A Conversation With Peter Drucker

CIO — In the past 10 years, companies have learned that information has the power to drive their businesses. This has caused tremendous change to such fundamentals as strategy, organizational structure and market reach.

To explore these developments with some historical perspective, we brought together two big thinkers on business and information management. Last spring, Tom Davenport --director of the Information Management Program at the University of Texas at Austin, CIO columnist and co-author of Information Ecology: Mastering the Information and Knowledge Environment (Oxford University Press, 1997) --visited professor Peter F. Drucker at his home in Claremont, Calif. Drucker, one of the world's most noted authorities on corporate management and professor at Claremont Graduate School, introduced such innovative ideas as the rise of the knowledge worker and the transition from assembly line to flexible production and empowerment. The pair weigh in on the state of reengineering, information management, the psychology of managers and the role of technology in the last few years of the 20th century.

Davenport: What do you think about reengineering? Did something go astray?

Drucker: Yes, obviously --two things. One is that the father of the term, [Michael] Hammer, realized that one could make a great deal of money by asserting that you could learn to reengineer your company in a three-day seminar, provided you paid enough. The other problem is that reengineering became associated with wholesale firing. And in a way, Hammer and [James] Champy, [who together wrote a manifesto on reengineering,] were not guilty of it, but in order to sell it, they did imply that you would need fewer people.

Reengineering is a way of seeing the processes of the firm. You always need to reallocate people because you change the processes. But I am not sure that even the majority of reengineering cases require fewer people. You may need fewer of one kind and more of another.

Davenport: Maybe the problem was that reengineering got too popular for its own good. I'm not sure anything could have lived up to that level of expectation and hype.

Drucker: Reengineering became the bandwagon, and everybody jumped on it. Now many have jumped off. Predictably, there will be a lot of companies that will quietly keep on doing it and then in six years will know how to do it. Maybe we should give the child another name so that nobody remembers.

You may say it was oversold; I say it was overbought. [Hammer and Champy] tried to find clients who were going to make the world over in three days. [Reengineering] will come back. How soon I don't know. But within 10 years for sure.

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