PracticeConsultingManagement Gurus – They know you know.

Management Gurus - They know you know.

The men who gave us the concepts of the "knowledge economy" and "business process re-engineering", and laid the foundation stones for the "new economy" are still required reading for any serious student of management theory and are still vying with one another for top spot in the conceptual charts. Gary Flood reviews the credentials of the top five management gurus and finds that, despite the occasional U-turn, they have an enduring appeal.


If Frank Sinatra was the chairman of the board, Peter Drucker’s got to be the Pope of business thinking. Sixty years of output has helped cement his reputation as the most important management thinker of our time – the guru of all gurus.

Drucker’s main achievement is putting the whole messy practice of management on as sound a scientific basis as it can be. This is followed closely by his ability to spot future trends – the whole concept of “knowledge worker” and the “knowledge economy” come from his pen, and he famously predicted the collapse of the Soviet Union five years in advance. One of his many biographers called his book The Man Who Invented the Corporate Society in tribute.

Thus any serious student of management theory cannot afford not to have read Concept of the Corporation, Drucker’s 1946 look at what made General Motors tick, or The Effective Executive, his 1966 offering which gave guidelines on being a better manager.

Drucker tends to the agnostic when it comes to both the promise of technology and the Internet. “The time has come for us to shift from the ‘T’ in IT to the ‘I’,” he is fond of saying. And the sprightly old geezer is also not terribly keen on IT consulting: “When JP Morgan bought a Rolls-Royce, the company told him that he had to have a driver supplied by them. Morgan brought an antitrust suit against Rolls-Royce so that he could use his own driver,” he said in 1997. Ouch.

The world’s most famous business school professor (Michael Porter is a major figure at Harvard) is enjoying something of a revival after a 10-year gap away from strategy when he went off to concentrate on international competitive struggles. But given that his landmark book, Competitive Strategy, has been continuously in print for 22 years and that most MBAs have to study Porter as a basic course requirement he could probably afford the “sabbatical”.

Porter’s main focus is on strategy and its importance. His analysis of industry and competition was developed especially for managers in large, mature corporations, and resulted in a framework stressing the dynamic relationship between a particular enterprise strategy and industry structure and how to select a strategy based on a current position in the marketplace.

Strategy became cool. But Porter now feels that too much lip-service is paid to strategy while actual – and misdirected – effort is going into Internet-spawned corporate cul-de-sacs, like getting big fast or producing products at lowest cost possible.

Instead, he cautions, companies need to focus not on improving best practices or achieving operational effectiveness but defining goals and being different. “The essence of strategy is that you must set limits on what you’re trying to accomplish. The company without a strategy is willing to try anything. If all you’re trying to do is essentially the same thing as your rivals, then it’s unlikely that you’ll be very successful,” he wrote in 2001.

It’s hard to see how New Age thinking and management philosophy can co-exist, but best-selling writer Stephen Covey has created a one-man publishing and consulting business doing just that. Indeed, readers of US business magazine Chief Executive last year voted his The 7 Habits of Highly Effective People (1997) one of the two most influential business books of the last century.

Covey’s approach has been seen as coloured by his background as a Mormon and he makes no secret of the spiritual aspect of his thinking. Nonetheless, his work centres on real-world here-and-now issues: how to achieve “centredness” and realise potential, at both the personal, leadership and corporate level. “If you look at things through the paradigm of correct principles, what you see in life is dramatically different from what you see through any other centred paradigm,” is a typical Covey sentiment, as is “Management works in the system; Leadership works on the system”.

Covey says leaders need to commit to continual learning, service orientation, positivity (“you are cheerful, pleasant, happy, optimistic, positive, upbeat, enthusiastic, hopeful, and you believe in people” no less), lead a balanced life and see life as an adventure, be able to “synergise”, and er, do aerobic exercise.

Covey’s wisdom is now big business – his website claims the consulting firm he runs averages $0.5bn annual revenues, with 82 of the Fortune 100 companies having been his customers, with General Motors spin-off Saturn a prominent client.

Tom Peters is well-known for two things: for famously reversing the position that won him worldwide acclaim and notice, and for his populist, accessible style, which has allowed him to reach many readers through his chatty and often witty columns and essays.

In 1980 Peters co-authored In Search Of Excellence, which was barely noticed at publication but which has come to be seen as a foundation stone for the later New Economy.

Excellent companies, argued the book, can’t be measured or even understood by numbers-based “rationalist” approaches to management problems, but on the people and individuals who make up the company. It’s the companies who understand that that do well, and indeed can spot and circumvent long-term challenges to their current success. (Given that one of his excellent companies was Atari and not General Motors not everyone might agree.

Central to this thesis was a rejection of scientific managerial approaches. “Xerox hired MBAs with IQs of 180 or higher, and they spent all of their time and energy arguing about ‘cross-elasticities of demand’. Meanwhile, they were content to make crappy copiers. They didn’t care about the product or the people or the customers. It was all about the numbers. The numbers, the numbers, the numbers. I was fed up with the numbers,” Peters wrote last year.

His next book eye-catchingly opened: “There are no excellent companies”. No-one cared: Peters was and is feted mainly as a management gadfly, and that’s why his columns get read.

The father of the re-engineering revolution has been trying to stake something of a comeback recently. With Re-Engineering The Corporation (1993), a follow on to the Harvard Business Review seminal article Don’t Automate – Obliterate!, MIT computer science professor Hammer and James Champy said what was wrong with too many modern businesses was stove-piping and logical separations of business functions that could be much better run in an integrated fashion.

The resultant purge across global businesses became the philosophical basis of both Business Process Re-engineering and Enterprise Resource Planning (ERP) – but also came to be seen as liquidation of middle management for the sake of it with few incontrovertible success stories to justify the pain.

Hammer has repeatedly said that the responsibility for all that downsizing can’t be laid solely at his door. Now with his latest book, The Agenda (2001), Hammer is shifting toward a more customer-focused strategy. Indeed, one of the striking features of the book is the way he keeps saying he was wrong in his earlier thinking (a la Peters).

But there is still a concentration on process and abolition of functional barriers, albeit with a trendy liking for collaboration. However, some critics charge that the earlier, more radical and dogmatic Hammer is preferable, questioning whether there’s much new here beyond sensible thoughts about good management practice.

Hammer had been slipping down the conceptual charts but the line he takes in his latest work seems set to put him back on top.

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