Dec 7, 2022 8 min read

Peter Drucker’s Memo to Elon Musk on Managing Knowledge Work

The ongoing turbulence at Twitter under the mercurial and sometimes whimsical leadership of Elon Musk is perhaps one of the biggest and costliest social science experiments ever attempted at scale. Musk has broken almost every rule of well-understood and well-researched aspects of organizational performance.

Peter Drucker is widely considered as the father of modern management. When he passed away in 2005, Twitter wasn’t born yet. An astute thinker and a prolific writer, his ideas on knowledge work were ahead of their time and have proven robust. Meanwhile, Musk’s actions at Twitter seem to take us back into the early 1900s.

Drucker famously advised Jack Welch amongst many others. What would he have told Elon Musk?

There’s no way to know for sure but we can speculate based on Drucker’s extensive writings on knowledge work.  I have kept my own commentary minimal in order to emphasize the contrast between Drucker’s notions and Musk’s actions.


Managing knowledge workers is a marketing job

Increasingly, employees have to be managed as partners—and it is the definition of a partnership that all partners are equal. It is also the definition of a partnership that partners cannot be ordered. They have to be persuaded. 

Increasingly, therefore, the management of people is a marketing job.

And in marketing one does not begin with the question, “What do we want?” One begins with the question, “What does the other party want? What are its values? What are its goals? What does it consider results?”

Musk's actions so far have been more anti-marketing than marketing. He might have created a challenge but I am not sure how clear his mission is. Ordering rather than persuading seems to be his default way of operating.

Fear doesn't work

Managing knowledge work and the knowledge worker will require exceptional imagination, exceptional courage, and leadership of a high order. In some ways it will be a far more demanding task than managing the manual worker. 



The weapon of fear—fear of economic suffering, fear of job security, physical fear of company guards or of the state’s police power—which for so long substituted for managing manual work and the manual worker, simply doesn’t work at all for knowledge work and knowledge workers.


Knowledge workers, except at the very lowest levels, are not productive under the spur of fear; only self-motivation and self-direction make them productive. They have to be achieving in order to produce at all.

In contrast, Musk seems to use fear and coercion as a primary motivating mechanism.

Knowledge workers as volunteers

They have to be treated and managed as volunteers, in the same way as volunteers who work for not-for-profit organizations.
...
The first thing such people want to know is what the company is trying to do and where it is going. Next, they are interested in personal achievement and personal responsibility—which means they have to be put in the right job. Knowledge workers expect continuous learning and continuous training. 



Above all, they want respect, not so much for themselves but for their area of knowledge. In that regard, they have moved several steps beyond traditional workers, who used to expect to be told what to do, although later they were increasingly expected to “participate.” 

Knowledge workers, in contrast, expect to make the decisions in their own area.

Musk's handling of employees so far has been considered not just disrespectful but even downright cruel.

Knowledge work productivity

Drucker highlighted six major factors affecting knowledge worker productivity. Consider three of those:

2. It demands that we impose the responsibility for their productivity on the individual knowledge workers themselves. Knowledge workers have to manage themselves. They have to have autonomy.

5. Productivity of the knowledge worker is not—at least not primarily—a matter of the quantity of output. Quality is at least as important.

6. Finally, knowledge-worker productivity requires that the knowledge worker is both seen and treated as an “asset” rather than a “cost.” It requires that knowledge workers want to work for the organization in preference to all other opportunities.

Each of these requirements—except perhaps the last one—is almost the exact opposite of what is needed to increase the productivity of the manual worker.



As Drucker stated, Musk’s behavior is more geared towards manual work than knowledge work. He's operating under a different paradigm with the following assumptions:

  • That he knows more about the work than the people who’ve been at it for years.
  • His insistence on eliminating work from home and putting in 12+ hour days seems to focus on quantity rather than quality of output.
  • His treatment of employees is the very definition of the knowledge worker as pure “cost”. There is no notion of “asset” in any of his behaviors. (albeit this is pretty common today thanks to quarterly stock market performance metrics)

Drucker's statement, “that knowledge workers want to work for the organization in preference to all other opportunities” is prescient — more than a third of the remaining employees voluntarily quit following an ultimatum from Musk.

Work as both productive and achieving

Making a living is no longer enough. Work also has to make a life. This means that it will be more important than ever to make work both productive and achieving.

At the same time, both manual workers (with their deep psychological insecurity) and knowledge workers (with their new status) expect work to provide nonmaterial psychological and social satisfactions. They do not necessarily expect work to be enjoyable, but they do expect it to be achieving.

The “achieving” dimension is probably one reason why people might stick around. Given Musk’s track record so far, that’s at least one selling point he does have.

Knowledge work productivity is hard to define

We cannot truly define, let alone measure, productivity for most knowledge work….Achievement for knowledge workers is much harder to define.

No one but the knowledge workers themselves can come to grips with the question of what in work, job performance, social status, and pride constitutes the personal satisfaction that makes a knowledge worker feel that she contributes, performs, serves her values, and fulfills herself.



Musk insists on his employees coming into work and putting in 12 hour plus days. Perhaps "time in seat" equates to productivity in his book.

Most valuable assets of a company

The most valuable assets of a twentieth-century company were its production equipment. The most valuable asset of a twenty-first-century institution, whether business or nonbusiness, is its knowledge workers and their productivity.

