Peter Drucker Got It Wrong

Peter Drucker got it wrong. 

In his book The Essential Drucker: The Best Sixty Years of Peter Drucker’s Essential Writings on Management, he reasons that each institution "exists for a specific purpose and mission; it has a specific social function. In the business enterprise, this means economic performance.” Sorry Pete, but I think that is a limited take.[1]

Now, I know that even the slightest insinuation that Master Drucker might be wrong in the management world is as blasphemous as saying Santa isn’t real, but hold on real quick.

While this may have been true nearly half a century ago, I don’t believe it still is. And where this is still seen as the purpose...well, what is, is not what ought.

Yes, a primary function of business is economic performance, but to say it is the purpose is selling business short of what it can be (and often what it is, when done well).

Now, to be fair, I don’t think Peter is wrong or bad or that we should ignore his massive wisdom. I mean, the guy is a sage. On this topic specifically, he does note that business is primarily a social function. He says, “To know what a business is, we have to start with a purpose. Its purpose must lie outside of the business itself.”[1] I think he’s dead on.

We live in a time when business is shouldering responsibility more than it ever has, which is pretty amazing if you ask me. We as consumers are wanting not just goods and services for ourselves, but wanting our dollars to provide goods/services that meet a need in the world too. We want the brands we follow to be transformational, not just transactional. 

The overlap between businesses and social functions is deepening every day. And having an ever growing purpose deeper than maximizing shareholder value and providing jobs is become a key to success. We employees and owners—change makers—want our work to have impact. I’d dare to say we need it to have impact for us to be our best selves at work. We need the organizations we pour our emotional/financial/chronological/spiritual resources into to be doing more than stackin' "dolla dolla billz, y’all”.

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[1] Peter F. Drucker, The Essential Drucker; specific quote excerpted from Management, Tasks, Responsibilities, Practices(1974)