Consulting Drucker Read online

  This was my introduction to the Thayer Method, a variation of which was used every day, in every class, for the next four years. Periodically tests were given to review major subject areas. The basic element in the Thayer Method was that the professor does not lecture; he facilitates learning. The students teach themselves in every subject. Returning to Drucker’s comment: “No one learns as much about a subject as one who is forced to teach it.” Thayer’s method was used in every course, and it was tough, but amazingly effective.

  After my graduation, I was commissioned in the Air Force, and my first assignment was as a navigator-bombardier in the B-52 nuclear bomber. During the Cold War we spent much time on ground alert, ready in case the Soviet Union launched a surprise attack against the United States as the Japanese had done at Pearl Harbor 20 years earlier. We were encouraged to take graduate courses when off duty. I signed up for courses at Oklahoma State University (OSU), which translated my transcripts from West Point into semester hours. At a time when OSU required 130 semester hours to obtain one of its own undergraduate degrees, I was given credit for an astounding 244.4 semester hours earned from my four years at West Point. No wonder a top-tier school like the University of Chicago admitted me as a full-time student some time later, despite my less-than-outstanding grade point average as a cadet! If completing almost twice the normal load of semester hours over a standard four years of college doesn’t get your attention, I don’t know what will.

  I do not know how Thayer developed his method. What we do know is that he had graduated as valedictorian from Dartmouth College before attending West Point. After his West Point graduation, he fought in the War of 1812 and directed the construction fortifications at Norfolk, Virginia. After the war, he spent several years on special assignment in Europe traveling and studying at École Polytechnique in France. Clearly he was highly regarded, both technically and for his ability to innovate, when he was selected and assigned to become superintendent and reform West Point by President Monroe in 1818. After his retirement from the army, he returned to Dartmouth and is honoured at that university as well for having founded their School of Engineering, much as he had instituted engineering at West Point.

  More than Maximizing Time

  If we just looked at the time saved by the Thayer Method, that would be pretty good, but there’s more. West Point is basically a school for leaders, right? So a lot is crammed into four years, plus academics, but it is what you learn that is important. Well, the Princeton Review must have thought that much was learned. West Point is always ranked highly by the Princeton Review, but a few years ago, the Princeton Review named West Point the number-one public liberal arts college in America. At about the same time, Forbes ranked West Point number one nationally among the best US colleges3 and US News and World Report ranked West Pont as the number three engineering school in the country.4 Come on boys, which is it best in – arts or sciences?

  Why Makes the Thayer Method Work?

  Because of the “flipped classroom” publicity, a lot of this is being researched today. Here are some thoughts from one practitioner of the flipped classroom: “If some students don’t understand what is presented in a real-time classroom lecture, it’s too bad for them. The teacher must barrel on to pace the lesson for the class as a whole, which often means going too slow for some and too fast for others.

  Moving the delivery of basic content instruction online gives students the opportunity to hit rewind and view again a section they don’t understand or fast-forward through material they have already mastered. Students decide what to watch and when, which, theoretically at least, gives them greater ownership over their learning.

  Classroom time is no longer spent taking in raw content, a largely passive process. Instead, while at school students do practice problems, discuss issues, or work on specific projects. The classroom becomes an interactive environment that engages students more directly in their education.

  In the flipped classroom, the teacher is available to guide students as they apply what they have learned online.”5

  Drucker attempted to get his students as well as his consulting clients to do their own thinking in applying his principles to their issues to solve problems, make decisions, and to build their businesses successfully. IATEP™ is a method of teaching, learning, and guiding clients and students alike in doing this. With a little thought, any of Drucker’s ideas can be adapted to your group consulting, too.

  1 Tucker, Bill, “The Flipped Classroom,” Education Next, Winter 2012 / Vol. 12, No. 1, accessed at http://educationnext.org/the-flipped-classroom/, 31 March 2015.

  2 Geher, Glenn, “Great Leaders are Made,” Psychology Today, April 3 2014, accessed at https://www.psychologytoday.com/blog/darwins-subterranean-world/201404/great-leaders-are-made March 25, 2015.

  3 Alberts, Hana R., “America’s Best College,” Forbes August 6 2009, Accessed at http://www.forbes.com/forbes/2009/0824/colleges-09-education-west-point-america-best-college.html, 31 March 2015.

  4 No author listed, “Best Undergraduate Engineering Programs Rankings,” US News and World Report, 2015, accessed at http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/engineering-no-doctorate, 31 March 2015.

  5 Horn, Michael B., “The Transformational Potential of Flipped Classrooms,” Educational Next, SUMMER 2013 / VOL. 13, NO. 3, accessed at http://educationnext.org/the-transformational-potential-of-flipped-classrooms/, 31 March 2015.

