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Peter Drucker was Totally Clueless

June 4th, 2009 @ 11:30 am

21 Comments

Categories: Management, Marketing, Rant, Sales Process, Watercooler

Tags: Business, General Motors Corp., Marketing Research, Sales Strategy, Marketing, Sales, Geoffrey James

He might have been clever about some things, but when it came to the importance of selling to business, the late Peter Drucker was so clueless that it’s amazing anybody took him seriously.  In his book Management: Tasks, Responsibilities, Practices Drucker wrote that “the aim of marketing is to make selling superfluous” and that “the right motto for business management should increasingly be ‘from selling to marketing.’”  That crock of egregious BS has totally screwed up thousands of companies, and it’s still wreaking havoc, as evidenced by the decline and fall of GM.

The main problem with Drucker’s thesis is that it’s completely contrary to both common sense and human nature.

Selling, as a human behavior, predates recorded history. Anthropologists have noted bartering behavior among non-literate cultures and even non-human primates.  As such, Drucker’s prediction that selling will become “superfluous” ranks on the “that ain’t gonna happen” scale right up there with Saint Paul’s notion that celibacy will replace sexuality and Lenin’s concept that the state will wither away.

Selling is business, and business is selling.  If selling isn’t taking place somewhere, there isn’t a business.  Period.  Sure, there are some buying situations (like retail consumer goods) that don’t require the physical presence of a sales rep.  But even in those situations, there’s always a sales rep in the background, representing the manufacturer, making sure that the product gets to the outlet.

Unfortunately, Drucker’s silly idea has taken root inside MBA programs, almost all of which basically ignore selling or see it as an appendage to marketing. IMHO, it is insane that MBA programs can pretend to teach “business” without spending at least a third of their time on the most important function that any business has, which is SELLING.

Selling takes place EVERYWHERE inside a business.  People have to sell their ideas, they have to sell themselves as the right person for a job, they have to sell their colleagues on working together.  Even when you’re not actually selling to customers, selling STILL is what business is all about.  Business without selling is like reading without words or eating without food.

Even so, Drucker’s weird anti-selling, pro-marketing meme has infected the business world so thoroughly that companies and executives repeatedly focus on marketing issues, when their real problems lie elsewhere.

GM is a gigantic case in point.  In obedience to comrade Drucker, the company focused on brand marketing rather than fixing its two real problems: 1) lousy products, and 2) a sales culture that antagonized buyers.  (See “What Killed GM?  Brand Marketing“)

If GM had fixed those two problems in the 1970s — right when Drucker was spouting his worst nonsense — the company would be sitting pretty.  The Japanese companies would never have been able to gain traction simply by having superior products.  And they never would have been at a competitive advantage if GM’s management had figured out how to make car buying a pleasant experience.

I could cite dozens of other examples, but it’s probably wasted pixels.  The sad truth is that there are no lack of people in today’s business world who have drunken the Drucker Kool-Aid, if only after it’s been filtered through the intellectual digestive track of some other over-rated academic.

These misguided souls really think that marketing should not just replace sales, but should be running the entire company.  Just check out some of the comments to these two posts:

Incredible, eh?  It’s like some cult where the members are impervious to logic and common sense.  Absolutely insane.

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  •  
    1

    Bernieh

    06/04/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Come on now. Are you really picking on Peter Drucker? Is that the best topic you could find to write about? Even if you were joking in your suggestion that Drucker is responsible for GM's woes, you would still be exposing yourself as the one who is clueless! Are you insane? You were just messing with us - right? Hey, I hear, All Gore invented the Internet!

  •  
    2

    Geoffrey James, Sales Machine

    06/04/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re: Note 1:
    What, so I'm supposed to kowtow to the guy, even when something he wrote is completely ridiculous? That's not me at all. The philosophy that he espoused in this case was idiotic and pernicious and, when put into practice, had the ramification of empowering marketing to undertake all kinds of useless activities that have no relationship whatsoever to selling and which are therefore useless. Even if every other idea of his was spot on, that idea was seriously stupid.

