Shoes are real. Money is an end result.

I’ve tended to devour everything that Peter Drucker wrote or said. One of my favourite Drucker sayings is this one:

No financial man will ever understand business because financial people think a company makes money. A company makes shoes, and no financial man understands that. They think money is real. Shoes are real. Money is an end result.

The first time I saw this particular quote was in an interview that Erick Schonfeld had done with Drucker in Business 2.0, maybe five years ago. And every now and then I’d see little gems from the interview being quoted, but began to get ever-so-slightly frustrated at being unable to find the original piece.

Now I’m a bit like Sean, we still read books, we still read hardcopy magazines, we tear things out, we scribble stuff on the torn-out pages, we squirrel them away. And sometimes we even find them. :-)
And so it came to pass, while clearing my garage, that I found the original October 2001 issue of Business 2.0, The One With The Interview In It. Entire of itself. Unexpurgated, unbowdlerised. [Erick, since your online archives only go back to 2003, may I scan the article in and post it here? Or do you have a link for me to use? I will e-mail you separately]

It’s a fantastic interview. I wish I could link to the whole thing, but instead, have restricted myself to just ten quotes out of the six-hour interview:

• During the Internet bubble, it was argued that because the internet is important, it must be profitable. That does not follow.
• The cultural impact of the Internet is far greater than the economic one. The important effect is on the middle classes in these half-developed countries. They don’t see themselves as part of their economy, but as part of the worldwide developed economy. This may be the next development: the emergence of psychologically global middle classes.
• The customer uses the Internet not to buy a car but to eliminate or reject. Now, when they come to the dealer, they know what they don’t want.
• Maybe on the Internet you need to be a buyer for your customer, not a seller.
• The computer is a moron. It can’t handle more than one logical system…..The human mind, on the other hand, can handle quite a few logical systems at the same time.
• There is a difference between a supplier that sees a quick buck and a supplier that sees a relationship. These things have not changed. Judgment, the computer cannot overcome.
• To me, management is a practice, and a practitioner needs a practice.
• You go ahead and do things. You don’t ask for permission because that implies the other fellow can say no. Yes, you risk ending up in jail. You have to take that risk.
• In fact, I don’t particularly like to read management. I read Shakespeare.
• What do you want to be remembered for? That I helped a few people accomplish my goals.

Somewhere within the seven pages of interview, Drucker sowed a number of very powerful seeds in my head. About what the internet really was. About the impact on the global middle class. About changes in marketing and in selling, about intention and recommendation. About relationships and judgment and empowerment and vulnerability and risk. About business. About life.

Thank you Peter Drucker.