Peter Drucker opened up our minds

Just as the microprocessor opened up the possibilities of our machines, Peter Drucker opened up our minds. Drucker was the preeminent business philosopher of the 20th century, creating the concept of management as a practical discipline. His intellectual rigor and prescience separate him from the pack of futurists.

His great strength is an extraordinary ability to interpret the present, to read the lines in the sand that get to the heart of the matter. In more than 30 books, he has written lucidly on many of the crucial business trends of the past 50 years, identifying the “knowledge society” as the cornerstone of the modern business.

I remember meeting him at his 90; he lived in a leafy Los Angeles suburb. He moved there in 1971, expecting to stay for three months. “That’s one reason I don’t teach long-term planning,” he said. Drucker swam daily, exhibited obvious pride in the blooming violet flowers of a jacaranda tree, speaks lovingly of his grandchildren. He was spry, able to hobble along on a cane as fast as many people can walk and can put down a cooling, double espresso in a single gulp.

Drucker’s speech was slower, but his mind no less sharp. His ideas were as important as ever, and he continued to spread them as fast as possible. He had produced a five-part series of hour-long management programs for Corpedia, that was acquired by NYSE Euronext in 2012. The online programs were animated, colorful, jammed with information and sure to become a touchstone of corporate skills training. Forever, Drucker remained the guru of management.

Many of the newer Internet companies are struggling to keep their businesses afloat. What are they doing wrong?

Drucker: I don’t think they are doing anything wrong. They’re just not doing anything right. It’s highly probable that the age in which you automatically got lots of money by calling yourself a dot-com is over. Many of these Internet startups were not startups of business, at all. They were just stock exchange gambles. If there was a business plan, it was only to launch an IPO or be bought. Not to build a business. And sometimes I am rather appalled by the greed of today’s executives.

Is it too late to pull out of the tailspin? Possibly. Venture capital will be increasingly hard to get for many of them. I once worked with a man named Cecil Rose. A financial man. He said that any startup that promises to have profits in less than five years is a phony, but any startup that doesn’t have a positive cash flow in 18 months is also a phony. Now that may be too orthodox today. The fact that some Internet startups take a long time to become profitable is fine. Amazon.com is typical. I am not worried about it. But very few of the Internet startups will have a positive cash flow ever. And that’s not a business.

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