How the Advice of the Past Can Save Us Now

Peter Drucker

By Brent Misso, entrepreneur.com, 09-05-2014

It was in 1954 that Peter Drucker first put forward his concept of "management by objectives" in his book, The Practice of Management. The basic premise of Drucker's new idea was that organizations need to jointly identify and align goals and responsibilities between employees and management.

The business world embraced Drucker, and over the next few decades organizations applied variations of the theory in an effort to motivate, coordinate, quantify and monitor the contributions of employees.

Management by objectives -- and its detractors. But, despite Drucker's tremendous popularity, there always was criticism. It has been pointed out that management by objectives is difficult to implement and that managers tend to overemphasize the control aspect of the theory. Even Drucker eventually said, "Management by objectives works if you know the objectives. Ninety percent of the time you don't."

One prominent detractor of the management by objectives theory was W. Edwards Deming.

In turn, Deming was probably most famous for his "plan, do, study, act" cycle, which also has been referred to as the Deming Circle. Although there was much common ground between the two theorists, Deming put forward a set of principles that argued against Drucker's management by objectives, which Deming believed was "an attempt to manage without knowledge of what to do."

Overall, Deming's work, which eventually led to the development of total quality management practices, asserted a reorientation of management away from metrics and control and toward people, creativity and leadership.

While the merits and shortcomings of these approaches continue to be debated, there is no doubt that both Deming and Drucker continue to inform business thought and practice to this day.

The last few decades have witnessed organizations dabbling in various forms of quality circles, ISO 9000, Six Sigma, lean manufacturing and strategic management.

Battle fatigue.  Each iteration has been met with opposition from the rank and file, if not from management itself. The various concepts are astoundingly complex, if not ambiguous and esoteric, and debates about theory, even among disciples of each system, can become convoluted and overheated. Adherents and detractors alike agree that these approaches are difficult to put into action.

For their part, employees quickly grow tired of working on the system more than actually doing the work at hand. Some turn passive aggressive toward the leadership's latest whim, since so many have been through the cycle before. Managers and employees alike stubbornly refuse to do the complicated steps, particularly when they begin to feel that they are now being forced to do two jobs. And there is a big stick and no carrot for being brutally honest about negative results. In practice, much of the jargon-filled theory ends up as constant measuring and tweaking of people.

The connected age, which is after all focused squarely on connecting people, is ripe for a renewed emphasis on technology-based information that works for people by allowing them to apply and communicate their ideas as never before. That's rather than their constantly being turned into time-drained, inferior machines set to tending high-maintenance systems tools and metrics. An overemphasis on control and avoiding errors only leaves people frustrated, depleted and angry. And this mode leads to stifled creativity, as well as a reluctance to own up to and learn from valuable mistakes.

As Drucker put it, "I would never promote a man into a top-level job who had not made mistakes, and big ones at that. Otherwise he is sure to be mediocre." If we can get past the gender-biased relics, Drucker shared a powerful message about groups being allowed to risk and fail, to learn and grow, without the burden of overly confident, misguided notions of mastery.

In Out of the Crisis  in 1982, Deming made the noble point that to "manage one must lead. To lead, one must understand the work that he and his people are responsible for."

Valuing people and relationships. Furthermore, for Deming, "The greatest waste of management," he said "is failure to use the abilities of people ... to learn about their frustrations and about the contributions that they are eager to make."

Deming and Drucker were both genuinely focused on the value of people and relationships. Both understood that good work requires balancing responsibility to the group with individual freedom to make decisions, and that good leadership does not focus on "people's weaknesses rather than their strengths."

On the 60th anniversary of The Practice of Management, perhaps it is time to revisit the full body of Deming's and Drucker's work: It's an age that now more than ever cries out for leaders who knows when to back off the watching, crunching and telling in favor of showing, asking and listening.

Let's reconnect with Deming's and Drucker's ideas about people. Let's revisit and apply their work on innovation and entrepreneurship. The connected age will derive the greatest dividends from human beings that are well led, engaged and connected. The two visionaries left society with a tool kit to help people rise to their potential in the new age.

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