As a thought leader, many consider Peter Drucker to lead the field. He was known as “the management guru’s management guru.” Born in Vienna in 1909, he moved to England and held his first job in a Bradford wool company. He wrote with a quill pen in a brass-bound ledger that was chained to a desk. How things have changed.
Drucker’s Five Principles
He immigrated to the USA, wrote his first book, and became a consultant to General Motors which was the world’s largest corporation. He went on to study Sears Roebuck, IBM and General Electric before producing his “Concept of the Corporation.” Drucker concluded that successful business is founded on six principles of management:
- Setting appropriate objectives.
- Organizing to achieve those objectives.
- Motivating others to perform well enough to achieve the objectives.
- Communicating so everyone stays involved in performing well.
- Measuring performance levels and their results.
- Developing people so they can perform to the appropriate level.
Drucker believed that success is, therefore, founded on a company knowing what business it is in, ensuring it has the competencies to perform, and focusing those competencies on agreed and appropriate goals.
Managers must organize resources to achieve the right performance levels. This demands that they set the right objectives, communicate them and then measure performance and results.
He listed eight areas where clear objectives are essential. When objectives are clear, people can perform their tasks in the right context, and shortfalls – both of performance and the original objectives – will become obvious. Those eight areas are:
- Financial resources
- Physical resources
- Organizing personnel
- Social responsibility
Managers, therefore, must identify business objectives, set goals within each objective, clarify processes and resources needed to hit the targets and meet the goals. Managers then communicate well with the people who are tasked with performing successfully. This demands that managers organize resources (human and otherwise) and then control them.
This assumes that teamwork, motivation and other principles (Action Centered Leadership, Hierarchy of Needs, etc) are intrinsic elements, and not just good ideas that are valuable in their own right.
Drucker considered that business organization is, therefore a human, social and moral phenomenon. Customer service is paramount, and should dominate management thinking because customer actions determine turnover and profit.
In the end it all comes down to people. People who feel and know they are valued, as well as valuable. People who own their own behaviors, and who want to contribute to the greater good, will make best use of resources and will perform better. That greater good is customer service; both for external and internal customers.
Today’s technology enables and encourages managers to meet their responsibilities more easily and more effectively than in the days when Drucker established his principles. We know it all comes down to people, and we have the right systems that enable our clients to recruit the people who are right for them. Please click here to contact us so we can achieve our objectives of helping you achieve your objectives.