore myself. I have to fight to do it. Then I say well, let’s wait a few years.” I always thought his best performance was that great Schubert sonata. You know, he didn’t play it for 6 years after he had done that great recording. He didn’t play it for 5 or 6 years because he felt he could only repeat it.

It wasn’t until the 1940’s that Rudy began to play French repertoire- Debussy and so on. As a younger man he couldn’t play it. But he became very excited about it later, and found it a little bit different. And this is why he picked it, because it challenged him. He listened to other people playing Debussy and he was very unhappy. His Debussy was a very idiosyncratic one. To me a convincing one, but not to everybody. But it excited him.

QUESTION:
But a business has to be somewhat consistent. You can’t constantly have new things and constantly throw away.

PETER DRUCKER:
The greatest challenge to organizations is the balance between continuity and change. You need both. At different times, the balance is slightly more over here, or slightly more over there, but you need both. And balance is basically the greatest task in leadership. Organizations have to have continuity, and yet if there is not enough new challenge, not enough change, they become empty bureaucracies, awfully fast.

In many industries, there are long periods in which you don’t want to innovate – but then usually comes a period when if you don’t change very rapidly, you’re out of business. The longer the dam holds back the water, the more violent is it when it ruptures.

And on the other hand, there are industries in which there is a habit of continuing experimentation, that requires you to question what you are doing. You have to accept that out of 5 things you try, one will work really well. One will be okay. And the other three – well, you liquidate them.

QUESTION:
For instance.

PETER DRUCKER:
The pharmaceutical industry, for example.
You figure there are 5 or 7 products, or product lines, in the lab that could become major businesses, if you are very good and the gods love you. But they give you no market position. And usually at the last moment it turns out that the competition is just a little bit better or a little bit faster. So you – you play the probability. The secret of being a top flight research director becomes not what new things to start, but what to abandon, what to get out of.

After 3 years you have to be able to look at your potential product and say, these are wonderful research results, but they only don’t add up. I hear something. I smell something. It doesn’t sound right.

Now that is not a logical decision. That’s a perception. And in a way one of the things I’ve been working on all my life is- how do you train perception?

My grandmother was an amateur pianist, a very good one. She was Arthur Schnabel’s first music teacher. She played under Brahms and under Mahler but the ladies in those days didn’t play in public. And Arthur Schnabel, whenever he came to Vienna,called on grandmother. He loved her, adored her and so I knew him and I was allowed to sit in on his master class.

Once in this class, there was a 12 year old girl named Leah who was technically superior. She was playing Schubert for Schnabel and he said, “Stop. You are faking it! You are playing the Schubert the way you think I play it. You don’t play what you hear.” And she looked at him with big eyes. And then he said “I’ll play it the way I think you hear it.” And what he played was a 12 year old very gifted child. And suddenly she heard it too.

QUESTION:
Maybe what we can say is that there’s extraordinary perception that a conductor enforces that also a CEO enforces, something like that.

PETER DRUCKER:
Has it occurred to you that practically no first class conductor was also a first class composer and vice versa? The only exceptions are Mendelssohn, Mahler and Richard Strauss. Mozart never conducted anything but his own work. Beethoven didn’t even do that. Brahms never conducted. Wagner was a disaster as a conductor except for his own operas. Bruckner couldn’t conduct worth a damn, nor could Debussy, nor Tchaikovsky. Why not?

I think this is a matter of a different perception. If you hear- and composers, I think, hear constantly, day and night- you are inside-focused. You don’t have the perception for other people’s work.

At least that is what Brahms said when he was once asked to conduct. He said, “I would not conduct what Beethoven wanted me to conduct. I would conduct what I wanted Beethoven to write.”

And when you look at the first-rate conductors, the ones I’ve known beginning with Bruno Walter or Solti, they perceive what’s in that score. They hear – their perception is outside-focused.
By and large, very few of them can work in more than one setting. Of course there are exceptions. Bruno Walter, for instance, was a wonderful accompanist, not just a conductor.

People who are really good at chamber music may also be orchestra players, but are very rarely conductors. I think it’s a different personality. It’s a different relationship to music. And the same is true in other organizations. There are people who cannot work in large organizations. I am an example. I have been a solo player all my life.

Early in World War II, when I was in Washington, struggling with the bureaucracy and getting nothing done, suddenly a 23-year-old young man who had never worked anyplace appeared as my assistant. Well, the bureaucracy ate out of his hand in about 24 hours, and he went on to make a brilliant career in big government organizations and big universities. And I think that’s a matter of temperament.

QUESTION:
How do the solo players survive in the corporate world?

PETER DRUCKER:
They don’t usually succeed in the big organization. Basically, they don’t belong there. They go off on their own, or they build their own little boutique within the big organization.

The balance between egos and team is a very important one.

Look again at the chamber music model, where basically the team serves each other. A good first violin is a chairman, not a boss. There is a constant give and take between those four people. I remember the Bush quartet, where it was considered sacrilege for anybody to make suggestions how the other one should play. That was not true of the Budapest, who were constantly fighting.

There are non-musical organizations where you have very similar situations. A really good faculty works like a good quartet. There are not very many! In a business organization, you have corporate partnerships – but they don’t outlast a generation. The people who built the business together are very similar to a string quartet. And they can’t be replaced.

And then you have the analogy to the orchestra with a strong conductor and maybe very strong first-desk people so to speak.
A really good business that has a chief executive officer also has 2 or 3 other colleagues, whether it may be the chief financial man or the chief technical man, the chief legal counsel or chief financial officer.

