Drucker: The Essence of a Company is Making a Difference

Here is a very good summary of Peter Drucker’s thinking on “the essence of a company,” by Oscar Motomura in a recent issue of Harvard Business Review:

When I first met Peter Drucker, 15 years ago, he shared with me ideas that have deeply influenced my work ever since. Chief among them was that beyond just making a profit or creating wealth for stakeholders, the essence of a company is making a difference, being really useful, and creating something the world truly needs.

That higher purpose, Drucker pointed out, has to be something grand — like General Electric’s ambition to be, as he put it, “the leader in making science work for humanity” — and not superficial, like so many of the mission statements that companies have nowadays.

Why is such a creed so important? Because without a compelling raison d’etre, a company can’t hope to tap the full potential of its employees. “The number of people who are really motivated by money is very small,” Drucker told me. “Most people need to feel that they are here for a purpose, and unless an organization can connect to this need to leave something behind that makes this a better world, or at least a different one, it won’t be successful over time.”