Interview An Introduction to Peter F. Drucker --- Eight Faces
(An Interview with Weekly Toyokeizai)

Eighth Week: Who is Drucker?
--- Drucker talks of the future that has already happened

Toyokeizai: Please summarize Drucker's basic way of thinking.

In the world, there are those who say that truth exists and those who say it does not. If there is no truth, the law of the jungle, opportunism or selfishness will prevail. There will be neither fundamentals nor principles, neither society nor civilization. We must admit that there is truth. However, recently in Japan, I am afraid that the thought and behavior that holds the idea that there is no truth began to prevail. I hope that it is only the very temporal characteristics of the transition period.

Assuming that there is truth, we have two schools of thought: one says we can grasp the truth, and the other says we as imperfect beings cannot grasp it. The former school is rationalism, or so-called liberalism, with the example of Socrates and French Enlightenment. The latter is American and English Orthodox Conservatism represented by the Founding Fathers of America. Drucker belongs to the latter.

Assuming that truth can be grasped, the only thing that they must do and can do is to let the people know it; enlighten them. They stop there. They can be fierce as an opposition and try to destroy everything that does not fit with their truth, but cannot act when in power. Spreading a detailed blueprint, enthusiastic planners urge people to understand it.

Worse than that, after such rational liberals fail, an absolutist who claims that he himself acquired the truth will appear without fail. He even says, "I am the truth." After Socrates, dictatorship appeared. After the French Enlightenment, Robespierre's reign of terror appeared. After the height of Economic Man in the form of bourgeois capitalism and socialism, Marx, Lenin and Stalin appeared. After the predominance of biology and psychology, Hitler appeared. Those dictators merely stole the essence of liberals of the day, and asserted "I have the truth" or even "I am the truth."

Naturally the one with the truth has an obligation to make others follow his belief. It is not a right but an obligation. He has the obligation to guillotine those against him, shoot them, or send them to concentration camps. Those who do not understand the truth are against progress, people, and the nation. The one with the truth can do anything for the development of society and the happiness of the fellow beings.

The Orthodox Conservatism that Drucker stands with tries to create a better future. They possess vision. But they do not draw a specific blueprint. They solve each problem with practical tools. They know that there is no such a thing as a cure-all medicine. In a medical field people tried to find a cure-all for thousands of years, but now have given up. Instead the researchers have been searching for the best medicine for each disease.

For the structure of an organization, Drucker does not provide absolute solutions. Functional structure, federal decentralization, or teams have their strengths and weaknesses. One should simply know the strengths and weaknesses. The important thing for the organization is that the structure follows the strategy. The structure differs according to the strategy. Furthermore, within the same organization, each job needs a different structure, which changes for each requirement. This applies not only to organization structure but also to all other things.

For Drucker there is no absolute answer for anything. Moreover the best solution at the time will become obsolete within a few months, not to mention a few years.

We have to set up everything for review on a regular basis. It is a natural conclusion that we adapt the sunset system which after a period of time provides for reassessment of the effectiveness of legislation or agencies. As early as in 1942, Drucker strongly affirmed this in his book "The Future of Industrial Man" (1942). He said that centralization of power or any control of business should not be taken even for waging a war. He wrote, "the day when peace comes is not the day to start a new journey, but only to change horses. If you create something for a war, it will last into peacetime." I see Drucker's great insight here. In Japan, at this late date, we have just now started to revise measures that were set in wartime more than sixty years ago.

Toyokeizai: What does Drucker think about the corporate governance issue, which generates attention these days?

Yoshiharu Fukuhara, Chairman of Shiseido, the largest cosmetic company in Japan, said that he found new discoveries whenever he reads Drucker. Even though I have read through almost all of his writings, I always make some new discovery. Sometimes I find some connection between totally separate things. And sometimes I learn totally new things.

The recent astonishing finding is that the only function that cannot be outsourced in addition to top management is marketing. Drucker grasps the fundamentals, although he does not buy subjective idealism that believes in the absolute. Most recently I have also learned a surprising finding from Drucker about corporate governance.

