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  1. 1. Peter F. Drucker Larry Sayler
  2. 2. Life <ul><li>Born in Vienna in 1909 </li></ul><ul><li>Educated in Austria and England </li></ul><ul><li>Doctorate in Law in Germany </li></ul><ul><li>Came to the US in 1937 </li></ul><ul><li>Taught and Consulted </li></ul><ul><ul><li>Bennington College </li></ul></ul><ul><ul><li>New York University </li></ul></ul><ul><ul><li>Claremont Graduate School (Since 1971) </li></ul></ul>
  3. 3. The Practice of Management Peter Drucker 1954
  4. 4. The Practice of Management <ul><li>1954 </li></ul><ul><li>The first true management book </li></ul><ul><li>Depicts management as a distinct function </li></ul><ul><li>Management has distinct responsibilities </li></ul>
  5. 5. Three Roles of Management <ul><li>Managing a Business </li></ul><ul><li>Managing Managers </li></ul><ul><li>Managing Workers and Work </li></ul>
  6. 6. Managing a Business
  7. 7. Managing a Business <ul><li>Purpose of Business </li></ul><ul><ul><li>To Create Customers </li></ul></ul><ul><li>Functions of Business </li></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>Innovation </li></ul></ul><ul><li>Profit is result, not a cause, of business activity </li></ul>
  8. 8. “What is Our Business?” <ul><li>Who is the Customer? </li></ul><ul><li>What does the Customer Buy? </li></ul><ul><li>What is the Value to the Customer? </li></ul><ul><li>What will our Business Be? </li></ul><ul><li>What SHOULD our Business Be? </li></ul>
  9. 9. Business Performance Objectives <ul><li>Market Share </li></ul><ul><li>Innovation </li></ul><ul><li>Productivity </li></ul><ul><li>Physical and Financial Resources </li></ul><ul><li>Profitability </li></ul><ul><li>Manager Performance and Development </li></ul><ul><li>Worker Performance and Attitude </li></ul><ul><li>Public Responsibility </li></ul>
  10. 10. Principles of Production <ul><li>Three Systems of Production </li></ul><ul><ul><li>Unique Product Production </li></ul></ul><ul><ul><li>Mass Production </li></ul></ul><ul><ul><ul><li>Old style </li></ul></ul></ul><ul><ul><ul><li>New style </li></ul></ul></ul><ul><ul><li>Process Production </li></ul></ul>
  11. 11. Managing Managers
  12. 12. Three Stonecutters <ul><li>“I am earning a living” </li></ul><ul><li>“I am being the best stonecutter I can be” </li></ul><ul><li>“I am creating a cathedral” </li></ul>
  13. 13. Misdirection by the Boss <ul><li>Sometimes Management Directions are Not Clear </li></ul><ul><li>Henry II King of England </li></ul><ul><li>Thomas Beckett Archbishop of Canterbury </li></ul><ul><li>Mid 1100s Sack cloth and ashes </li></ul>
  14. 14. Management by Objectives (MBO) <ul><li>Prepared by Employee </li></ul><ul><li>(In Consultation with His/Her Manager) </li></ul><ul><li>Includes Objectives and Measurement </li></ul><ul><li>Standards </li></ul><ul><li>Facilitates “Management by Self Control” </li></ul>
  15. 15. Other Topics <ul><li>Span of Managerial Responsibility </li></ul><ul><li>The Manager and his Superior </li></ul><ul><li>The Spirit of an Organization </li></ul><ul><li>Appraisals, Compensation, Promotions </li></ul><ul><li>CEO and the Board </li></ul><ul><li>Developing Managers </li></ul>
  16. 16. Managing Workers and Work
  17. 17. Managing Workers and Work <ul><li>Personnel Management </li></ul><ul><li>Taylor, Fayol, Gilbreth </li></ul><ul><li>Organizing for Peak Performance </li></ul><ul><li>Engineering the Job </li></ul><ul><li>Motivating for Peak Performance </li></ul><ul><li>Communication; Vision </li></ul><ul><li>Supervisor / Foreman </li></ul><ul><li>Professional Employee </li></ul>
  18. 18. Summary and Conclusions
  19. 19. The Work of the Manager <ul><li>Set Objectives </li></ul><ul><li>Organize </li></ul><ul><li>Motivate and Communicate </li></ul><ul><li>Measurement </li></ul><ul><li>Develop People </li></ul>
  20. 20. 5 Steps in Making Decisions <ul><li>Define the Problem </li></ul><ul><li>Analyze the Problem </li></ul><ul><li>Develop Alternative Solutions </li></ul><ul><li>Find the Best Solution </li></ul><ul><li>Implement the Decision </li></ul>
  21. 21. The Manager of Tomorrow <ul><li>Must manage by objectives </li></ul><ul><li>Must take more risks and have a longer time frame </li></ul><ul><li>Must be able to make strategic decisions </li></ul><ul><li>Must be able to build an integrated team </li></ul><ul><li>Must be able to communicate fast and clear </li></ul><ul><li>Must see the business as whole </li></ul><ul><li>Must relate to total environment </li></ul>
  22. 22. Responsibilities of Mgmt <ul><li>Operate at a Profit and Grow </li></ul><ul><li>Social Impact </li></ul><ul><ul><li>“Our Lord’s Parables of the Talents </li></ul></ul><ul><li>Management as a Leading Group </li></ul>
  23. 23. The Effective Executive Peter Drucker 1966
  24. 24. Two major assumptions <ul><li>The executive’s job is to be effective </li></ul><ul><li>Effectiveness can be learned </li></ul>
  25. 25. Three interesting quotes <ul><li>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) </li></ul><ul><li>People decisions are time consuming, for the simple reason that the Lord did not create people as “resources” for organization. (p. 33) </li></ul><ul><li>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) </li></ul>
