The banks were ignoring some of the principles of sound leadership in the run-up to the credit crisis, a leading business commentator has claimed.
Robert Heller, writing in the online magazine Management Issues, asked why Peter Drucker, widely considered the most valued adviser on corporate strategy, was ignored. ‘Turning to the recent and current chaos, it's doubtless that Drucker would have had no patience with strategies that ignored a lifetime of his wisdom,’ he wrote.
He quoted Rosabeth Moss Kanter in the Harvard Business Review as saying that Drucker’s advice might have prevented some of the excesses associated with Wall Street in general, and with AIG in particular, in which bonuses not only were decried for their amounts, but also were often uncorrelated with company results. ‘That is a surprisingly mild critique considering the enormity of the scandals,’ he said.
Mr Heller is author of more than 50 books, and was the founding editor of Management Today and the Global Future Forum.
‘Drucker had a clear eye and long experience so he was never blinded by the latest follies of top managers. Efficiency (doing more of the same things with less effort or cost) and effectiveness (setting the right goals, transforming companies as circumstances changed) were always separate to him.’
The late Mr Drucker was not the only management thinker to have warned against the obsession with financial information and a short-term focus. In 1998, Jeffrey Pfeffer warned in The Human Equation that management practice was moving in a direction diametrically opposite to that indicated by empirical research findings.
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