The Art of Management
How Alfred P. Sloan, Michael Porter, and Peter Drucker Taught Us All
By Geoffrey Colvin

(FORTUNE Magazine) – It seems we have some explaining to do.

We're about to give you 15 pages of top business leaders offering the best advice they ever got, plus other articles veritably brimming with advice on how to run your career and your business, and it's terrific stuff, believe me. But because this package of articles commemorates FORTUNE's 75th anniversary, we're forced to confront a little problem.

Back in 1929, in the prospectus Henry Luce wrote for the magazine that he proposed to call FORTUNE, he included a page headed "How FORTUNE Differs," and on that page he made the following promise:

"It will contain no advice on how to run your business."

Since we break that promise so egregiously in the following pages--not to mention having broken it in some 40 zillion previous articles over the decades--a bit of explanation is perhaps in order. As it turns out, the explanation is only a little about FORTUNE and a whole lot about society, business, the rocky rise of management as a discipline, and how offering business advice progressed from being vaguely distasteful to being actually respectable.

For starters, you have to wonder what on earth Luce was thinking when he made that promise. What could possibly be wrong with publishing advice on running a business? In theory, nothing. In practice, business advice was then the province of a few serious researchers and writers and a great many hacks, promoters, and con men. Such 1920s books as How to Increase Your Sales, How to Double the Day's Work, and How to Sell More Fire Insurance were often sound enough, but they were just commonsense instruction manuals, at best plodding and uninspired. As for the era's business magazines, Luce's disdain for them was acidic: "The cheapest, least distinguished of magazines," he called them. And those pathetic rags were packed to the gills with business advice.

Luce wanted something entirely new, a big, extravagantly produced, utterly authoritative magazine, "a national institution" for America's 30,000 most important businessmen (the concept of businesswomen being yet unimagined). The magazine would bear no relation whatever to any existing business magazine. And that clearly meant: no advice.

If existing books and magazines only carried business knowledge ranging from nuts-and-bolts instruction at the high end to scams and bunk at the low end, and a higher-class effort like FORTUNE refused to carry any advice at all, then how did business wisdom get conveyed and disseminated? If you were lucky you heard it from your father or grandfather or uncle, or maybe from a family friend. You probably did not hear it from your boss. As Peter Drucker explains in the following article--he who was the 20th century's greatest font of profound business wisdom and the only one of our interviewees who was a working adult (a journalist) in 1930--in those days, if you didn't do your job well enough, you didn't get offered training or a mentor. You got fired.

The idea of high-IQ specialists who would survey the broad world of management and extract deep truths--respectable advisors like McKinsey consultants--didn't yet exist. McKinsey & Co. was up and running (founded 1926), as were Arthur D. Little, A.T. Kearney, and other still-famous consultancies, but they focused then on engineering or accounting, not management. The raw material for broad-scale business analysis was abundant in America's dramatic economic story through the '20s, '30s, and '40s. It just wasn't being mined.

So while FORTUNE was determinedly advice-free back then, what it did offer was more raw material than you could handle. You just had to extract the advice yourself. Thus the first feature article in the first issue, an examination of the pork-packing business and Swift in particular (enigmatic title: "Tsaa-a Tsaa-a Tsaa-a"), conveyed stacks of wisdom about economies of scale, the power of advertising, the effects of technology (refrigeration), and the perils of entering into consent decrees with the feds. The lessons were laid before you, gentle reader, but it was up to you to see them.

That all started to change after World War II, when began what we might call the modern era of business advice. Its foundation was Peter Drucker's 1946 book, Concept of the Corporation, which launched the idea of management as a discipline worthy of study. (It also launched Drucker as a consultant, to capitalism's lasting benefit.) This shot of intellectual jet fuel into a superheating postwar economy sparked countless minds in companies, consulting firms, and universities.

The academics started cranking out sophisticated, math-based tools that revolutionized daily commercial life: linear programming for optimizing physical operations, statistical process control for quality, the capital asset pricing model, and other revelations of the mysteries of corporate finance--all enormously valuable still today. Through the '50s, '60s, and '70s, an efflorescence of awesomely brainy consultants developed substantive new managerial concepts--McKinsey's seven S's, Michael Porter's five forces, the Boston Consulting Group's growth-share matrix and learning curve. Here was a new kind of business wisdom: nonobvious, powerful, widely applicable, really valuable. This was business advice of a kind that Henry Luce never dreamed of in 1929. This was worth reading about. And thus we broke Luce's promise.

But the newly mushrooming supply of sophisticated business wisdom was only half the story. Demand was exploding too. America had clearly entered "The Age of the Managers" (a headline from our 25th anniversary issue in 1955), and if you're putting out a magazine for people who conceive of themselves as professional managers above all--not bond salesmen, tin smelters, apparel buyers, sugar refiners, or admen, but managers first--then you write about the theory and practice of managing. In other words, how to run your business. Because succeeding in the age of the managers required the skills for thriving in an organization, we began offering advice on that as well. Thus 1953's "How to Get a Raise," 1955's "Notes From a Commencement Address," and a classic of the genre, William H. Whyte's 1954 instructions on how to cheat on personality tests.

Managerial wisdom (as distinct from career advice) still got conveyed mainly in articles that were not about specific management ideas but rather about organizations and their practices, which just might be useful to you. Arguably the most significant example was our multi-issue 1963 excerpt of Alfred P. Sloan Jr.'s classic book, My Years With General Motors, ghostwritten by FORTUNE's John McDonald. That work was such a landmark it moved the editors to--brace yourself--put a living, identifiable person (Sloan) on the cover for the first time in our history.

Only one more step remained for management advice to be unshackled completely, considered respectable enough to be presented to a general audience with finger-wagging, here's-what-you-should-do directness. That step was the publication of The One Minute Manager in 1981 and In Search of Excellence in 1982. Obviously those tomes weren't the first management advice books, but they were the first to sell millions of copies and sit on the bestseller lists for years. Coinciding with America's economic resurgence after the godawful '70s, they made management writing mainstream and prepared the way for a long and continuing line of business megabooks. When the Excellence sequel (A Passion for Excellence) appeared in 1985, FORTUNE not only bought the serial rights but also made the excerpt our cover story.

And with that the journey was complete, the changing attitudes of intelligent businesspeople toward written advice being mirrored in our own journey--from solemnly forswearing business advice to putting it on our cover, as we have done many times since, even unto the issue you hold in your hands.

So what's next? Today's businessperson has access to more good advice than at any time in history (plus of course terabytes of lousy advice, which will always be with us). Business books are better than ever. Through organized mentoring and other efforts, companies are trying to preserve the wisdom that resides only in employees' heads. Yet it's worth observing that when we asked more than two dozen particularly successful businesspeople for the very best advice they ever got, only two said they got it from a consultant, and in both cases that consultant was the singular Peter Drucker. The rest got it mostly from bosses, mentors, and parents.

There's something uniquely powerful about a blunt, declarative sentence spoken aloud by a trusted human being. So just this once, instead of trying to go beyond the brilliant intellectual advice we've been seeking out for years, we're going way back before it, before consultants or equations or matrices, for advice of a different sort. As you'll see in the stories related by these business leaders, the best advice they ever got sometimes isn't business advice at all. It's life advice.

In publishing these stories we don't actually worry much about what Henry Luce would think. But we strongly suspect he wouldn't mind.