Monday, 16 July 2012

Liberal Arts and the Art of Business

A new book by Philip Delves Broughton emphasises the simple logic of Peter Drucker

One sale leads to another
Today’s business world can seem focused on the minutiae, blindly pursuing seemingly important deadlines whilst missing the bigger picture. In many ways Drucker’s career was about bringing humanity and simplicity into the realm of management science. According to the great guru there are only ever two important aspects to business: innovation and sales. The rest is mere detail.

While the first of these is positively revered; the latter is often sniffed at. Broughton’s book, life’s a pitch, tries to fight for a noble view of the salesman. In a fashion reminiscent of Drucker, the author opts for engaging anecdotes rather than facts. Broughton draws on history and psychology to explain management puzzles in place of cold empiricism.

A young Drucker, attending a conference at Cambridge University delivered by the eminent economist John Maynard Keynes, quickly recognised he didn’t fit in with conventional thought.  “I suddenly realized that Keynes and all the brilliant economic students in the room were interested in the behaviour of commodities,” writes Drucker, “while I was interested in the behaviour of people.”  

This observation typifies Drucker’s view of macroeconomics: complex, impressive, but ultimately mistaken. Drucker felt that the macroeconomist didn’t incorporate the human aspect into his theories, hence making shrewd forecasting difficult.

However Drucker’s own prescience proved remarkably accurate on a number of fronts. The rise of the knowledge worker, outsourcing and Japanese industrial power were all recognised by Drucker in the 1950s. Instead of rigorous empirical analysis, Drucker drew on the simplicity of relationships. Consider his irrefutable logic on the rise of outsourcing:

As employees of a college, managers of student dining will never be anything but subordinates. In an independent catering company they can rise to be vice president in charge of feeding the students in a dozen schools; they might even become CEOs of their firms. If they have a problem, there is a knowledgeable person in their own firm to get help from. If they discover how to do the job better or how to improve the equipment, they are welcomed and listened to.

This demonstrates Drucker’s commitment not only to more efficient business, but to improving the lot of individuals by participation in capitalism. It is interesting that Drucker saw business as a noble enterprise whose main role was to serve its customers rather than make profit.

Though Drucker wasn’t fond of Keynes, another economist, Joseph Schumpeter had a lasting effect on him. A friend of Drucker’s father, Schumpeter introduced a young Drucker to entrepreneurship, a running theme throughout both men’s great works.  This helps to explain why Drucker saw entrepreneurship, simplicity and ‘real life’ examples as vital ingredients to a good business book. 

Broughton’s own work seeks to emulate this tried and tested formula, applying it to the salesman. Providing provocative anecdote rather than hard facts, the reader is introduced to the culture and historical perspectives of salesmanship. From classical Greece to medieval France, Broughton ties seemingly uncorrelated happenings.

Perhaps Brougthon’s greatest insight stems from his analysis of the resilience of the salesman. Given the choice between closing a sale 9 out of 10 times and 1 in 10 times, a salesman worth his salt would opt for the latter. Why? It is due to what Broughton terms, ‘the hero’s journey’. This is the battle that by virtue of wit and charm combined with remorseless energy, the salesman brings home the deal.

This refreshing take on the human psyche is reminiscent of Drucker. Business is often perceived as a hardnosed aspect of life, a necessity which needs to be carried out, but not something to enjoy. This somewhat British view of enterprise has become ever more entrenched since the onset of stagnation in the developed world.

Still, the cultural aspects of commerce are enlightening. From the negative sentiment surrounding the salesman to the engineer placed on capitalism’s pedestal. Drucker and now Broughtons’s, multi-faceted approach to the discipline of management not only makes for more interesting tales, but more insight.

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