The Wisdom of Peter Drucker from A to Z

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Respect: For more than 60 years, Drucker preached that workers are assets not liabilities, and should be treated with respect. (Pick up your Daily Dilbert or watch an episode of The Office, then judge how persuasive he was.) Drucker reimagined the organization as a human community and the job of management as preparing people to perform and then getting out of their way. That attitude wasn't just nice. Given that knowledge skills are more portable than manual ones, it was also smart. "The management of knowledge workers should be based on the assumption that the corporation needs them more than they need the corporation."

Schumpeter: Drucker really understood entrepreneurs, an appreciation spawned in part by the work of Austrian economist Joseph Schumpeter. Schumpeter introduced the idea of creative destruction: the necessary collateral damage that occurs when entrepreneurs--whom he called "wild spirits"--breach established markets. Entrepreneurs drive progress and create wealth, Schumpeter believed, a mantra Drucker took up in his own copious writings on innovation. "The entrepreneur always searches for change, responds to it, and exploits it as an opportunity," Drucker wrote.

Time management:"Time is the scarcest resource, and unless it is managed nothing else can be managed."In a sense, much of Drucker's writing about effective organizations boils down to time management. If time is the insurmountable constraint, deciding how to use it becomes is the most strategic of decisions. On a more personal level, Drucker suggested managers measure how they spend their time and compare that with how they should be spending it, then make the requisite modifications. His overarching question: "What needs to be done right now for the business?"

Universals: Drucker faulted business literature for raising performance expectations unrealistically high, demanding that managers be mathematical and creative, adept at decision-making and analysis, and in possession of excellent people skills and a firm grasp of organizational dynamics. "What seems to be wanted is universal genius, and universal genius has always been in short supply," he observed. "The experience of the human race indicates strongly that the only person in abundant supply is the universal incompetent."

Vienna: Drucker grew up in a small suburb of the city named Dobling, where his parents--a government official and a doctor--hosted soirees for scientists and intellectuals. Living near the starry seat of the Hapsburg monarchy, the family was able to attract prominent economists and political philosophers like Joseph Schumpeter, Friedrich August von Hayek, and Ludwig Heinrich Edler von Mises, whose conversation instilled in Drucker a lifelong curiosity and interest in ideas.

Welch: The chemical combustion that birthed "Neutron Jack" Welch was set off in a meeting with Drucker in 1981. Drucker posed two questions to Welch, who had just been named General Electric's CEO: "If you weren't already in this business, would you enter it today? And if not, what are you going to do about it?" Those questions inspired Welch's dramatic restructuring of General Electric, including the elimination of many low-growth businesses and 240,000 positions. From there, Welch rebuilt GE into a hugely successful, market-leading corporation with an employee-development program ambitious enough even for Drucker.

X-ray: How do you know when it's time for the next Next New Thing? In Managing for Results (1964) Drucker introduced the concept of a "business x-ray"--a tool for determining innovation strategies. Companies use the x-ray to evaluate the life cycles of their existing offerings. They then identify the gap between those offerings' expected future performance and their own larger goals. Finally, they fill that gap with--what else?--innovation. "The entrepreneurial achievement must be large enough to fill that gap and timely enough to fill it before the old becomes obsolescent," Drucker wrote.

Yardsticks: With his emphasis on results, Drucker was bullish on metrics. But he worried that managers often measure the wrong things (for example, things unrelated to the leader's desired outcome) or that they measure too much, or that they express their measurements in the wrong way. When evaluating management effectiveness, he touted one metric (or "yardstick" as he often it) above others. That yardstick: productivity, which Drucker defined as "the degree to which resources are utilized and their yield."

Zen: In 1998, when the writer Harriet Rubin interviewed Drucker at his home for Inc., he showed her this passage from a book on Japanese art: "The Zen-inspired painter seeks the 'truth' of a landscape, like that of religion, in sudden enlightenment. This allows no time for careful detailed draftsmanship. After long contemplation, he is expected to be able to seize inner truth in a swordlike stroke of the brush...." Similarly, Drucker achieved enlightenment through quiet observation, waiting patiently until he saw an idea whole, then rendering universal truth in the swift space of a sentence. Thus was the essence of the master.

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Leigh Buchanan is an editor at large for Inc. Magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture. @LeighEBuchanan