  •  
    3

    robpait

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    From a lifelong marketing guy: bingo. If you ain't sellin, you ain't workin. Even when marketing, you're selling by a different name. That's what makes the cash register ring. It's self-evident, perhaps too obvious. Apple, one of the biggest brands on the planet, hasn't done a "brand" spot in years-- they're selling product in every ad they make. Phil Knight, a brilliant marketer, once cut one of his favorite Nike ads-- the one where historical footage of Steve Prefontaine was superimposed on buildings with people on their morning runs-- because, and I quote, "it didn't move the needle." Guys who make the money understand-- you're always, always, always selling.

  •  
    4

    kmw8

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    I've always said that until we call it Smartketing or some combination of sales and marketing, if the two remain at odds we all lose out. The sooner we combine forces for the greater good - the better.

    In a sense Peter is not that far off in the normal plane of existance for a single human. Nowadays I can buy whatever I need online, and avoid human contact period. In fact - most of society spends their time trying to avoid sales people at all costs. That's why i tend to buy cars online too - car salesman are about as necessary as...won't go there.

    Anyway, if you are talking B2B - different scenario. Bear in mind though that most humans are NOT engaged in B2B sales transactions. A few individuals at each company are - sales/marketing at one, purchasing/stakeholder at another. From my math that is not the vast majority of we working folk.

    That said - I need to know what large population enjoys being sold to by another person? Maybe that is where Peter was headed. That because we are so annoyed by that aspect of 'sales' - the only compensating mechanism to "sell" is marketing - and I state that loosely.

    Even though people bartered since biblical times - the need for a salesperson in that process is not required. I would refer to eBay as a minor example of that. Barter <> Sales

  •  
    5

    bkennedycse

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    My daddy always taught me to never risk my reputation and integrity by picking a fight with someone who can't fight back.

  •  
    6

    TJKdbDNA

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    You can't sell crap to an informed consumer. That's the demise story of the Big 3. There is no documentation from real quality metrics that back up the nonsense that "American cars are as good as most of the imports." Mean time between failure, QA/QR standards all go to Japan. The trouble with the Big 3 is the same with politicians. In their minds, if the consumer doesn't buy it, there is something wrong with him.

  •  
    7

    upshift

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Peter Drucker is correct.

    66% of the GDP is based on consumer spending. How many
    "Swiffer", "Tide", "Head & Shoulder" , "Nike" sales...etc. reps
    have you met? (You being the average person in America.)

    Drucker did not say that you don't need sales reps, but that
    direct sales are a small, and getting smaller, part of the
    equation. Especially since that book, that you refer to, was
    written in 1973 with an update in 1993, long before the
    Internet was used or fully accepted by consumers, or even
    B2B for that matter.

    Yes, as somebody pointed out, the product or service has to
    be good or no matter what it will fail. However a good
    marketing message along with the effective use of various
    media is far better than direct sales, with the exception of
    niche product and services for which there is little
    alternative.

  •  
    8

    Geoffrey James, Sales Machine

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re: Note 5:
    Yeah, as if there were hundreds of B-school professors who are his disciples, as well as thousands of marketeers who espouse his views. Just because somebody is dead doesn't make his ideas off limits to criticism.

  •  
    9

    Geoffrey James, Sales Machine

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re: Note 7:
    In fact, the exact opposite is taking place. The number of direct sales reps are not going down; they're going up. However, the nature of the job is changing radically because the commoditization of one product always creates new markets for non-commoditized solutions and services that would have been impossible without said commoditization.

    It's interesting, though, that you can talk about "service" when one of the points of having a direct sales force is that the mere fact that it exists is a "service" to the customer. For example, I have an insurance agent. I trust him COMPLETELY (and have very good reason to do so) and buy exclusively from him. Could I screw around on the web and find something cheaper. Maybe... but it would cost me much more than I'd save in terms of hassle. Better to have the "service" of an agent.

