the essential drucker
Post on 21-Oct-2014
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Insights from the all time great management guru Peter DruckerTRANSCRIPT
The Essential DruckerThirumeninathan Murugan
Who is Peter Drucker?• known as the- Father of Modern
Management• Important contributions – – MBO– Concept of Knowledge Worker– Marketing oriented organization
• Contributed regularly to – Harvard Business Review– The Economist– Wall Street Journal
• Fans and Followers include Jack Welsch (GE), Andy Grove (Intel)
(1909 - 2005) 25 honorary doctorates 39 books Presidential Medal of Freedom Presidential Citation, NYU\ 7 McKinsey Awards from HBR
Purpose of Business• Purpose of the business is to
satisfy the needs of its customers
• Some of the questions an organization need to ask frequently are – Who is our customer?– What should our business be?– Planned abandonment -“If we did
not do this already, would we go into it now?”
THE PURPOSE OF A BUSINESS IS TO CREATE A
CUSTOMER
THE BEST WAY TO PREDICT
THE FUTURE IS TO CREATE IT.
Role of Management• Everything that affects the
performance of the organization is a concern for the management and its responsibility.
• Traditional models perceive the role of management is internal which is a fallacy
On Marketing
• Market standing is important irrespective of increase in sales
• Market standing to aim for should be optimum and not maximum
• Technology and End-use are limitations. Customer value and customer decisions to dispose their disposable incomes should be the focus for management
THE AIM OF MARKETING IS TO
KNOW AND UNDERSTAND THE
CUSTOMER SO WELL THE PRODUCT OR SERVICE FITS HIM AND SELLS ITSELF.
5 bad habits of organizations
• Not Invented Here• Creaming a market• Quality as perceived by self• Illusion of a premium price• Maximize rather than optimize
UNTIL A BUSINESS RETURNS A PROFIT THAT IS GREATER
THAN ITS COST OF CAPITAL, IT DOES
NOT CREATE WEALTH — IT DESTROYS IT.
Effective Decision Making
Effective Decision Making
Nature of Problem – Generic or Exceptional
Solution should satisfy – boundary conditions
What is right as the starting point before
compromises and concessions
Build action items
Collect feedback from actual course of events
MAKING GOOD DECISIONS IS A CRUCIAL SKILL
AT EVERY LEVEL.
Organization as a human community
• One does not manage people. They should lead the people.
• Values are and should be the ultimate test..
• Knowledge workers are dependent on the organizations to make their work productive.
• Organizations also take over some of the aspects of a commune as knowledge workers interact, bond and flock together.
RANK DOES NOT CONFER
PRIVILEGE OR GIVE POWER.
IT IMPOSES RESPONSIBILITY.
Management by Objectives
SpecificMeasurableAchievableRealisticTimely• SMART goals should be derived
from corporate vision and should be set for individuals, teams and departments.
• Manage for Results
MANAGEMENT BY OBJECTIVE
WORKS - IF YOU KNOW THE
OBJECTIVES.
Corporate Vision
Mission Statement
Strategic Objectives
MANAGEMENT BY OBJECTIVE
WORKS - IF YOU KNOW THE
OBJECTIVES.
Jointly Plan Individually Act
Jointly control
Managers
Team Members
Management by Objectives
Effectiveness vs efficiency
• Processes and procedures typically help in increasing efficiency but only when the right things are done results are achieved.
EFFICIENCY IS DOING THINGS RIGHT; EFFECTIVENESS
IS DOING THE RIGHT THINGS.
Knowledge workers
• Knowledge workers own the tools of their trade.
• Knowledge society allows upward mobility.WHAT IS
MEASURED IMPROVES
Communications• Communication is perception• Communication is expectation• Communication makes demands• Communication and information
are different and mostly opposite – yet inter-dependent
• The onus of making himself/herself understood is on the specialist.
THE IMPORTANT THING IN
COMMUNICATION IS TO HEAR WHAT IS’NT BEING SAID