Corporate governance is a question of "to whom the corporation belongs" or "for whom the corporation exists." There is a school that claims that it is a question of principles and philosophy concerning the concept of the corporation. They say the corporation is for shareholders. On the contrary, there is another school that claims that it is a question of society and culture. They say the corporation is for stakeholders.

However, according to Drucker's observation, stakeholder theory gains an advantage when the corporate management wants to dominate management, and shareholder theory becomes popular when the corporate management cannot either perform or achieve.

Moreover, Drucker says the cutting-edge corporations today does not ask him to whom the corporation belongs. Their most recent interest is how to recruit competent people and make them stay on. What is the most competitive market nowadays? It is human resources market. What is the way to make competent people stay on and keep them active? Drucker's answer is clear. It is neither salary nor bonus. It is not stock option either. It is definitely not money. It is to have them as partners.

Drucker's answer to the question to whom the corporation belongs is simple. It belongs to society. Therefore, as for an organization existing in society and for society, it is management's responsibility to improve its ability to produce wealth for the society. The criteria to evaluate the job of management are marketing, innovation, productivity, people, physical resources, capitals and social responsibilities. Drucker says management must have objectives for these. The roots of one of the latest management techniques, the balanced management scorecard lies here. Drucker taught it about fifty years ago.

How does Drucker view a leadership for the knowledge society? Here again, he says there is no absolute leadership characteristic, or set of characteristics. No leadership type exists. There are a variety of types of excellent leaders such as social, shy, active, pondering and so on.

Drucker has been consulted by so many kinds of organizations and met so many leaders. He says he has not seen any common characteristics for leadership---except one. All of them had integrity. Moreover, there is no single charisma among the excellent leaders whom he had met. Hitler, Mussolini, Lenin and Stalin were not leaders. They were destroyers but not leaders.

Toyokeizai: Could I just ask you once more, who is Drucker?

Drucker's knowledge covers eight areas including society, politics and polity, public policy and government administration, economy, management, history, philosophy and religion, and art, especially oriental art. Or we should rather call them eight aspects or eight windows of Drucker. Specifically, Drucker is a consultant, a professor and, a writer and speaker on a wide range of topics.

In short, he is a social ecologist. He plays the roll of the Lookout in Goethe's "Faust." He does not define himself as this or that, following conventional academic disciplines. He does not like to set any particular field in the center, because all fields are interrelated with one another.

Drucker's concern and methodology are always consistent. Of course, the emphasis shifted. As for the population issue, he feels a sense of crisis in the declining birthrate rather than in aging. As for methodology, he puts emphasis on the importance of perception, which grasps the whole as a whole, rather than a conception or logic.

Toyokeizai: You and Drucker---what is the nature of your relationship?

Soon after I started my career at the secretariat of Keidanren, the Japan Federation of Economic Organizations, some of my seniors persuaded me to join a team to co-translate a book, "Corporation in Crisis" (R. A. Smith, 1963) as for self-training. Then a publisher came to me to solo-translate a book, "Young Executives" (Walter Gazzardi Jr., 1964). Drucker had written a preface to that book. Of course I read his books since I was in high school, but this was the first encounter as a translator.

Several years later, a team of five translators, two professors and three Keidanren staff headed by Prof. Kazuo Noda co-translated Drucker's "Management: Tasks, Responsibilities, Practices" (1974). It was a lengthy book and turned out to be two volumes with a total of 1,300 pages in Japanese. After that, I wrote Drucker that I would like to edit a digest version of the "Management" and translate it. It became "Management: concise version" (1975), which has been widely read till now with more than thirty reprintings. As you know, last year I edited and translated a three-volume series of "The Essential Drucker", which reminded me that I did the same kind of work twenty six years ago.

I persistently asked Drucker about the parts that I did not understand. Following that, I translated "The Unseen Revolution" (1976), which foretold the coming of aging society. At that time also, I asked him about many things, most of which came from my lack of comprehension, although some of which came from his lack of detailed expression. Consequently, somewhere along the line, I started in effect to check the manuscripts of his new books, and I sometimes researched things in Japan and Asia for him while translating.

The first thing I was told by my boss just a few weeks after I joined Keidanren was to ask anything I did not fully understand. That alone brought me a relationship with Drucker.