    The same is true in hundreds of thousands of situation, which is why Drucker -- and you -- are both wrong.

  •  
    10

    raoul27

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Kudos to GJ for not kowtowing. No better way to get to the essence of the debate then posting a provocative and thoughtful, reasoned position.

    Keep kicking the seemingly sacred incumbent institutions (academia, Board rooms , etc.) in your "sales" and "marketing" world! Are there any sacred business institutions left considering the present state of affairs? Hellno!!

    This outside-the-sales-profession professional appreciates change and further accountability and what better way to do it then break away from the herd and be heard.

    Nice goinng GF.

  •  
    11

    mmello

    06/05/09 | Report as spam

    Maybe Drucker was reflecting on his time

    There IS a strong connection between PDrucker and GM. His experience consulting to the automaker was seminal to his work and we can only imagine that he has been immensely influential within the company.

    I can think of one or two instances, when moving from a too salesforce-centered to a less expensive pull strategy (e.g. advertising + mail order or retail) is sound, specially in consumer businesses.

    Of course GF is right when he points out that behind this passive sale there is a vicious battle being fought, between sales rep, their competitors and retail buyers.

    All that said, I believe Drucker was addressing companies from a world far removed from ours, in a time most "captains of industry" hadn't even heard about marketing, mass markets etc. and were siting on their pants, thinking the world would remain the way it had been. I think, in that sense, that Drucker has rendered a service to his contemporary audience. But I also agree that the "marketing as substitute for selling" is a nonsensical ulterior development (BTW, specially favored by academia indeed).

  •  
    12

    Geoffrey James, Sales Machine

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re: Note 11:
    Yes, I feel it's amazing that I'm the only one who's drawn a connection between Drucker's extensive work with GM and GM's failure to adapt in 1970s and beyond. When it comes to management consulting, the proof is in the profits, and it's clear that whatever Drucker was teaching GM, it wasn't what was needed.

    Drucker taught that marketing was everything. (An oversimplification, but it's still basically true.) He helped turn GM into a marketing-centric company. As a result, GM neglected product quality and sales which are INFINITELY more important.

  •  
    13

    ingoodcompany

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Well, GJ, this little rant of yours is a good indication you're off your meds again. You remind me of The Great Visini in the movie "Princess Bride" when beginning a battle of wits with Wesley, disguised as 'The Dread Pirate Roberts".

    Wesley: "You must be very smart."

    Vesini: "You've heard of Socrates?"

    Wesley: "Yes."

    Vesini: "Aristotle?"

    Wesley: "Yes."

    Vesini: "Morons!"

    To brand Drucker as "clueless" on a subject, and then suggest that his 1970s advise on marketing is responsible for GM's 2008 demise...well, its a bit over the top, and serves no one well. Drucker's dead, true enough, but his body of work speaks in his defense. Like others, I at first thought your headline was a joke. As you indicated, you know neither what Drucker told GM nor do you know whether they listened to him. And even if they did listen, you don't know whether their execution of his instruction was flawed. You just don't have enough information to draw your headline conclusion.

    Linking Drucker's advice given to GM's management 40 years ago to its demise in a recession and 2008 global economic meltdown doesn't even qualify as a good rant. Its more like a Tourette's attack. Its hard to imagine how else you could have been stirred to print that headline followed by a baseless contention.

  •  
    14

    ingoodcompany

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Sorry...meant to add this:

    If GM was the only car manufacturer that went under, you'd have a tenuous link at best. But GM isn't even the only company that went under, not by a longshot.

