Lessons Learned from Peter Drucker
Peter Drucker was a leader in management philosophy and effectiveness. As a writer, management consultant, and social ecologist, he played an influential role in shaping key concepts around business, innovation, decision making, leadership, productivity, time management, and personal effectiveness. He first coined the term "knowledge worker" back in 1959, and helped pioneer knowledge work productivity.
I originally stumbled across Drucker while I was studying effective decision making techniques and I found that he was a wealth of insight in many other areas. Drucker had a crisp way of making his points and he challenged the status quo. I think what I liked most about Drucker was his ability to articulate things that you know to be true. While I never got to meet Drucker, I get to study his legacy in the form of several books and great quotes. This post is a walkthrough of the lessons I’ve learned as well as my favorite Drucker quotes.
Top 10 Lessons from Peter Drucker
These are my top 10 lessons from Peter Drucker:
- 3 answers for the second half of life. According to Drucker, there are 3 answers for the second half of life: 1) start a second career, 2) develop a parallel career, and 3) become a “social entrepreneur.” (See 3 Answers for the Second Half of Life)
- 3 kinds of innovation. According to Drucker, there are 3 kinds of innovation: 1) process, 2) product, and 3) market. (See Innovation Objectives.)
- Boundary conditions for effective decisions. Think of success in terms of a range or continuum of possibilities. Know the boundary conditions for your important decisions. Know what good looks like. Know the minimum the decision needs to satisfy. Don’t depend on everything going as planned. Know when you need to abandon a decision. If the decision is a failure from the start, don’t go down that path. (See Boundary Conditions for Effective Decisions.)
- Consolidate your discretionary time. Figure out how much discretionary time you have. Consolidate your operating work for Mondays and Fridays. Use your power hours on Tuesdays, Wednesdays, and Thursdays for your high priority work. Work from home one day a week. (See Consolidate Your Discretionary Time.)
- First know what’s right. First know what’s right for effective decision making. To make the right compromise, first know what right is. Don’t worry whether it’s liked, worry whether it’s right. After you know what’s right, then you can compromise. (See First Know What’s Right for Effective Decision Making.)
- How much profit do you really need to make? Know the minimum profitability you need to survive. Know the minimum might be higher than you expected. Plan for minimum profitability over profit maximization. (See How Much Profitability Do You Need?.)
- Know thy time. Time is the scarcest resource. You can’t make more time. You have what you got. Make the most of it. Log and analyze your time. Consider keeping lits of deadlines for urgent and unpleasant tasks. Effective people make it a habit to work at improving their time management. (See Know Thy Time.)
- Opinions over facts for effective decision making. Know that decisions are judgments. Start with opinions over facts. Know the criteria of what’s relevant. Test your opinions against reality. (See Opinions Over Facts for Effective Decision Making.)
- What is the relevant decision making criteria. Know what to measure. Whatever you measure isn’t the answer. It’s about judgment. Finding the right measurements is risk-taking judgment. Insist on having alternatives to choose from. (See What is the Relevant Decision Making Criteria.)
- What our business is, will be, and should be. Don’t spend your energy defending yesterday. Instead, spend your energy exploiting today and the future. (See What Our Business Is, Will Be, and Should Be.)
Peter Drucker Lessons Learned
In addition to my top 10 lessons, I’ve learned several other key lessons from Drucker. I regularly draw from Drucker for advice when it comes to thinking about time management or how to make better decisions or how to think about business impact. I think Drucker also helped pave the way for thinking about employee engagement and employee empowerment.
Photo by laffy4k.
Here are some more of my lessons from Peter Drucker.
- 4 major time-wasters caused by management deficiency. There are 4 main signs of management deficiency: 1) lack of system foresight 2) overstaffing 3) malorganization, and 4) malfunction in information (See 4 Major Time-Wasters Caused by Management Deficiency.)
- 4 Types of Problems. Know the four types of problems: 1) truly generic, 2) truly unique, 3) generic, but unique for the situation, and 4) new generic problem. (See 4 Types of Problems.)
- 5 bad entrepreneurial habits. The 5 bad entrepreneurial habits are: 1) Not invented here 2) Creaming 3) Quality 4) Premium price 5) Maximize rather than optimize. (See 5 Bad Entrepreneurial Habits.)
- Decentralization and simplification. Companies work best when they are decentralized.
