Everything you need to know about management you can still learn from reading Drucker. What would he think of your business?
Almost every day the UPS truck rolls into my driveway. Through the window, I spy a brown blur; then hear the screen door open and close. Rising from my desk, I go to collect a fresh infusion of business books.
Because I handle Skimmer’s Guide for Inc., I give at least the quick once-over to well over 100 titles a year. Often I will read a chapter or two. Books I write about--and some I wish I had space to write about--have me cover-to-cover. I’ve assembled my own best-of library with favorites like Adrian Slywotzky, Robert Sutton, Michael May, Bo Burlingham, Ram Charan, and Michael Mauboussin (and, of course, Porter, Bennis, Collins, and the rest of the boys in the band).
But if there was a fire and I could save just one business book (because business books would naturally be front of mind in that situation), I would emerge from the flames waving Peter Drucker’s The Effective Executive. And if I could manage an armload I’d bring out the rest of Drucker’s oeuvre. That’s because almost everything that anyone has observed about modern management in the past 30 years Drucker observed first, with elegance and clarity. All the conventional wisdom about leading employees and serving customers and managing complexity was fresh when Drucker propounded it more than half a century ago. It became cliché through constant repetition because it was obviously correct and everybody knew it.
But as Drucker reminds us in Management Challenges for the 21st Century, it is important to challenge assumptions. So I wondered, recently, whether any of Drucker’s ideas were no longer true--or were less true than when he wrote about them. I posed this question in an email to Rick Wartzman, executive director of The Drucker Institute at Claremont Graduate University. Rick was intrigued, and we ended up hashing over the question on the phone.
Casting about for weaknesses, Rick brought up management by objective, an exercise in participative goal setting that Drucker laid out in The Practice of Management (1954). Thirty years later, the phrase got a bad rep when organizations distorted it to mean “ramming objectives down from on high,” said Wartzman. (So, clearly not Drucker’s fault.) He also recalled a few instances in which Drucker deemed his own past judgments misguided. For example, Drucker decided that he had come down too heavily on the side of intrinsic factors when analyzing what motivates people. And he backed off his projection that factory employees working together would develop a sense of community and citizenship. (Of course “community” later became the watchword of most moderately progressive organizations. So Drucker was really only wrong about the factory part.)
Mostly, we talked about the evergreen-ness of a book like The Effective Executive, which in1967 advised blocking out uncluttered time in which to think, identifying tasks not to do, and developing other habits that only became more urgent as the deluge of information laid waste to our time. And we agreed that when people talk about reinventing management, what they really mean is reinvesting in Drucker. “Obviously I have a partisan lens,” said Rick. “But I’m always struck by how timeless his principles are.”
Toward the end of our conversation, I asked Rick which companies exemplify Drucker’s management ideals. He cited Herman Miller, Procter & Gamble and FedEx, among others. Sometimes Rick says, he’ll run across an organization that practices Peter and isn’t even aware of it (such was the case with Costco). Curious whether any of Inc.’s readers unknowingly fit the bill, I asked Rick if he would create a checklist against which companies could measure themselves. He generously agreed to do so.
Here is the list Rick sent me. (All quotes are from Drucker.) Whether you regard it as validation or aspiration, I hope you find it useful.
You have a Drucker-like company if you:
Have a strong mission and a cogent answer to the deceptively difficult question, “What business are we in?”
Always remember that “there is only one valid definition of business purpose: to create a customer” while accepting that “quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.”
Push responsibility and accountability as far down into the organization as possible and follow this basic communications strategy: Listen down, talk up.
Embrace the fact that every organization develops people--“it either helps them grow or it stunts them”--and so you do everything you can to help them grow.
See innovation--that is, “change that creates a new dimension of performance”--as the responsibility of everyone in the enterprise, not just the R&D staff.
Regularly abandon things--products, policies, practices--that are no longer effective or are consuming an inordinate amount of resources when weighed against tomorrow’s opportunities.
Measure what can be measured and monitor what can’t, recognizing that good intentions are no substitute for performance and results.
Keep an eye on the long term--and not just the short term--while being mindful that, while “securities analysts believe that companies make money, companies make shoes.”
Live by a core set of values, animated by the belief that an organization needs values “as a human body needs vitamins and minerals.”
Demonstrate social responsibility not simply by having a CSR department or donating to charity but by understanding that an organization is responsible for “whomever and whatever it touches.”