  •  
    15

    rudicjoustra

    06/05/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    It seems to me you did not understand what Peter Drucker (and all other marketing books) actually meant. Marketing is to identify the real needs of a customer and design/build a product or brand based upon that in such a way that the customer wants to buy it and nothing else will do. Nike, Coca Cola, Sony Walkman, Post-it notes hardly need to be sold, customers only want those brand/products, nothing else. I dont think Drucker meant that there would be no sales people required anymore, because the sales transaction is still required. But the sales job becomes more easy since those brands/products sell more or less themselves. GM in my opinion did not follow the marketing concept. They kept on selling cars which are compared to the competition technically out of date, unreliable and gas guzzlers and eventually too little people wanted them.

  •  
    16

    Geoffrey James, Sales Machine

    06/06/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re: Note 15:
    The companies that make Nike, Coca Cola, Sony Walkman, Post-it notes all have massive salesforces. The selling takes place at the wholesale level. Without selling, you do not have a business. Period.

    Re: Notes 13-14:
    Yes, yes, only a crazy person would criticize Drucker for promoting a philosophy of business that's wasted billions of dollars are marketing BS.

    I love the way that you let Drucker off with a "head I win, tails you lose" relationship with cause and effect at GM. (If they fail, it's because they didn't listen; if they succeed it's because they did.)

    The problems that destroyed GM -- which is much worse off than the rest of the car industry -- began in the 1970s. They were the direct result of Drucker's mistaken notion that you can market your way out of an existential threat. That idea became part of the GM culture, specifically, and more generally, part of the U.S. auto industry. The rest is history.

  •  
    17

    bkennedycse

    06/08/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re #8: I agree that the ideas are open to criticism. Heck, you even mentioned the B School profs who promote the ideas. I agree with you. They are living, and can be addressed now as Clueless. They are the ones teaching this stuff. The topic however wan't the philosophy that B school profs are clueless for teaching it; but that this dead guy was clueless. I have no problem arguing a philosophy taught by the living.

  •  
    18

    Geoffrey James, Sales Machine

    06/08/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re: Note 17:
    I don't see the fact that somebody is dead makes them immune from criticism. Nor does saying something stupid make everything that one said stupid as well. For example, William F. Buckley once claimed that white people were the "superior race." Total clueless BS then and now. But he also said many things that made sense.

    Same thing with Drucker. For example, I heard him interviewed right before his death, and he explained that the problem with American corporations was the cult of "leadership." He maintained (and he was dead right) that what companies need are managers, not leaders who are puffed up with their own "vision." He was a smart guy, he just didn't understand sales.

  •  
    19

    rudicjoustra

    06/12/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re. point 16, sales and sales forces follow marketing. Period. Companies like Nike etc. have done their marketing properly and customers as a result of that hit the shops to buy Nike and Nike alone. That is why they need a large sales force, to do the sales transactions, not to "get the sale". Marketing has done that already for them. Period. GM could well be an example of a company following a "rip off" strategy; e.g. using or boosting the brand image to sell an inferior product. They got away with it for a long time and so are many others still. Last but not least; I do not see Peter Drucker as "the" marketing expert, more as the management expert. For me Philip Kotler is the marketing guru. Period.

  •  
    20

    Geoffrey James, Sales Machine

    06/13/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    Re: Note 19:
    Yes, yes. Nike, of course. Why didn't I think of Nike and the five other brands that people recognize? Since those five brands should obviously be a reason to waste billions of dollars on brand marketing, because if it worked five times, it ought to work five thousand times. Especially in B2B, where branding is just SO important.

    Kotler and his ilk are a waste of ink:

    http://blogs.bnet.com/salesmachine/?p=2306

  •  
    21

    johnlaurence

    06/25/09 | Report as spam

    RE: Peter Drucker was Totally Clueless

    The problem here is that people are always trying to find a "one size fits all" approach to selling a product. A good manager studies the market and comes up with an approach to sell a product that works in the particular environment that they are dealing with. The argument that you should only use sales or only marketing techniques is a moot one - every situation is unique. Managers need to know all of the techniques and be able to choose the best combination that is required.

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