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Peter Drucker is an Austrian author, educator and management consultant. He has been described as the founder of modern management, and being modern means that he approaches business with science and reason. Joseph Schumpeter, an economist, who tackled the topics of entrepreneurship and innovation, a friend of his father, is Drucker’s major influence on the said topics.
By now, most of us have heard from many management consultants and business authors that innovation is the key to survival and success of a company. This idea has been reduced to a philosophy: innovate or die, which is attributed to Drucker, but this is still a matter of dispute according to a Harvard article entitled, Innovation on the fly.
Here, I will share lessons on innovation I have learned from reading Peter Drucker.
First I would like to say that for Drucker, innovation is beyond do or die. With how Drucker characterized and defined innovation, it is easy for writers to conclude that he would say those words. In a Harvard 2002 article, he said, “innovation is the specific function of entrepreneurship, whether in an existing business, a public-service institution or a new venture started by a lone individual in the family kitchen. It is the means by which the entrepreneur either creates new wealth-producing resources or endows existing resources with enhanced potential for creating wealth.” What I got here is not about survival and success but innovation as a tool that shifts resources to greater yield.
Drucker, it seems, is less interested in survival and success of a company and more on the improvement and development of humanity and society. He wrote this definition that appeared in his book: technology, management and society. This is how it goes, [innovation is] “the purposeful & deliberate attempt to bring about, through technological means, a distinct change in a way man lives and his environment – economy, society, the community, so on….” So here we see that the consequence of innovation is social value. This point of view, to me, is crucial in presenting innovation because often companies chase innovation for money more than creating value for others.
So, the first lesson is that innovation leads to improvement of humanity and society. The second one is about what it takes to make successful innovation.
Creativity, defined as ability to generate novel and unique ideas, is often thought by many consultants a per-requisite for innovation. I also thought this was the case until I read Drucker and for him, Innovation “is capable of being presented as a discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation.” The focus here is the objective search for innovation, less creativity but more research discipline. This is not to say that creativity has no role in innovation, if creativity here is defined as being able to create and make things happen, then this is what Drucker wrote as one of the requirements for successful innovation, “innovation is work…innovation becomes hard work, focused, purposeful work making very great demands on diligence, on persistence and on commitment. If these are all lacking, no amount of talent, ingenuity, or knowledge will avail.”
So that was the second lesson, innovation is about search and hard work. The last one is about risk taking.
There is no risk taking involved in innovation. This for me is a big takeaway being educated in an entrepreneurial environment that led me to believe in the propensity of entrepreneurs to take risks. In media and most mainstream books, entrepreneurs, and innovators are sculpted into figures that present them as risk-takers. This is not the case for Drucker when he wrote, “ most of them [innovators] in real life are unromantic figures, and much more likely to spend hours on a cash flow projection than to dash off looking for risks….. Successful innovators are conservative.” That was the last one.
I learned not to see innovation from success and survival point of view but from transformation perspective. That creativity plays a little role in successful Innovation because innovation is about hard work and research. Finally, innovation is done conservatively to the point of taking little to no risk.