  Chapter 16

  People Have No Limits! A Critical Concept for Every Consultant’s Mastery

  If you consult on staffing or human resources issues, you need to know this, lest you fall into the trap that one professor fell into. There was a very popular set of books some years ago written by a man by the name of Laurence J. Peter. Peter was an associate professor of education at the University of Southern California (USC). In 1968, he published what he called the Peter Principle. Some say this was the most famous academic principle to come out of USC. It probably was the one that gained the greatest attention. But please remember that Laurence J. Peter was not Peter Drucker.

  In a nutshell, the Peter Principle proclaimed: “In a hierarchy, every employee tends to rise to his level of incompetence.” At which point he or she was able to rise no further. Since this principle made no exclusions, it follows that in accordance with the Peter Principle, eventually every position in an organization tends to be occupied by an employee who is incompetent to carry out his duties. Moreover, until that time, such work that is accomplished must be accomplished by those employees who have not yet reached their incompetence levels.1 So without outside intervention, in time the organization would be filled by incompetent people, even though they may have demonstrated high competency and done remarkable things in their previous assignments. One solution was that we smile and benignly tolerate incompetence so long as we had someone available to do the real work of the organization, since the incompetents might do minimum damage and even create barely meaningful jobs.2 However, many assume that Professor Peter (again, not Drucker) was speaking tongue in cheek with this recommendation.

  While the Peter Principle cautioned that an employee promoted to a new job should be qualified for it, the main point was that since these risings were inevitable and the organization could not demote these incompetents who had arrived at their final and incompetent level, it had to eventually get them out of the way where they could do no harm, perhaps making room for new incompetents.

  Drucker eschewed this concept totally, and it is critical for the consultant to recognize that Drucker believed that people have no limits. Past failure does not mean future failure, though a consultant may find individuals who are misassigned and not performing optionally, this does not mean that they have reached any limit of competency in their careers. Therefore, in reviewing the issues in any organization, the consultant must understand that people have no limits. This was Drucker’s argument against this once-popular preposition.

  Peter (Drucker, tha
t is) said, “No!”

  Most supporters of the Peter Principle did not see themselves as having arrived that their level of incompetency. This did not affect their view of the book because they might claim that while they still had a way to go, others – especially superiors or competitors in the hierarchy – had already attained this ultimate yet negative level and might be viewed in this category. Since the majority felt themselves not yet incompetent, the book probably gave a feeling of comfort for those still striving against competitors viewed as untalented, but perhaps lucky or with connections. The book rose in popularity and became a national best seller. Drucker said that it was all nonsense, and he hated it when asked if he was the author of the Peter Principle, with the title referring to his first name.

  Other than Drucker’s strong feeling of the power and importance of people in an organization, he objected to the Peter Principle on several other grounds. He believed that the whole idea was overly simplistic. He didn’t contest the fact that many failed as they moved into successively higher levels of an organization. He thought that this was a tremendous waste, much of which could be avoided by the individual himself through proper training on his own or with the help of the organization. He agreed with Laurence J. Peter that more thoughtful placement and promotion could reduce this unwelcome phenomenon. However, he also felt that as those who worked more with their minds, what Drucker called “knowledge workers”, became more important in the workforce, increasing numbers of managers were likely to be placed into positions in which they failed to perform adequately in specific situations due to developing technology. In other words, so long as the work was purely physical, it was fairly easy to measure performance, and physical skills were easier to move to other jobs demanding primarily physical inputs. To put it crudely, a ditch digger dug ditches and could do so adequately in a variety of situations. But the transfer of knowledge-working skills to new assignments was at times much more challenging.

  Drucker maintained that, “We have no right to ask people to take on jobs that will defeat them, no right to break good people. We don’t have enough good young people to practise human sacrifice.” However, this was not a case of an individual rising to a level where he could no longer perform competently. After all, the selection of the right person for the right job was the manager’s responsibility. Perhaps even more importantly, the very notion that people rise to their levels of incompetence was dangerous to the whole organization.

  The Dangers of the Peter Principle to the Organization

  The Peter Principle was dangerous to the organization because of what appeared to be the obvious solution: get rid of the incompetents before the entire organization becomes overloaded with incompetents who make more and more incompetent decisions. Dismissal clearly has a negative impact on the individual. But Drucker saw that dismissal could affect the organization:

  • Unless the acts of incompetence are well known, understood, and agreed to by others in the organization, dismissal or reassignment to a less-important post could affect organizational morale and its view of management fairness

  • Presumably the so-called “incompetent” had a history, perhaps a long one, of previously successful performance. So dismissal or reassignment would cause loss to the organization of demonstrated ability and experience

  The Man Who Lost $1,000,000 as Soon as He Got Promoted at IBM

  There is a story that Thomas Watson, the founder of IBM, once asked to see a newly promoted vice president who not only failed on his first assignment, but his failure cost the company a million dollars, which probably was more like 10 or 20 million in today’s dollars. The young man reported to the IBM chief ready for the worst. “I guess you called me in to fire me,” he said on entering Watson’s office. “Fire you!” exclaimed Watson, “We just invested $1,000,000 as part of your education.” Drucker would have applauded.

