Peter F. Drucker

Larry Sayler

LifeBorn in Vienna in 1909Educated in Austria and EnglandDoctorate in Law in GermanyCame to the US in 1937Taught and Consulted

Bennington College New York University Claremont Graduate School (Since 1971)

The Practice of Management

Peter Drucker

1954

The Practice of Management 1954 The first true management book Depicts management as a distinct function Management has distinct responsibilities

Three Roles of ManagementManaging a BusinessManaging ManagersManaging Workers and Work

Managing a Business

Managing a Business Purpose of Business

To Create Customers

Functions of Business Marketing Innovation

Profit is result, not a cause, of business activity

“What is Our Business?”Who is the Customer?What does the Customer Buy?What is the Value to the Customer?What will our Business Be?What SHOULD our Business Be?

Business Performance Objectives

Market Share Innovation Productivity Physical and Financial Resources Profitability

Manager Performance and Development Worker Performance and Attitude Public Responsibility

Principles of ProductionThree Systems of Production

Unique Product Production Mass Production

Old style New style

Process Production

Managing Managers

Three Stonecutters

“I am earning a living” “I am being the best stonecutter I can

be” “I am creating a cathedral”

Misdirection by the Boss

Sometimes Management Directions are Not Clear

Henry II King of England

Thomas Beckett Archbishop of Canterbury

Mid 1100s Sack cloth and ashes

Management by Objectives(MBO)

Prepared by Employee

(In Consultation with His/Her Manager)

Includes Objectives and Measurement

Standards

Facilitates “Management by Self Control”

Other TopicsSpan of Managerial ResponsibilityThe Manager and his SuperiorThe Spirit of an Organization

Appraisals, Compensation, Promotions

CEO and the BoardDeveloping Managers

Managing Workers and Work

Managing Workers and Work

Personnel ManagementTaylor, Fayol, Gilbreth

Organizing for Peak PerformanceEngineering the Job

Motivating for Peak PerformanceCommunication; Vision

Supervisor / ForemanProfessional Employee

Summary and Conclusions

The Work of the ManagerSet ObjectivesOrganizeMotivate and CommunicateMeasurementDevelop People

5 Steps in Making DecisionsDefine the ProblemAnalyze the ProblemDevelop Alternative SolutionsFind the Best Solution Implement the Decision

The Manager of Tomorrow1. Must manage by objectives2. Must take more risks and have a longer

time frame3. Must be able to make strategic decisions4. Must be able to build an integrated team5. Must be able to communicate fast and

clear6. Must see the business as whole7. Must relate to total environment

Responsibilities of MgmtOperate at a Profit and Grow

Social Impact “Our Lord’s Parables of the Talents

Management as a Leading Group

The Effective Executive

Peter Drucker

1966

Two major assumptions

The executive’s job is to be effective

Effectiveness can be learned

Three interesting quotes There are few things less pleasing to the Lord,

and less productive, than an engineering department that rapidly turns out beautiful blueprints for the wrong product. (p. 4)

People decisions are time consuming, for the simple reason that the Lord did not create people as “resources” for organization. (p. 33)

There is little danger that anyone will compare this essay on training oneself to be an effective executive with, Kierkegaard’s great self-develop-ment tract, Training in Christianity. (p. 169)

Executives tend to have high levels ofIntelligenceImaginationKnowledge

But often lackEffectiveness

Intelligence, Imagination, and Knowledge are essential

But only Effectiveness converts them to Results

An Executive is To Execute

EFFECTIVE EXECUTIVES

EFFECTIVE EXECUTIVES Executive and Manager are not synonymous

An executive is those knowledge workers, individual professionals, and managers who are expected by virtue of their position or their knowledge to make decisions in the normal course of their work that have significant impact on the performance and results of the whole.

EFFECTIVE EXECUTIVES Effective executives have certain practices in

common that make them effective. In other words, effectiveness is a set of

practices; a habit Practices can be learned. Therefore, effectiveness can be learned As with all practices (such as playing the

piano) anyone with normal aptitudes may become competent. Mastery may elude a person, but with effectiveness, what is needed is simply competence.

