Management as a Liberal Art Research Institute

Peter Drucker's Perspective on Recent AI Developments: Augmenting Human Capabilities

Pooya Tabesh Ph.D.

PUBLISHED:

September 4, 2023

In a world increasingly shaped by technological advancements, Peter Drucker's insights continue to hold relevance. Drucker wrote many pieces about technology, computers and their impact on individuals, organizations, and society (e.g., Drucker, 1967; Drucker, 1970). Were he alive today, Drucker would undoubtedly offer insightful perspectives on the rapid evolution of artificial intelligence (AI) and its impact on various aspects of work, business, and society. In this blog post, my aim is to engage in a creative exercise to envision insights Peter Drucker might have offered if he were alive today. Building on his work, I try to answer the following question:  What viewpoints could Drucker potentially express if he were to provide commentary on the benefits of artificial intelligence (AI)?


AI as an Efficiency and Effectiveness Enhancer

Peter Drucker said, "Efficiency is doing things right. Effectiveness is doing the right thing” (Drucker, 1974). Drucker would concur that AI's surge in popularity is rooted in its transformative potential to boost efficiency across diverse industries. His fundamental belief in the need for businesses to continuously improve their processes and practices aligns with the notion that AI can enhance efficiency by automating time-consuming tasks. Similarly, AI can accomplish many decision tasks with far more accuracy and effectiveness than a human decision maker. Therefore, Drucker would see AI as a great addition to the any manager’s toolbox. AI contributes to successful management by its direct impact on efficiency and effectiveness.   


AI, Strategic Focus, and Creativity

AI's application in time-consuming tasks and less complex decisions resonates with Drucker's concept of task management. Drucker believed that managers should engage only in decision-making regarding non-routine task. For instance, he emphasizes that majority of decisions are routine and can be standardized or delegated to others. In this regard, by using AI for automating time-consuming functions, managers can focus on bigger problems and organizations can liberate their workforce to channel their efforts toward strategic thinking, innovation, and relationship-building. Drucker's writings often stress that strategic vision and creative problem-solving are uniquely human attributes, forming the bedrock of sustainable success.


AI and the Process of Decision-making

Drucker valued systematic analysis in the process of decision making and highlighted the significance of informed decision-making in many of his books. He was, however, pessimistic about computers as actors capable of effective decision making. Back in 1967, Drucker called computers “total morons” because they could not make decisions (Drucker, 1967). Today, the machine intelligence has changed the equation. Therefore, if he were alive today, Drucker would likely commend AI's ability to analyze massive data and unveil hidden patterns that human decision makers might overlook. Nevertheless, he would also caution against blindly trusting AI-generated insights or decisions. Indeed, while he promoted careful analysis, Drucker believed that analysis alone might not generate the best outcomes in every single situation. Therefore, Drucker might advocate for a symbiotic approach to human-AI interactions (e.g., Jarrahi, 2018) where AI-generated decisions are considered alongside human judgment, combining quantitative findings with qualitative understanding.

 

 Value of People and the Augmentation Paradigm

One of the cornerstones of Drucker's management philosophy is the idea that people are the most valuable assets in the organization. In this context, and consistent with the symbiotic paradigm, Drucker would emphasize that AI should be employed as a partner to augment human intelligence, not to replace it. He would likely stress that AI's real potential lies in its ability to collaborate with human professionals, enhancing their problem-solving capabilities. In this view, human judgment continues to be a significant asset in the organization.


Final Thoughts

In a world captivated by AI's potential, Peter Drucker's hypothetical insights would likely underline the importance of responsible AI integration. I speculate that in the age of machine intelligence, his characterization of computers would shift from “morons” to discerning collaborators whose insights merit careful consideration and thoughtful evaluation rather than unquestioning reliance. His visionary perspective would emphasize using AI to complement human strengths, optimizing efficiency, enhancing decision-making, and fostering innovation. In Drucker's view, AI's true value would not lie in overshadowing human intelligence, but in propelling it to greater heights. As businesses navigate new opportunities in the AI landscape, Drucker's wisdom reminds them that technology's impact is most profound when it aligns with and magnifies the capabilities of the human mind.


References

Jarrahi, M. H. (2018). Artificial intelligence and the future of work: Human-AI symbiosis in organizational decision making. Business horizons, 61(4), 577-586.

Drucker, P.F. (1974), Management: Tasks, Responsibilities, Practices, Harper and Row, New York, NY.

Drucker, P. (1970). Technology, management, and society. Routledge.

Drucker, P. F. (1967). The manager and the moron. McKinsey Quarterly, 3(4), 42.