  The Hidden Pressure from the Peter Principle

  If accepted as fact, the Peter Principle also puts a hidden and significant additional pressure on its employees not to make a mistake lest they be seen as incompetent. However, mistakes are an inevitable part of action and are always possible and must be weighed considering a reasonable balance with risk. Trying to avoid all mistakes is hardly conducive to willingness to take risks or even assumption of full responsibility, both of which are essential for success. Demanding “zero mistakes” is attainable, and in certain very precise cases must be sought and achieved. For example, around a nuclear facility you absolutely must insist on zero tolerance for potential errors affecting the lethal properties of the product that you are dealing with.

  However, mistake avoidance for all situations is not a worthy goal. Accomplishment and progress, for example, are the goals a manager or a consultant should be seeking. A focus on avoiding mistakes as a primary goal will lead to an emphasis on risk avoidance and little progress. An organization in which members are trying to make as few mistakes as possible in order to avoid the appearance of incompetency will achieve little in innovation, one of the two prime qualities that Drucker found essential to any organization’s success. Without it, an organization will eventually be overwhelmed by its competitors. Rather than mistake avoidance, employees should be encouraged to dare the impossible. This is the only way that they and the organization can achieve the extraordinary, and this is the true route to success.3

  One More Nail in the Coffin

  Implicit in the Peter Principle is the assumption that if a manager is incompetent for one particular job, he or she cannot succeed in any job at the same, or higher, level. It assumes that if a manager demonstrates incompetence and fails in one job, he or she cannot rebound to become a success in another. Both assumptions are in error and therefore not only unfair, but incredibly wasteful in human potential, for history is rife with “incompetents” who later proved to be great successes at different or even higher levels of responsibility in the same or similar organizations.

  Disproving the Peter Principle

  Now it’s true that Professor Peter was talking about hierarchical organizations. My first three examples aren’t quite in that category, but they are still worth considering for openers. Rowland Hussey Macy studied business, graduated, and then opened a retail store. It failed. He started another. It failed too. This happened four times, and he failed at each attempt. True, Macy was an entrepreneur and not a member of a hierarchical organization as specified by Laurence J. Peter. However, were his stores divisions of a Fortune 500 company accepting the Peter Principle, Macy would have been discharged after his first attempt, as he would have clearly demonstrated his incompetence at retailing, business, and entrepreneurship. He never would have had the chance to succeed and we may not even have known about him. However, Macy’s fifth attempt did succeed, and even though on the first day it brought in only $11.08 in sales, Macy died a very wealthy man. More than 150 years later, Macy’s still exists and although suffering like other retailers during the recession, it still has almost 800 stores and recently announced it was going to hire 85,000 seasonal workers for the coming holidays. Not a bad legacy for someone who had clearly risen to his level of incompetence four times before his overwhelming success.

  Winston Churchill is certainly an interesting case. Some still argue the point, and Churchill himself maintained that his failure would have been worth the cost in resources and human flesh if the allies had maintained the fight just a little bit longer. He wrote that final success would have shortened the war and saved a million casualties. He was speaking about World War I and referring specifically to a fight he was responsible for initiating and maintaining, the battle called “Gallipoli” on the Turkish front. However, even if Churchill’s calculations were correct, politically he should have known that the whole campaign simply wasn’t sustainable. So one could say that his disaster would have been called proof of Peter’s theory had he not been so successful later. And after all, politics was supposed to be Churchill’s forte. Nevertheless, Churchill “reac
hed his level of incompetence” as defined by Laurence J. Peter as first lord of the admiralty during World War I.

  Here’s what happened. As first lord, Churchill succeeded in convincing the British war cabinet to undertake the biggest allied disaster of the war, the Dardanelles Campaign, including an allied landing at Gallipoli. This resulted in the worst allied defeat of the entire conflict, with over 200,000 casualties. Churchill was forced to resign as First Lord of the Admiralty and forced into a much lower position in the army. As a graduate of Sandhurst, the British “West Point” with previous military experience, he volunteered and joined the British Army. Once having commanded admirals, general, and field marshals, he served on the front lines in France as a lieutenant colonel. He shared all dangers. His hut mate in the trenches was blown apart during an artillery barrage. Churchill himself survived the war and became a successful combat officer. But he failed miserably in his top job as Sea Lord.