Why Peter Drucker’s Work Continues to Prosper and Shape Business Today

Peter Drucker’s management and business strategies have spawned a countless number of books and management techniques throughout the decades. From GE’s Jack Welch to Jim Collins, author of the bestselling book on business performance Good to Great, Drucker’s legacy continues to live on in ways unimaginable. Without the contribution of Peter Drucker to society, the United States may not have been the superpower it is today. Here are the primary reasons Drucker’s work is still relevant today and in the future.

· Actionable. Peter Drucker does not just write about theory and what could and should work, all his knowledge is from observing how executives and CEO’s continue to be effective. In the 1930’s, Drucker observed the operations of General Motors under Alfred Sloan, one of the greatest companies of its time prospering at an exponential rate. Peter Drucker observed effective behavior and organization strategy; whether it worked or failed. Breaking large scale events into smaller effective actions prove that not only does his work help successful corporations in the past move forward; it also helps corporations today look to the past in order to become successful.

· Universal. Whether you are a profit corporation or a non-profit organization, Drucker’s principles apply anywhere. Running a business of twenty directs or managing a corporation with over tens of thousands does not matter, there is no “financial business method”, “services method” or “construction method”. One of Peter Drucker’s core practices “Management by Objectives” is used from the Girl Scouts of U.S.A all the way to IBM and Proctor and Gamble and is applicable from an entrepreneur to a CEO. Having a model that can work anywhere shows that a core foundation can be built in any sector of society.

· Adaptable. Today there are hundreds of thousands of business books on the market today. Leadership, marketing, entrepreneurship, sales, performance, people development and time-management books are all sub-categories which have thousands of books under each topic. When Peter Drucker began his writing, there were barely any of these books. His publisher at the time did not even want to market his work as there was no proving ground on the sustainability of a business book. With his book The Concept of the Corporation launching in 1930’s a new branch of books was born. The majority of the bestselling business books today all have Peter Drucker references in it, expanded and revised for the audience of today. This adaptability of Drucker’s core principles helps shape business in the 1900’s, the 2000’s and most likely the 3000’s.

Effective actions that can be applied to any organization and adapted to suit the needs of the business help continue to build on Peter Drucker’s work and inspire and elevate business performance. The application of his knowledge today not only continues to build on organization performance, but on morale of the people and the society around the organization. General Electric and P&G are examples of organizations that are over 100 years old, and with the application of Drucker’s work, any organization can achieve that high of a status.

Jorrian Gelink

Management Architect

http://www.jorrian.com

The Knowledge Society – The Education Needed for the Future

Every day, ideas float through our heads and go in many different directions. Some stay, some go, some get put to paper, other ideas are discussed and some are shut down. Products are built, services are created, people are motivated and countries begin to develop their economy in a new way, not just based on farming and manufacturing, but by turning people’s ideas into reality. Peter Drucker was describing these changes in his books in the 1930’s when Research and Development departments were just blossoming in organizations. This new age which we live in today is the Knowledge Society.

Compare the difference between Ford in the 1900’s and the Ford of today. This American Car company’s Model T built in 1908 did not have the robotic machines to build it as we do our cars today. This $550 automobile (the price in 1913) was built entirely by factory workers. A typical work day was to wake up early, head to the factory, and work on one part of this machine on the assembly line. Perhaps you were the one that put the doors on the sides of the car. Over and over again you would completely this task and then go home, and leave the ideas to the executives up above. Repeat cycle for perhaps years to support your family and live your life.

The Ford of today is different. There are accounting, marketing, R&D, sales, services and manufacturing departments. Most working for Ford don’t even touch a vehicle, they sit in laboratories or conference rooms testing new parts or drawing up new prototypes. Machines build machines; that door someone would attach to a car in the 1940’s is now being attached via robotic arm faster. Executives are no longer stationed in the factories looking towards the workers; they are in offices coordinating all their knowledge into an end product. Instead of waking up and heading to work to build physical product, now individuals are heading to work to build and execute ideas.

Not only is it important to be educated in generating ideas, it is even more so important to train yourself in perception and analysis. When German engineer George Mestral was on an outdoor trip in the 1940’s, he noticed that some thistles were attached to his clothes and dog fur. His curiosity peaked and with some research he found out these thistles had hooks that effectively attached to clothing, fur and hair. After developing that concept from nature into a product, Velcro was created and is regarded as one of the most important inventions of the century.

