The Birth of Business Innovation: "The Essential Drucker: Selections from the Management Works of Peter F. Drucker" Peter F. Drucker HarperCollins New York, NY 2001 349 pages, $30.00.

• Author: Holtzman, Henry
• Position: Required Reading

There are several reasons why Peter Drucker remains an unusual resource. First, in 1970 he correctly predicted the direction business would take for the remainder of the 20th Century. Second, he rose from a business reporter to become the foremost consultant to Fortune 500 companies. At the height of his career he consulted to half the industrializing nations on the planet.

Finally, just three of Drucker's many books--"The Effective Executive," "The Age of Discontinuity" and "Management: Tasks, Responsibilities, Practices"--are classic books for business. They were not only brilliantly conceived, but also they were written with a touch of genius. Not bad for a man whose native language wasn't English and who still speaks with a distinct Austrian accent.

Now 92 years old, Drucker provided hands-on direction to several editors for the compilation of "The Essential Drucker." Far more than a retrospective, this work strings together his books and feature articles to provide a core of the business practices he helped formulate for more than three-quarters of a century.

One example of both Drucker's writing style and sound advice was originally published in 1974. Too bad the process-driven people who founded most of the dot-com companies didn't keep this bit of advice in mind:

"Because its purpose is to create a customer, the business enterprise has two-and only these two-basic functions: marketing and innovations. For what consumerism demands of business is that it actually market. It demands that business start out with the needs, the realities, the values of the customers. It demands that business define its goal as the satisfaction of customer needs. It demands that business base its reward on its contribution to the customer."

By 1990, there was little doubt that innovation, spurred by the growth of personal computing, was moving ahead at a breakneck pace. To get the money to pay for developing innovation, business owners began to confuse actual customers with venture capital...