The Phone Call that Sparked a Discipline

Jeffrey Krames

As the author of Inside Drucker’s Brain, the most common question I get asked is: "Who is Peter Drucker, and how did he get started?" I welcome that query, because even those who know Drucker may not know what set him on the path to become the inventor of modern management.

First, a bit of history.

It was three days before Christmas in 2003 when I found myself sitting across the table from Peter Drucker, interviewing him for an upcoming book on him. That alone was an accomplishment because Drucker had almost always turned away authors, having once said, "One of the secrets of keeping young is not to give interviews but to stick to one’s work—and that’s what I’m doing. Sorry, I am not available." I was fortunate that he made himself available to me, a relatively unknown business book author.

During my day with Drucker, he was eager to tell me how he got started as a management guru (although given his humility, he would never call himself that). And he told me the story of the telephone call he received that would forever alter the destiny of the field of management.

The call came nearly 60 years earlier—almost six decades precisely to the day that we sat together that Monday morning. Drucker told me he was living up in Vermont at the time, but he and his family had rented an apartment near Columbia University. He was intensely interested in learning how large corporations were run, so he went to the library in search of finding something on the topic. "But there was nothing," he told me, sounding disappointed.

Then, that winter, a call came from a man named Paul Garrett. Mr. Garrett explained that he was the vice president of General Motors in charge of public relations, and he had been asked to invite Drucker in to analyze GM’s top management in action.

One of the most remarkable things about the episode was that Drucker never found out who instigated the call. "I never have been able to find out who wanted this—everybody denies it," Drucker told me, obviously amused.

It certainly wasn’t the CEO’s idea. Back then, the CEO of General Motors was the legendary Alfred Sloan, the man Drucker would later credit with being the first "professional manager" (along with Pierre S. du Pont). Sloan made it clear that he was against the idea of bringing Drucker in to GM.

Drucker visited GM and toured the facilities before sitting down with the vice chairman of the company, Donaldson Brown. Drucker told Brown that he could not do this—he could not study GM management because everyone would see him as a "top management spy." However, Drucker explained that there was one way he could do it: "In this united country," asserted Drucker, "you can do anything if you say you are writing a book."

Brown said, "No, we will not have it."

That was it. A stalemate. There would be no study, and General Motors and Drucker parted ways. Drucker wanted desperately to study the inner workings of a large corporation like GM, but he said he could not do it if he was going to be seen as a "company spy." By letting GM managers and employees know he was writing a book, he reasoned, everyone would be more relaxed, open and cooperative.

Six weeks after Drucker returned home—after the situation had fallen apart—he received another call from General Motors. They invited him back to Detroit and told Drucker that they had changed their minds. They would allow Drucker to write a book based on his study of the company. Drucker said that he would "not allow them to censor it except for actual facts." He spent the next 18 months studying every corner of the large car company, traveling to every GM division east of the Rockies.

Meanwhile, Sloan again made it clear that he was against the idea of bringing Drucker in, but as long as he was there, he was to be completely honest in his assessment of GM’s managers, and him [Sloan] in particular. This emperor was adamant: He wanted to be told when he was wearing no clothes.

In time Drucker came to regard Sloan as a leader with unbridled character—as well as one of the most effective CEOs of his day—or any day. Sloan taught Drucker many things that stayed with him. For example, Sloan taught Drucker that when all members of a management team quickly come to agreement on one course of action, that course of action is usually wrong! Meaning: Management teams must take their time on important decisions, particularly people decisions.

As Drucker told me his personal story, he repeated several riffs again and again. He told me that he "didn’t know anything about business from the inside," since he never managed anything. Drucker went so far as to pronounce himself "the world’s worst manager."

Earlier in his career, Drucker had written two successful books (including The End of Economic Man, 1939), which is how the top management at General Motors learned of Drucker in the first place. Had General Motors not called Drucker that day in 1942, Drucker may never have become…well, Drucker! His first business book, Concept of the Corporation (1946), came out as a direct result of his study of GM. Drucker established the field of management as a social discipline, a major accomplishment in post-World War II America.

When I asked Drucker how he was able to accomplish so much if it all came down to "luck" or "accident," all of a sudden he got deadly serious and shot back with the following:

"Don’t call it accident. Opportunity favors the prepared mind. If opportunity knocks at the door you have to open it. You have to be receptive to it, and I was."

Come back next month for another behind-the-scenes story of Peter Drucker and the invention of management.