The IBM 360 Model 75 computer at the Rutherford Laboratory, 1967

Peter F. Drucker, “The Manager and the Moron,” McKinsey Quarterly, December 1967

One of the most potentially earthshaking forces in our economy is the technology of information. I don’t mean simply the computer. The computer is to information what the electric power station is to electricity. The power station makes many other things possible, but it’s not where the money is. The money is in the gimmicks and gizmos, the appliances, the motors and facilities made possible and necessary by electricity, that didn’t exist before.

Information, like electricity, is energy. Just as electrical energy is energy for mechanical tasks, information is energy for mental tasks. The computer is the central power station, but there are also the electronic transmission facilities—the satellites and related devices. We have devices to translate the energy, to convert the information. We have the display capacity of the television tube, the capability to translate arithmetic into geometry, to convert from binary numbers into curves. We can go from computer core to memory display, and from either one into hard copy. All the pieces of the information system are here. Technically there is no reason why Sears, Roebuck could not offer tomorrow, for the price of a television set, a plug-in appliance that would put us in direct contact with all the information needed for schoolwork from kindergarten through college.

Already the time-sharing principle has begun to take hold. I don’t think it takes too much imagination to see that a typical large company is about as likely to have its own computer 20 years hence as it is to have its own steam-generating plant today. It is reasonably predictable that computers will become a common carrier, a public utility, and that only organizations with quite extraordinary needs will have their own. Steel mills today have their own generators because they need such an enormous amount of power. Twenty years hence, an institution that’s the equivalent of a steel mill in terms of mental work—MIT, for example—might well have its own computer. But I think most other universities, for most purposes, will simply plug into time-sharing systems….

The impact of information, however, should be greater than that of electricity, for a very simple reason. Before electricity, we had power; we had energy. It was very expensive and rather scarce, but we had it. Before now, however, we have not had information. Information has been unbelievably expensive, almost totally unreliable, and always so late that it was of little, if any, value. Most of us who had to work with information in the past, therefore, knew we had to invent our own. One developed, if one had any sense, a reasonably good instinct for what invention was plausible and likely to fly, and what wasn’t. But real information just wasn’t to be had. Now, for the first time, it’s beginning to be available—and the overall impact on society is bound to be very great.

Without attempting to predict the precise nature and timing of this impact, I think we can safely make a few assumptions.

Assumption No. 1: Within the next ten years, information will become very much cheaper. An hour of computer time today costs several hundred dollars at a minimum; I have seen figures that put the cost at about a dollar an hour in 1973 or so. Maybe it won’t come down that steeply, but come down it will.

Assumption No. 2: The present imbalance between the capacity to compute and store information and the capacity to use it will be remedied. We will spend more and more money on producing the things that make a computer usable—the software, the programs, the terminals, and so on. The customers aren’t going to be content just to have the computer sitting there.

Assumption No. 3: The kindergarten stage is over. We’re past the time when everybody was terribly impressed by the computer’s ability to do two plus two in fractions of a nanosecond. We’re also past the stage of trying to find work for the computer by putting all the unimportant things on it—using it as a very expensive clerk. Actually, nobody has yet saved a penny that way, as far as I can tell. Clerical work—unless it’s a tremendous job, such as addressing 7 million copies of Life magazine every week—is not really done very cheaply on the computer. But then, kindergartens are never cheap.

Now we can begin to use the computer for the things it should be used for—information, control of manufacturing processes, control of inventory, shipments, and deliveries. I’m not saying we shouldn’t be using the computer for payrolls, but that’s beside the point. If payrolls were all it could do, we wouldn’t be interested in it.

Managing the moron

We are beginning to realize that the computer makes no decisions; it only carries out orders. It’s a total moron, and therein lies its strength. It forces us to think, to set the criteria. The stupider the tool, the brighter the master has to be—and this is the dumbest tool we have ever had. All it can do is say either zero or one, but it can do that awfully fast. It doesn’t get tired and it doesn’t charge overtime. It extends our capacity more than any tool we have had for a long time, because of all the really unskilled jobs it can do. By taking over these jobs, it allows us—in fact, it compels us—to think through what we are doing.

But though it can’t make decisions, the computer will—if we use it intelligently—increase the availability of information. And that will radically change the organization structure of business—of all institutions, in fact. Up to now we have been organizing, not according to the logic of the work to be done, but according to the absence of information. Whole organization levels have existed simply to provide standby transmission facilities for the breakdowns in information flow that one could always take for granted. Now these redundancies are no longer needed. We mustn’t allow organizational structure to be made more complicated by the computer. If the computer doesn’t enable us to simplify our organizations, it’s being abused.

Along with vastly increasing the availability of information, the computer will reduce the sheer volume of data that managers have had to cope with. At present the computer is the greatest possible obstacle to management information, because everybody has been using it to produce tons of paper. Now, psychology tells us that the one sure way to shut off all perception is to flood the senses with stimuli. That’s why the manager with reams of computer output on his desk is hopelessly uninformed. That’s why it’s so important to exploit the computer’s ability to give us only the information we want—nothing else. The question we must ask is not, “How many figures can I get?” but “What figures do I need? In what form? When and how?” We must refuse to look at anything else. We no longer have to take figures that mean nothing to us and read them the way a gypsy reads tea leaves.

Instead, we must decide on our information needs and how the computer can fill those needs. To do that, we must understand our operating processes, and the principles behind the processes. We must apply knowledge and analysis to them, and convert them to a clerk’s routine. Even a work of genius, thought through and systematized, becomes a routine. Once it has been created, a shipping clerk can do it—or a computer can do it. So, once we have achieved real understanding of what we are doing, we can define our needs and program the computer to fill them.