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Peter Drucker on The Value of Ignorance

Last updated 7/13/2010

Peter Drucker was the most renowned management thinker of the 20th century, but his greatest insights came not from his considerable knowledge, but from his ignorance. In this excerpt from his new book A Class with Drucker, William A. Cohen, a longtime protégé of Drucker, recounts how the “father of modern management” once illustrated to his students the value of ignorance.

Drucker began to reminisce about his work with various corporations both here and in Japan. He told us that it was often very simple things that an outsider could do which would have a major impact in the company he assisted. This was because inside people were generally much too close to the issues, and also because they assumed things from their past experience that they incorrectly thought were identical in the present situation. An outsider would wonder and question these things that a practicing manager in the organization frequently missed, although all managers needed to train themselves to ask questions.

Asked the secret of his success in these endeavors by a student, Drucker responded, “There is no secret. You just need to ask the right questions.”

Unexpectedly, one of my classmates raised his arm and exploded with three questions in rapid succession. “How do you know the right questions to ask? Aren’t your questions based on your knowledge in the industries in which you consult? How did you have the knowledge and expertise to do this when you were first starting out with no experience?”

“I never ask these questions or approach these assignments based on my knowledge and experience in these industries,” answered Drucker. “It is exactly the opposite. I do not use my knowledge and experience at all. I bring my ignorance to the situation. Ignorance is the most important component for helping others to solve any problem in any industry.”

Hands shot up around the room, but Drucker waved them off. “Ignorance is not such a bad thing if one knows how to use it,” he continued, “and all managers must learn how to do this. You must frequently approach problems with your ignorance; not what you think you know from past experience, because not infrequently, what you think you know is wrong.”

Liberty Ships Prove the Value of Ignorance

Drucker immediately launched into a story to prove his point. “After World War II broke out in 1939,” he began, “the British were losing thousands of tons of shipping to German submarines. This was not unimportant, as the British needed the supplies and munitions these ships brought to feed their population and to continue to fight the war.

“In response to the demand and their high losses due to German submarines, the British had come up with a design for an inexpensive cargo ship. These ships were so cheaply built and basic in design that the ships weren’t even expected to remain in use more than five years. They were slow, bulky, and inefficient. However, they had a major advantage and that was the reason that they were built. They could be constructed much faster than any other cargo ship. This was the critical factor. It only took about eight months for each ship to be built from start to finish. This was a significant improvement over the time it took to build a merchant cargo ship previously.

“Unfortunately, there was still a problem,” Drucker went on. “Though England was the first great seafaring nation with centuries of experience in shipbuilding, it still took experts and skilled workers to build a ship, even a vastly simplified design like this one. Britain was fully engaged in all aspects of fighting the Germans. The manpower, shipyards, and production facilities to build the fleets needed simply didn’t exist.

“So, the British looked to the United States, which at that time was not yet in the war. Now the United States did not have a terrific record for merchant shipbuilding on the eve of World War II. In fact, in the previous decade only two ocean-going cargo ships had been built in the United States. However, England was so desperate that it was willing to turn to a country that had little experience and no expertise in building the types of ships needed. The hope was that with the British design and with British help, it might take about a year to build each ship. Since the United States was not yet in the war, it was just possible that the Americans could put enough manpower on the project to produce the ships in numbers that would make the project viable. Anyway, there was no alternative, as German submarines were sinking merchant ships every day.”

Drucker continued his story: “Since few Americans knew anything about building merchant cargo ships, the British cast a wide net and didn’t limit themselves to shipbuilders or those with a lot of experience in the industry. One of the individuals that the British contacted was industrialist Henry Kaiser. Kaiser knew little about shipbuilding and was completely ignorant about cargo ships. However, he looked at the British design and proceeded not with British help and expertise, but out of his own ignorance.

