Friday, May 9, 2008

Drucker: Innovation and Entrepreneurship

I was sitting at the library recently, looking up something online, and happened to have a copy of Peter Drucker’s 1985 Innovation and Entrepreneurship on the table next to me. An older man—well, not only older, but circa 1920—walked by my desk and started muttering to himself, “Oh boy, Peter Drucker.”

He then turned to confront me and said, “Peter Drucker, huh? I was with GE in the 1950s and 60s and I had to go to way too many classes about good old Peter Drucker. What a pain in the ass that guy was.”

I had to laugh.

I also realized in that instant that, for a generation or more, Peter Drucker was the Tom Peters, Malcolm Gladwell, Stephen Covey (and six other author/consultants) of the management world, all rolled into one. And, for another generation he continued to turn out quality writing and thinking, pushing ahead the art and craft of management.

Despite the reaction of my octogenarian acquaintance, there are still some very good reasons to read Peter Drucker’s Innovation and Entrepreneurship, even if the book is almost 25 years old:

Drucker’s contrarian perspective. Innovation is about technical genius that changes the world, right? Wrong. Typically, Drucker tells us, innovation isn’t technical at all—it’s economic and social. Second, innovation is rarely about creating change, it’s about exploiting change that already exists. Drucker reminds us that Cyrus McCormick was one of many harvesting-machine inventors, but really changed the world when he created installment buying for farmers, giving them “purchasing power.” “Contrary to almost universal belief, new knowledge—and especially new scientific knowledge—is not the most reliable or most predictable source of successful innovations. . .In the theory and practice of innovation and entrepreneurship, the bright-idea innovation belongs in the appendix.”

Drucker’s historical perspective. Americans are superb at looking forward but, to put it bluntly, we stink at history. When we think about innovation we are only about as good as the last good thing we saw or read. So, right now Google and Apple are the historical cornerstones of our innovation world. But not so long ago it was WalMart, Before that, Microsoft. HP was in there (“the HP way”) and so was Intel (be paranoid). GE (you’d better be one or two in your market or get out). 3M (and that blinkin' Post-It Note). IBM. GM. Bell Labs. Ford. Edison. Did I get any of the genealogy wrong? Maybe Dell or the Wright Brothers. We shift our focus every 3-5 years when our current champion of innovation trips up or runs out of gas, or just proves that it’s human like the rest of us.

But when Peter Drucker looks back on innovation, he covers three centuries, the globe, and nearly every form of business endeavor. The birth of the university. The launch of the diesel engine. JP Morgan servicing the European “riff raff” emigrating to America that the House of Rothschild abandoned, or Citibank dropping retail branches into Germany. The failure of the Edsel (and associated success of the Thunderbird). The launch of penicillin. The importance of the textbook. The invention of the hospital. The invention of Management. The invention of Research. And, as an artifact of writing in 1985, when Drucker discusses Silicon Valley, he reminds us that there used to be lots of silicon there.

Drucker’s ego (and it’s a hoot). Few authors find their favorite and most reliable reference to be themselves. If you are an author, wouldn’t it be grand to have most of your footnotes begin with, “See my discussion of this topic in my book on. . . .”

Innovation and Entrepreneurship, despite its age, stands up well to anything being written today about innovation, and deserves a read-through every couple of years just to keep us all grounded.