However, there were great predecessors before me: Prof. Kazuo Noda who introduced Drucker to Japan by translating "The Practice of Management," Mr. Tadashi Iwane who translated "The End of Economic Man" for the first time, Prof. Yujiro Hayashi who coined the best Japanese word for "discontinuity," and Prof. Kaoru Kobayashi who published "Drucker Management Sayings" as early as 1967. The friendship between Drucker and Mr. Kazuma Tateishi, founder of Omron Corporation as well as Mr. Akio Morita, co-founder of Sony were family-like, which, to me, looks like a folklore in the ruins of the war. I cannot imagine how these people, who will go down in history, met and became acquainted when young.

As for the recent situation in the Asian part of the former USSR, some areas are part of Russia, some are self-governing domains, and some are completely independent. Even though they now exist in reality, it is difficult to explain. So, it was almost impossible to translate what Drucker had written concerning the future maps of the region in "The New Realities" (1989), which had not yet become a reality. As a translator, who could not see the future that had already happened, I had to ask him over and over again what he meant.

Drucker's biggest mistake depends upon us

When I was first asked this series of interview, I intended to have them translated into English by a professional Japanese-English translator and dedicate it to Drucker. I am good at English-Japanese translation, but not at vice versa. Then, I had an idea: I would send the whole structure of the eight-week interviews and the draft translation of the first two interviews asking for his comments. At least to my knowledge, there is no such biography in which the subject himself makes a comment on his biography.

He commented that I gave him too much credit, and asked me to add two points in the following parts of the interview.

He wrote me that he has made some mistakes during his sixty years of work, and that he sometimes was not paid much attention in his books such as "Managing for the Results" (1964), because, as Drucker puts it, he could not be perfect. So, I tried to find his mistakes. What was the most serious mistake? And I have found it. We might see it in the future. It is Japan's future. People in the world might say that the great Drucker made one big mistake in expecting too much out of Japan. We have to make sure that this won't happen. That is our responsibility.

There was no such a book among Drucker's that did not appeal to the public. I dare to name a person because this is not a made-up story. The book, "Managing for Result" which Drucker cited as an example, is the best-recommended book by Hirotaka Nakamura, an executive of Tanabe Management Consulting, a leading consulting firm in Japan.

The other point that Drucker wanted me to mention here was that he owed a lot to his predecessors such as Henri Fayol of France, Walter Rathenau of Germany and Mary Parker Follett of Great Britain and the US, and the three Meiji giants, Yukichi Fukuzawa, Yotarou Iwasaki and Eiichi Shibusawa.

I am going to close this series translating the last part of his letter, though it is too flattering for me. In addition, for readers who want to read his own words, I would like to introduce his letter herewith with his consent. Thank you very much for reading through this entire series.

"I am impressed both by the breath of your knowledge of my work---you know it far better than I do myself!|and by your insight into it and understanding of it. You manage to bring out what to me is the essence of my contribution and the motivation behind all my concern with management, that it deal with the individual, with community and society and with status, function and order altogether, rather than only with the tasks of business and of other organizations. This what I believe, distinguishes my work. You mention Tom Peters and Michael Porter. I agree with you that these are the important names to mention. But both see business enterprise purely as an institution to produce goods and services--- of course, it is. But I, perhaps because my starting point was not business and not management but the collapse of Western society and Western civilization in the First World War, the twenties and the thirties, have seen management and the business enterprises as much as social, and indeed, as spiritual phenomena as I have seen them economic phenomena. Yes, the purpose of a business is to create a customer, to produce wealth, to generate jobs. But it can do this only if it creates a community, if it gives the individual meaning, status and function, if, in other words, it is as much a social, as an economic organ. And this no one has seen and understood as well as you do and this interview does, and for this I am tremendously grateful and full of admiration.
I look forward with great anticipation to the next articles. I am learning a lot from them.

With warmest regards,
Peter F. Drucker

Two books to recommend:
"The Future of Industrial Man --- A Conservative Approach" (1942), Diamond
"The Essential Drucker Series: on Individual, on Management and on Society" (2000), Diamond