The societies we live in today require different challenges in regards to our education. It is not enough to just specialize in one segment such as marketing if you do not have some background on manufacturing. Focusing learning more about sales as a sales executive will only get you so far, but if you do not understand what the marketing department is doing you will become ineffective. Understanding and broadening your scope to different cultures, technologies and history will help increase the effectiveness of the ideas you generate and put into action.

Jorrian Gelink

Management Architect

http://www.jorrian.com

Management By “Drive”

“There may be companies in which management people do not say: “The only way we ever get anything done around here is by making a drive on it.” Yet, “management by drive” is the rule rather than the exception.” – The Practice of Management, Peter Drucker. 1954.

Every organization needs objectives in place in order to move forward. Whether the organization is successful or not depends on the objectives; however, trying to run a business or a non-profit without objectives is a futile effort. Every business enterprise requires a team of individuals, and because every individual is different, the objectives are what unites everyone toward a common goal. Effective management requires a strong focus and deliverance on key objectives; otherwise the business can become mismanaged through crisis and drives.

Managers who continuously focus on the “now” and the “emergency” result in being ineffective. The perception is that focusing and putting all energy into a “crisis” which happens every week or every month is effective behavior, as a ton of actionables and resources are committed to the cause; unfortunately, everyone starts to lose the main direction of what the organization wants from them. The more crises and “fires” occur, the more the management team trails off the path that has been set to be successful. Teams begin to get burned out and confused, managers continue to believe that dealing with “drives” is the right thing to do and executives begin to get frustrated on why their plans are not being executed. A downward spiral for all those involved in any organization.

As an executive or manager you may believe, “I currently manage this way and it is helpful for my team; when an even bigger event or emergency hits, my team is the one that will be ready for it.”

If I am weight training and bench pressing 100 lbs every day, won’t I be ready to handle and lift 120 lbs in an emergency? If I can run as hard as I can and not run out of breath for 5 minutes, can’t I push myself to 6 minutes if need be? Yes, you probably can. The difference is in an organization it is the effectiveness of each individual collectively as a team that counts. Eventually a member of a team starts to lose sight of the company’s objectives and does either two things:

1. The employee neglects their primary responsibility and joins in on the drive
2. The employee sabotages the drive collectively and gets their own work done

Both result in ineffective work being done. The entire plant will look busy, everyone in the factory will be working hard, all those in the offices will be chatting up a storm to work on the “current initiative”, the managers and executives will work extra hours to make sure that “this unexpected deliverable” is met.

That organization will be working efficiently, but not effectively. The company does not know how to direct and guide their managers, and in effect it misdirects them.

Jorrian Gelink

Management Architect

http://www.jorrian.com

Focusing on the Customer Experience

From 2002 – 2006, new cell phones were the must-have commodity. Hardware manufacturers kept churning out better and faster models, when Motorola upped Nokia, Nokia had to fight back. The Sony Ericsson was released as a phone with superior features and functionality changing the landscape. Motorola releases one of their best selling phones in a decade: Motorola RAZR. This phone was smaller, had a better camera and had technology crammed into it. Research-in-Motion is focused on businesses releasing multiple models of Blackberry phones. The wireless companies such as Verizon and AT&T were also innovating and coming up with more options and features for these multimedia –driven phones.

Then in 2007, Apple, a company known for developing easy-to-use computers and software released the iPhone.

Steve Jobs walks on stage to begin the Apple Keynote presentation. Is he going to start ranting and raving about how high end the processor was in this phone? Or the materials used to construct the shell? Maybe he’ll goes over how it has a better camera than its competitors.

Steve doesn’t do any of the above; he demonstrates how to operate the phone.

The audience watches in amazement on how easy to use the large multi-touch screen is. They gasp as the phone is tilted sideways and the photo they were looking at also turns sideways. They clap at how easily accessible the new Visual Voicemail is and give a standing ovation on not only how advanced the phone is, but much enjoyable and easier to use than every other phone in the market.

In the end of 2009, Apple’s iPhone gained 10% worldwide market share in the cell phone market. From 0% in 2007 to 10% in 2009 from a company that’s core is not building cell phones, but creating an experience.

Looking at your company’s mission, there should be an underlying message regarding the customer’s experience. Any business without customers is just a hobby. Apple’s mission is to build the best personal computing experience. Disney’s mission statement is to “make people happy”. Toyota’s is to be “the most satisfying ownership experience in America”. These three have different customers, but they all make sure to communicate what their mission is through the development of their products or services.

The next time your organization presents a product or service, think of the experience it will create and how it will help your customer live in a better world today.

Jorrian Gelink

Management Architect

http://www.jorrian.com