Peter Drucker on the Computer in 1967

Very interesting, the article McKinsey just has re-published:

The Manager and the Moron

from Peter Drucker, written in 1967 (!).

In the 50 years or so up to 1967 the economy has’t really changed, writes Peter Drucker. Same industrialized countries, same matured industries, same technologies. But big changes are ahead.

“The impact of information, however, should be greater than that of electricity, for a very simple reason. Before electricity, we had power; we had energy. It was very expensive and rather scarce, but we had it. Before now, however, we have not had information. Information has been unbelievably expensive, almost totally unreliable, and always so late that it was of little, if any, value. … Now, for the first time, it’s beginning to be available—and the overall impact on society is bound to be very great.”

And he continues:

“Within the next ten years, information will become very much cheaper. … The kindergarten stage is over. … Now we can begin to use the computer for the things it should be used for—information, control of manufacturing processes, control of inventory, shipments, and deliveries.”

Yes, Peter Drucker coined the term “knowledge society”. He recognized the nature and significance of information and knowledge and the impact of easily accessible information. He also saw that change will come from technology.

“Technically there is no reason why Sears, Roebuck could not offer tomorrow, for the price of a television set, a plug-in appliance that would put us in direct contact with all the information needed for schoolwork from kindergarten through college.”

Well, here we got it. A description of what we call the Internet today. In 1967.

Do managers think and understand?

Then Drucker goes on, telling that middle to top management hasn’t learned to think. They are promoted because they adapt but nothing in their work experience has prepared them to think. Two out of three top-executives fail. Instead of trying to understand most people allocate most of their time to quantify things. With the computer taking over the routine work of quantifying, the manager should get the necessary time “to think about the important things he cannot really know—people and environment”.

Well, at this stage Peter Drucker didn’t foresee the expansion of the finance economy, which was only possible because of computers. Nobody talked yet about the maximization of shareholder value and that this would be the best for society. And, in fact, computers started to do all the the quantifying stuff, while managers thought how to increase their own wealth. Instead of thinking to understand the people and the environment, managers created their own new environment by leveraging the then existing finance economy.

But this aside, was Peter Drucker right with regard to managers of the real economy? In the meantime, are they taking enough time to understand their systems and their environments?

Maybe yes. I think a critical mass of managers has finally become system thinkers, in one way or another. It just took a detour of two or three decades.