7 Business Lessons from Peter Drucker Every CEO Must Follow

by Chris Young

Several years ago, I picked up a revised edition of Management by Peter Drucker.  As I read through the chapters, I found myself nodding my head in agreement.

Some call Peter Drucker “the man who invented management.”  I agree.  I have come to realize that many of today’s best-selling authors, gurus, and the most successful CEOs and managers are “standing on the shoulders” of Drucker. 

Many of Drucker’s ideas are “common sense” today yet were way ahead of his time.

Following are 7 of Drucker’s principles that I believe are particularly important to focus on as a CEO and manager. 

1. Be mission-driven.

Ask most employees of companies – large and small – what their mission is and few can actually tell you.  Drucker believed it was important to align employee team members to focus on the mission.  Leaders need to communicate in a manner that encourages employee team members to know what they are trying to do.  He also argued that leaders need to know how to say, “no” to doing what is non-core to the business model.

2. Be effective – not efficient.

Efficiency is doing things right.  Effectiveness is doing the right things.  Too many are focused on being busy when they should be focused on being effective –doing the right things.   I am guilty of trying to get as many things done as possible.  I have come to realize that getting the right things done are far, far more important than everything.

3. To grow faster – put your best people on your best opportunities.

In other words, make sure you have the best people doing the right things.  Many ask, “What do I want to do?”  Instead, what needs to be asked is, “What needs to be done.”  Drucker understood the power of having the right people in the right positions in the company.

4. Focus on opportunities, not problems.

Most organizations focus their best talent on problems when they should be focused on opportunities.  Drucker said...  “An organization will have a high spirit of performance if it is consistently directed toward opportunity rather than toward problems. It will have the thrill of excitement, a sense of challenge, and the satisfaction of achievement if it's energies are put where the results are, and that means on the opportunities."  While many enjoy “putting out fires” – the proper focus is to focus on shaping the future rather than fixing the past.

5. Know the power of “planned abandonment”.

All-too-often businesses try to be / do everything when they need to focus on doing what they are really good at and abandoning everything else.  It is important to decide what not to do.  As the needs of your Customer evolve and the abilities of your talent, realignment becomes necessary.

6. Focus on the Customer.

Drucker said, “An organization begins to die the day it begins to run for the benefit of insiders and not the benefit of the outsiders.”  I have seen many successful business models that could be better serving their Customers, making more money, and being an even more meaningful place to work if they did not serve their self interests.  Recently, I observed a manager who was causing at least $10-20,000 a month in lost Customer revenues, yet management would do nothing about it because they were afraid to “rock the boat”. Unfortunately, this is happens all-too-frequently.

7. "What gets measured, gets managed."

Drucker understood that without measurement, the right things may not get done.  It is essential to understand and measure the key performance indicators that forecast future performance.  Smart companies have a "dashboard" that they share with employee team members to help focus on the right things.  We have found that TriMetrix® HD is the best source of measurement when it comes to aligning talent to tasks.

Take 15 minutes and rank yourself in the above seven areas.  Where are you strong?  Where could you improve?  Ask your team members.  Use this reflection and dialogue as an opportunity to improve your business.

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