Based on this definition, Musk has been actively destroying Twitter’s most valuable asset. His actions probably reduce productivity, not increase it.

Management’s duty

Management’s duty is to preserve the assets of the institution in its care.

What does this mean when the knowledge of the individual knowledge worker becomes an asset and, in more and more cases, the main asset of an institution? What does this mean for personnel policy? What is needed to attract and to hold the highest-producing knowledge workers? What is needed to increase their productivity and to convert their increased productivity into performance capacity for the organization?

If this definition is taken at face value, Musk can easily be accused of gross negligence.

Ability to attract and retain the best

We will have to redefine the purpose of the employing organization and of its management as both satisfying the legal owners, such as shareholders, and satisfying the owners of the human capital that gives the organization its wealth-producing power—that is, satisfying the knowledge workers. 



For increasingly the ability of organizations—and not only of businesses—to survive will come to depend on their comparative advantage in making the knowledge worker productive. And the ability to attract and hold the best of the knowledge workers is the first and most fundamental precondition.

Incentives are different from disincentives

Of course knowledge workers need to be satisfied with their pay, because dissatisfaction with income and benefits is a powerful disincentive. The incentives, however, are different. 



The management of knowledge workers should be based on the assumption that the corporation needs them more than they need the corporation. They know they can leave. They have both mobility and self-confidence. 



Right now he seems to have created more disincentives than incentives.

No allegiance to companies, let alone CEOs

Although the emergence of knowledge as an important resource increasingly means specialization, knowledge workers are highly mobile within their specialty. They think nothing of moving from one university, one company, or one country to another, as long as they stay within the same field of knowledge. 



There is a lot of talk about trying to restore knowledge workers’ loyalty to their employing organization, but such efforts will get nowhere. Knowledge workers may have an attachment to an organization and feel comfortable with it, but their primary allegiance is likely to be to their specialized branch of knowledge.

Professionals not employees— knowledge is nonhierarchical

Knowledge workers…see themselves as equal to those who retain their services, as “professionals” rather than as “employees.” The knowledge society is a society of seniors and juniors rather than of bosses and subordinates.


Knowledge is nonhierarchical. Either it is relevant in a given situation or it is not.

An open-heart surgeon may be much better paid than, say, a speech therapist and enjoy a much higher social status, yet if a particular situation requires the rehabilitation of a stroke victim, then in that instance the speech therapist’s knowledge is greatly superior to that of the surgeon. This is why knowledge workers of all kinds see themselves not as subordinates but as professionals, and expect to be treated as such.

Associates, not subordinates

Knowledge workers are not subordinates; they are “associates.”

...knowledge workers must know more about their job than their boss does— or else they are no good at all. In fact, that they know more about their job than anybody else in the organization is part of the definition of knowledge workers.
...knowledge workers must know more about their job than their boss does—or else they are no good at all. In fact, that they know more about their job than anybody else in the organization is part of the definition of knowledge workers.

Musk's modus operandi assumes a boss subordinate relationship accompanied by the clear assumption that he knows a lot more than his workforce.

Money is not the ultimate yardstick

Money is as important to knowledge workers as to anybody else, but they do not accept it as the ultimate yardstick, nor do they consider money as a substitute for professional performance and achievement. In sharp contrast to yesterday’s workers, to whom a job was first of all a living, most knowledge workers see their job as a life.

Eliminating distractions

The first requirement in tackling knowledge work is to find out what the task is so as to make it possible to concentrate knowledge workers on the task and to eliminate everything else—at least as far as it can possibly be eliminated. But this, then, requires that the knowledge workers themselves define what the task is or should be. And only the knowledge workers themselves can do that.

Work on knowledge-worker productivity, therefore, begins with asking the knowledge workers themselves, What is your task? What should it be? What should you be expected to contribute? and What hampers you in doing your task and should be eliminated?

Musk’s actions seem to confound and confuse rather than clarify. Instead of  eliminating distractions, he seems to be creating them prodigiously that actively prevent “concentrating on the task” not just at the individual level but as an entire organization.


Perhaps every manager can benefit by revisiting these key concepts about knowledge work that Drucker articulated .

Now that we know what Drucker thinks I wonder what's the logic behind Musk’s actions and how he operates. What’s his philosophy? How would he respond to Drucker?

Further Reading

Performance in the human domain is not as straightforward as we want it to be. Many modern day organizations and their HR systems are still based in late industrial revolution principles. I wrote about it in Leaders have to Master the Basics of the Human Domain. Musk seems to epitomize those outdated ideas and hell bent on taking us back there.


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Sources/References

  1. Management by Peter F. Drucker
  2. Management Challenges for the 21st Century by Peter F. Drucker
  3. The Practice of Management by Peter F. Drucker
  4. Drucker’s body of work is extensive. For a good concise introduction to his key ideas check out The Essential Drucker.
  5. More on Drucker : [https://en.wikipedia.org/wiki/Peter_Drucker]
  6. For more context on Musk's actions at Twitter, check out this NYtimes article.

Sheril Mathews
I am an executive/leadership coach. Before LS, I worked for 20 years in corporate America in various technical & leadership roles. Have feedback? You can reach me at sheril@leadingsapiens.com.
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