- Develop disagreement rather than consensus. Don’t make a decision unless there’s disagreement. Disagreement provides alternatives, stimulates the imagination, and helps you break out of preconceived notions. Understand the alternatives. Know why people disagree. Know both sides of the issues. (See Develop Disagreement Rather Than Consensus.)
- Effectiveness over universal expert. You can’t be an expert in all things. You can round out your knowledge and get the basics, while still specializing in a few areas. (See Effectiveness Over Universal Expert.)
- Employees are assets. Employees are assets not liabilities.
- Focus on the customer. The primary function of a business is to serve the customer and the primary goal of your business is to create customers.
- Half a loaf over half a baby. Half a loaf is better than no bread. Half a baby is worse than none. (See Half a Loaf Over Half a Baby.)
- Innovation Objectives. Innovation is how you grow your business. The key challenge with innovation objectives is measuring relative impact and importance. (See Innovation Objectives.)
- Know where your time goes. To manage your time, you need to know where it goes. The only way to know where you spend your time is to log it. Your memory tells you that you spend time where you think you should spend your time, but it’s wrong. (See Know Where Your Time Goes.)
- Manage by objectives. Set the goals and get out of the way. Help unblock people, enable and empower people to reach the goals. Avoid the how trap.
- Non-profits provide fulfillment. When you can’t find fulfillment at work, you might find it by volunteering for a non-profit.
- Planned abandonment. Plan an ending. Determine how long the commitment will be for, and create some boundaries around it. If you won’t have enough time to finish it, don’t take it on. Build in a review mechanism so you can determine whether to continue or change course or stop. When you stop something, you make room for something else.
- Productivity objectives. Results are the best way to compare effectiveness. Quality of management is a key differentiator. Focus on continuous productivity improvement. (See Productivity Objectives.)
- Resource objectives. Your business needs to attract land, labor and capital. Your jobs have to satisfy the business and the people in the market. The first sign of decline is loss of attraction to qualified, ambitious people. Design jobs to attract and retain the kind of people you want. (See Resource Objectives.)
- Service to others. Business should contribute to society and to the greater good.
- Social responsibility objectives. Bake social objectives into your strategy. Society and the economy need to believe that your business serves a necessary, useful and productive job. Think through your social and economic impact and responsibilities. (See Social Responsibilities Objectives.)
Peter Drucker Quotes
It’s not just what he said, but how he said it. Drucker had a way of nailing key concepts with precision. His one-liners pack a lot of wisdom and insight into a bite-sized nugget, that’s easy to share. Here are some of my favorite quotes:
Photo by cote.
- Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information.
- Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.
- Effective leadership is not about making speeches or being liked; leadership is defined by results not attributes.
- Efficiency is doing things right; effectiveness is doing the right things.
- Follow effective action with quiet reflection. From the quiet reflection will come even more effective action.
- Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.
- Knowledge has to be improved, challenged, and increased constantly, or it vanishes.
- Making good decisions is a crucial skill at every level.
- Management by objective works – if you know the objectives. Ninety percent of the time you don’t.
- Management is doing things right; leadership is doing the right things.
- Most of what we call management consists of making it difficult for people to get their work done.
- My greatest strength as a consultant is to be ignorant and ask a few questions.
- No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.
- People who don’t take risks generally make about two big mistakes a year. People who do take risks generally make about two big mistakes a year.
- Plans are only good intentions unless they immediately degenerate into hard work.
- Rank does not confer privilege or give power. It imposes responsibility.
- The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.
- The best way to predict the future is to create it.
- The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.
- The most efficient way to produce anything is to bring together under one management as many as possible of the activities needed to turn out the product.
- The most important thing in communication is hearing what isn’t said.
- The only thing we know about the future is that it will be different.
- The productivity of work is not the responsibility of the worker but of the manager.
- The purpose of a business is to create a customer.
- There is nothing so useless as doing efficiently that which should not be done at all.
- Time is the scarcest resource and unless it is managed nothing else can be managed.
- Today knowledge has power. It controls access to opportunity and advancement.
- Unless commitment is made, there are only promises and hopes… but no plans.
- We now accept the fact that learning is a lifelong process of keeping abreast of change. And the most pressing task is to teach people how to learn.
As you can see, Drucker paved a path for effectiveness and you can apply his insights and perspectives to work and life.