“The British used expert workers who had not only general, but in-depth shipbuilding knowledge. Since he didn’t have such workers, Kaiser asked himself how he could proceed without such expert workers. He came up with a unique solution based on his ignorance of shipbuilding. Kaiser re-designed the assembly process using pre-fabricated parts so that no worker had to know more than a small part of the job and was much easier to train. Moreover, he introduced American assembly-line techniques.

“The British knew that for close tolerances in high quality ships, heavy machinery was necessary to cut metal accurately. Kaiser didn’t know this, and, anyway, he didn’t have heavy machinery. Again, he asked himself a question: ‘How do I cut the metal?’ Again he came up with a solution, but not the one the British had been using. In his ignorance he told his workers to cut the metal using oxyacetylene torches. This turned out to be cheaper and faster than the traditional British methods. In his ignorance, Kaiser replaced riveting with welding, also cheaper and faster.

“Kaiser called his ships ‘Liberty Ships.’ He started building them and it didn’t take him a year for each ship. It didn’t even take him eight months. He started building them from start to finish in about a month. Then they got production time down to a couple weeks and, for publicity purposes, they constructed one Liberty Ship in just four and a half days.

Drucker paused for a moment to let this idea sink in. “Approaching this problem out of his ignorance, Kaiser built almost 1,500 ships at two-thirds of the time and at a quarter of the cost of other shipyards previously. Other American shipbuilders immediately adopted his methods in building these ships. Interestingly, despite the fact that they were not built to last, a couple are still around and in use.”

Henry Kaiser knew nothing about building merchant ships and approached the problem out of his ignorance, not his knowledge in this area, and the results were astounding. Concluding his story, Drucker went on to say that he looked at situations, about which he knew nothing, and asked questions stemming from his ignorance, much as Kaiser was forced to ask himself and his staff questions out of his ignorance. Those whom Drucker helped were frequently surprised that these “ignorant” questions led to effective solutions that helped them with their problems.

What to Do; Not How to Do It

This was typical of the way in which Drucker disseminated his lessons. Drucker taught what to do. He was very specific about this. However, he did not teach how to do it. That was left up to the student or to his consulting clients. Shortly after his death, a tribute in the Los Angeles Times quoted former GE Chairman Jack Welch. Welch credited Drucker with helping him to understand what to do in order to restructure his giant company, a company that was in many disparate businesses conducted in many different geographical locations around the world.

I’ve mentioned this previously, but it is worthwhile repeating here because it reinforces the value of ignorance. Most consultants would not have done what Drucker did. They probably would have begun an expensive and lengthy study of the organization and structure of GE and the location, nature, and profitability of these varied businesses. Drucker cut right to the heart of the issue. He didn’t know much about GE or its businesses, but he did know that it was a mess and required a simplifying process. According to Welch, Drucker asked only: “If you weren’t already in a business, would you enter it today? And if not, what are you going to do about it?” Welch’s comment to his interviewer for the article was: “Simple, right? But incredibly powerful.”

Coming from a position of his ignorance about GE, Drucker had asked two questions that caused Welch to analyze GE businesses using Drucker’s questions as a starting point. Welch had to answer the primary question and then come up with a decision to act, or a conscious decision not to act.

Welch decided that if GE couldn’t be number one or two in the marketplace for any business, he would never have chosen to enter the business in the first place. He gathered the information he needed to determine whether GE could become first or second in the market in each business. Using these criteria, he ruthlessly dropped businesses that he would not have chosen to enter. As a result of this pruning, GE became much more efficient and concentrated its resources on those businesses that it could really exploit. GE became more efficient and effective, and its stock began to skyrocket. This helped to make Welch’s reputation as one of America’s most effective and celebrated executives. Not bad for starting with a little ignorance.

Adapted with permission of the publisher from A Class with Drucker by William A. Cohen. Copyright 2007, William A. Cohen. Published by AMACOM, a division of American Management Association. Click here for more information about this title. For information about other AMACOM books, visit www.amanet.org/books.