EFFECTIVE EXECUTIVES There are 5 practices/habits that have to be

acquired to be an effective executive –

Time allocation Focus on outward contribution Build on strengths, own and others Establish Priorities

Concentrate on a few major areas where superior performance will produce outstanding results

Make effective decision Effective decision making is a system – a series of

correct steps in the correct sequence

TIME Output is limited by the scarcest resource Time is the limiting factor, the most scarce

resource Can always acquire more money or people But one cannot obtain more time

The Supply of Time is totally inelastic No matter how high the price, the supply cannot

increase

TIME Three Step Process

Record Time Manage Time (Prune the time wasters) Consolidate Time

TIME WASTERS Identify time wasters which follow from lack of

system or foresight Recurring crisis

Time waste often results from overstaffing Another common time waster is mal-

organization. Its symptom is an excess of meetings People can either meet or work, but they cannot do

both at the same time Meetings should never be allowed to become the

main demand on an executive’s time Another major time waster is malfunction in

information

TIMEThree Step Process

Record TimeManage Time (Prune the time

wasters)Consolidate Time

OUTWARD CONTRIBUTION

Key Question -

“What do you do that justifies being on the payroll

Answer must be outward focused, not inward

BUILD ON STRENGTHSPromote people based on what they

can do

Make staffing decisions to maximize strengths, not minimize weaknesses

BUILD ON STRENGTHS Four rules for staffing based on strengths

Don’t make jobs impossible Do make jobs demanding and big Know employee’s strengths Know that to get strengths, one must put up

with weaknesses Logical consequence - It is the duty of the

executive to remove ruthlessly anyone who consistently fails to perform with high distinction.

BUILD ON STRENGTHSEffective executive must also maximize

his/her own strengths

Must ask oneself, “What are the things that I seem to be able to do with relative ease, while they come rather hard to other people?”

PRIORITIZESloughing off Yesterday

Continuously ask, “If we did not already do this, would we go into it now.”

Priorities and Posteriorities Priorities - Decide what you will do Posteriorities - Decide what you will not do

PRIORITIZERules for identifying priorities

Pick the future instead of the past Focus on opportunity rather than problems Choose your own direction, rather than

climb on the bandwagon Aim high for something that will make a

difference rather than for something that is safe and easy to do

EFFECTIVE DECISIONSTo make decisions is the specific

executive task

Effective executives do not make many decisions. They concentrate on the important ones

EFFECTIVE DECISIONS Elements of the Decision Making Process

Is this a generic situation, or a special situation?

What must the solution accomplish? Build into the decision the action to carry it

out Determine feedback which tests the actual

results against the desired results

EFFECTIVE DECISIONSThe effective executive does NOT start

with the facts, but with opinionsThe effective executive encourages

differences of opinionsDon’t foster consensus, but

dissension

EFFECTIVE DECISIONS

“Executives are not paid

for doing things they like to do.

They are paid for getting

the right things done -

most of all in their specific task,

the making of effective decisions.”

Managing theNon Profit Organization

Peter Drucker

1990

I. The MissionDevelopment of the Mission

The mission is forever and may be divinely ordained; the goals are temporary

Leadership is a Foul-Weather Job

Interview - Exec. Director of Girl Scouts Setting New Goals

I. The Mission Interview - Max De Pree, chairman of

Herman Miller and Hope College Leadership

Action Implications Never start with tomorrow to reach eternity Think long range, then figure out today

II. From Mission to Performance Converting Good Intentions into Results

Need Plan, Marketing, People, Money Winning Strategies

“Pray for Miracles; Work for Results” How to Innovate Common Mistakes

Interview – Prof. at Northwestern Defining the Market

Interview – CEO, American Heart Assoc. Building Donor Constituency

Action Implications

III. Managing for Performance

What is the Bottom Line?Basic Do’s and Don’t’sEffective Decisions Interview – President of American

Federation of Teachers How to Make Schools Accountable

Action Implications

IV. People and RelationshipsPeople DecisionsKey Relationships Interview – Vicar for Social Ministry

From Volunteers to Unpaid Staff Interview – President of Fuller

Theological Seminary The Effective Board

Action Implications

V. Developing YourselfAs a Person, as an Executive, as a Leader

You Are Responsible What do You Want to be Remembered For Interview – Founder of 2 NFPOs

Non-Profits: The Second Career

Interview – VP of Hospital Chain The Woman Executive

Action Implications