But a big organization is in many ways more like an opera company than anything else, because each of the constituent groups has its own value system. In the opera, there’s an orchestra and there are the soloists who sell the tickets; there’s the supporting cast who are musically equal to the soloists, but who play a different role, have a different function. There is a chorus. There are also designers, producers, and many others who work to bring them all together into a performance.

QUESTION:
How is that parallel with a corporation, that there are these different constituents.

PETER DRUCKER: In a corporation, there are engineers, and there are research people, and there are sales people. They all see a totally different corporation and a totally different universe of values. And yet you have to get them together to perform. And that is a very different challenge from that of the first violin and a good string quartet- the homogeneity is not built in.

A hospital is one of the most complex organizations we have. Here are people who have totally different backgrounds and points of view. And yet at 3 in the morning, an old lady goes into shock, and look what happens. In a sense it has a score, everybody is working off the same script. The floor nurse who is the executive officer, has to get the team together, a team in which everybody serves. Basically the clinic lab people have nothing in common with the respiratory people and so on. And the nurse has to bring them together into serving in a crisis.

And that is akin to an opera. Most of the things in a hospital have been rehearsed and been done before, and you follow. It’s not as clear a script as a Haydn quartet, but still you have been there, done it, rehearsed it.

This is an old story, that when Rudy Bing got his first general managership, there was a big party and one of the bright young things asked him, Mr. Bing, aren’t you terribly afraid of these prima donnas with their tantrums and he looked at her and said, “My dear, that’s my job. And her job is to bring in the box office, and when the playbill says Tosca, she sings Tosca.”

QUESTION:
A symphony conductor isn’t the servant of the viola section. But he has to allow them somehow to play, doesn’t he.

PETER DRUCKER:
Different ones are different. The great strength of Karajan was that he didn’t allow them and his great weakness was that he didn’t allow them. Bruno Walter gloried in bringing out what the woodwinds could do. But that also limited him.

It is much easier for a organization to innovate if it has a common style, than it is if you encourage stylistic diversity. Much easier. On the other hand, if you encourage that diversity, you are much better equipped to face up to a crisis where something that has never been done has to be done than if everybody for 20 years has been marching to the same drummer.

QUESTION:
In chamber music, making a decision about how something is going to be played, the ensemble may talk about it, but what they’re not going to do is come down in the middle. They’re either going play it one way or another way, but the bureaucratic resolution of “splitting the difference” is not available to them. In an organization, when you make a decision, very often you come down in the middle.

PETER DRUCKER:
When you talk of anything with the performing arts, the first decision in the performing arts is “what do we play?” And the second one is “how?” That is unique in the sense that you have a score to pick from and you make your decision, we are playing this Schubert quintet.

In anything else, the first decision is very different. It’s “What are we going to concentrate on? What is crucial?”

And then comes the question of how – and perhaps the great strength of anybody at the head of an organization is in identifying focus. The great danger is not the bureaucratic one of trying to please everybody and ending up with a meaningless compromise, but not to spend enough thought and enough time and enough courage on the decision about what is important at this time, for this organization, about what one thing it is on which everything else hinges.

Call it “What is our business?” or better, “What is our theory of the business?” That’s a question that never comes up in a musical performance!

Now that establishes the focus. Successful organizations think through what I call the theory of the business. What do we really put our chips on, what do we get paid for, what are we here for, what is the difference we want to make? That is not picking an existing score. That is totally alien to playing music.

In an organization, if the theory of the organization isn’t clear, if you don’t have one, you flounder. And if you have one and it becomes obsolete, you’ll go down very fast. It happened to Sears, it happened to GM, it happened to AT&T, it happened to IBM. It wasn’t incompetence or bureaucracy; the theory had become obsolete. No longer valued.

It’s actually very dangerous to be one of those that are good for 50 years, as AT&T was or IBM, because everybody believes it’s holy writ. If you have to think about it every 5 years, it’s much healthier.

But once you have identified your focus, then you orchestrate. Then you look at people see what core competencies are needed to do this. Then you build a team- and believe me, this is just as true in baseball as it is in General Motors- by looking at what people or groups can do, and envisioning their role and defining what they should be accountable for in the common effort.

That’s writing the score, rather than playing it.

And then you have another challenge: what are results?
In a musical performance, results are self-defining.
In a business, sure, the financial analysts say the bottom line is “results”. But everybody knows better! The bottom line is a consequence, not a cause, of this theory of our business.

You have to take these questions seriously, or you just drift. There the tendency to compromise is fatal.

In playing music, the issue might be, this is too slow, this is too fast. But you have no question about what you are trying to do. You always talk about how. This is a great difference. The score is your master.

QUESTION:
But how do you resolve it, when you have 2 members of a team, and one wants it this way, one wants it that way.

PETER DRUCKER:
Effective teams handle that in different ways. Some teams do it simply by saying, we followed you the last time, now you’ll follow us, and it works. Others do it by respecting the authority of competence in given areas. There may be the wise man, the editor who basically who will not make decisions unless they are controversial. And then he makes a decision and that’s it. Wherever he sits, it’s the head of the table.
Others do it using conflict resolution, that is the ideal. In the 20s and early 30s, a very able woman, Mary Parker Follett, wrote about it; you use conflicts to understand an issue, to learn what it is really all about and to transcend it. You should always do that with major issues. You should never ask in major issues who is right, not even what is right, but rather, what do these people see, or what do they hear or understand, that leads them to that particular conclusion? Then you make a decision.

Now that takes insight, perception. By asking that question, what is that person seeing, you begin to train yourself to perceive it.. And then you don’t see a conflict, you see people seeing different realities. And then you can resolve it.

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