 

A Tribute to Charles Handy (1932-2024)

By Karen Linkletter Ph.D. • January 6, 2025
On December 13, 2024, we lost a seminal management philosopher and theorist: Charles Handy. Like Peter Drucker, Handy was a social thinker and management theorist who emphasized the human side of work as more important than profits and valued individual growth and development in organizations. Handy was born in Ireland and studied at Oxford. In 1956, he went to work for Shell, working in Borneo, where he met his future wife, Elizabeth Hill. Disillusioned by corporate life, Handy left Shell in 1962 to study management at MIT in their executive program. Inspired by their humanistic approach, he returned to London in 1967 to start the London Business School. Handy knew Drucker and was a regular keynote speaker at the Global Drucker Forum in Vienna. The two men had much in common in terms of their approaches to management and social theory. Like Drucker, Handy became an author (although, unlike Drucker, Handy was a corporate executive before he turned to writing). Handy wrote not just on business but also society, serving as much as a social ecologist as Drucker was. In his pivotal book, The Age of Unreason (1989), Handy argued for the disruption of discontinuity – resulting in a new world of business, education, and work that was highly unpredictable. He rejected shareholder capitalism and saw the organization as a place for human purpose and fulfillment, based on trust. Like Drucker, Handy advocated federalism in organizations, disseminating authority and responsibility to the lowest possible levels. He also saw “the future that had already happened.” Handy coined the term “portfolio life,” where knowledge workers would increasingly work remotely and for multiple organizations. In the 1980s, he posited that society consisted of “shamrock organizations”: those that had three integrated leaves: full-time employees, outside contractors, and temporary workers. Handy thus foresaw the new “gig economy” and increasingly autonomy of knowledge work. Finally, like Drucker, Handy had a life partner who not only supported his career but was an independent woman with her own interests. Liz Handy, like Doris Drucker, was an entrepreneur who ran an interior design business, and later was a professional photographer and Charles’s business agent.  Minglo Shao, founder of CIAM, remembers Handy as a warm man who made several important contributions to what we see as the fundamentals of Management as a Liberal Art. We are thankful for Handy’s contributions to management theory and social thought, and for his legacy at the Global Drucker Forum in the form of the Charles and Elizabeth Handy Lecture Series.

Treasures from the Charles Handy Drucker Forum legacy

By Richard and Ilse Straub with the Drucker Forum Team • December 29, 2024
For 15 years, Charles Handy did us the enormous honor of choosing the Drucker Forum as a privileged platform for delivering his message to the world, and particularly to the younger generation in which he had such faith. Following up on our initial announcement of Charles’ passing Charles Handy (1932–2024) , we are honored to share a selection of his key contributions to the Forum with our wider community. Charles’ brilliant keynotes at the Drucker Forum have become legendary. Normally accessible only to members of the Drucker Society, from today they are available as recordings to the wider public for a period of 30 days. At the first centennial Forum in 2009, Charles talked about his debt to Peter Drucker while outlining his own fundamental management concepts that he had developed over the years. Two years later, he touched on the ideas of Adam Smith and demonstrated how much more to them there was than the celebrated “invisible hand” of self-interest. In his landmark closing address in 2017, pursuing a thread developed in his 2015 book The Second Curve, he called for a management reformation that would turn it into a tool for the common good – thus drawing the first contours of what we would announce six years later as the Next Management . We took to heart his exhortation not to wait for great leaders but “to start small fires in the darkness, until they spread and the whole world is alight with a better vision of what we could do with our businesses”. Management’s "second curve" will be the focus of the “Charles and Elizabeth Handy Lecture Series” in 2025. Following the loss of his beloved wife Elizabeth in 2018 and a severe stroke, Charles was much reduced in mobility in his last years – but not in his determination to continue spreading his message of hope to the world. He couldn’t participate in person in the Drucker Forum 2022, but he participated in a moving online interview with his son Scott, who directed young actors in a short performance of Beckett’s Waiting for Godot by Beckett to illustrate some points.  Charles also contributed valued digital articles for our blog and for Drucker Forum partners. Even during the most difficult period of his life he continued to write and develop his ideas in weekly columns for the Idler magazine. This entailed first memorizing the article, then dictating it and finally reviewing it by having someone it re-read to him – a remarkable feat of memory and determination. The article is a jewel and most appropriate for Christmas and the season of self-reflection. Have a wonderful Christmas, happy holidays and a healthy and prosperous New Year.

The Future of Knowledge Work: What Drucker can teach us

By Karen Linkletter Ph.D. • November 19, 2024
Interview with Karen Linkletter at the 16th Global Peter Drucker Forum 2024  Video Interview
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