  26. 26. <ul><li>Executives tend to have high levels of </li></ul><ul><ul><ul><li> Intelligence </li></ul></ul></ul><ul><ul><ul><li> Imagination </li></ul></ul></ul><ul><ul><ul><li> Knowledge </li></ul></ul></ul><ul><li>But often lack </li></ul><ul><ul><ul><li> Effectiveness </li></ul></ul></ul><ul><li>Intelligence, Imagination, and Knowledge are essential </li></ul><ul><li>But only Effectiveness converts them to Results </li></ul><ul><li>An Executive is To Execute </li></ul>EFFECTIVE EXECUTIVES
  27. 27. EFFECTIVE EXECUTIVES <ul><li>Executive and Manager are not synonymous </li></ul><ul><li>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. </li></ul>
  28. 28. EFFECTIVE EXECUTIVES <ul><li>Effective executives have certain practices in common that make them effective. </li></ul><ul><li>In other words, effectiveness is a set of practices; a habit </li></ul><ul><li>Practices can be learned. </li></ul><ul><li>Therefore, effectiveness can be learned </li></ul><ul><li>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. </li></ul>
  29. 29. EFFECTIVE EXECUTIVES <ul><li>There are 5 practices/habits that have to be acquired to be an effective executive – </li></ul><ul><li>Time allocation </li></ul><ul><li>Focus on outward contribution </li></ul><ul><li>Build on strengths, own and others </li></ul><ul><li>Establish Priorities </li></ul><ul><ul><li>Concentrate on a few major areas where superior performance will produce outstanding results </li></ul></ul><ul><li>Make effective decision </li></ul><ul><ul><li>Effective decision making is a system – a series of correct steps in the correct sequence </li></ul></ul>
  30. 30. TIME <ul><li>Output is limited by the scarcest resource </li></ul><ul><li>Time is the limiting factor, the most scarce resource </li></ul><ul><ul><li>Can always acquire more money or people </li></ul></ul><ul><ul><li>But one cannot obtain more time </li></ul></ul><ul><li>The Supply of Time is totally inelastic </li></ul><ul><ul><li>No matter how high the price, the supply cannot increase </li></ul></ul>
  31. 31. TIME <ul><li>Three Step Process </li></ul><ul><ul><li>Record Time </li></ul></ul><ul><ul><li>Manage Time (Prune the time wasters) </li></ul></ul><ul><ul><li>Consolidate Time </li></ul></ul>
  32. 32. TIME WASTERS <ul><li>Identify time wasters which follow from lack of system or foresight </li></ul><ul><ul><li>Recurring crisis </li></ul></ul><ul><li>Time waste often results from overstaffing </li></ul><ul><li>Another common time waster is mal-organization. Its symptom is an excess of meetings </li></ul><ul><ul><li>People can either meet or work, but they cannot do both at the same time </li></ul></ul><ul><ul><li>Meetings should never be allowed to become the main demand on an executive’s time </li></ul></ul><ul><li>Another major time waster is malfunction in information </li></ul>
  33. 33. TIME <ul><li>Three Step Process </li></ul><ul><ul><li>Record Time </li></ul></ul><ul><ul><li>Manage Time (Prune the time wasters) </li></ul></ul><ul><ul><li>Consolidate Time </li></ul></ul>
  34. 34. OUTWARD CONTRIBUTION <ul><li>Key Question - </li></ul><ul><li>“ What do you do that justifies being on the payroll </li></ul><ul><li>Answer must be outward focused, not inward </li></ul>
  35. 35. BUILD ON STRENGTHS <ul><li>Promote people based on what they can do </li></ul><ul><li>Make staffing decisions to maximize strengths, not minimize weaknesses </li></ul>
  36. 36. BUILD ON STRENGTHS <ul><li>Four rules for staffing based on strengths </li></ul><ul><ul><li>Don’t make jobs impossible </li></ul></ul><ul><ul><li>Do make jobs demanding and big </li></ul></ul><ul><ul><li>Know employee’s strengths </li></ul></ul><ul><ul><li>Know that to get strengths, one must put up with weaknesses </li></ul></ul><ul><li>Logical consequence - It is the duty of the executive to remove ruthlessly anyone who consistently fails to perform with high distinction. </li></ul>
  37. 37. BUILD ON STRENGTHS <ul><li>Effective executive must also maximize his/her own strengths </li></ul><ul><ul><li>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?” </li></ul></ul>
  38. 38. PRIORITIZE <ul><li>Sloughing off Yesterday </li></ul><ul><ul><li>Continuously ask, “If we did not already do this, would we go into it now.” </li></ul></ul><ul><li>Priorities and Posteriorities </li></ul><ul><ul><li>Priorities - Decide what you will do </li></ul></ul><ul><ul><li>Posteriorities - Decide what you will not do </li></ul></ul>
  39. 39. PRIORITIZE <ul><li>Rules for identifying priorities </li></ul><ul><ul><li>Pick the future instead of the past </li></ul></ul><ul><ul><li>Focus on opportunity rather than problems </li></ul></ul><ul><ul><li>Choose your own direction, rather than climb on the bandwagon </li></ul></ul><ul><ul><li>Aim high for something that will make a difference rather than for something that is safe and easy to do </li></ul></ul>
  40. 40. EFFECTIVE DECISIONS <ul><li>To make decisions is the specific executive task </li></ul><ul><li>Effective executives do not make many decisions. They concentrate on the important ones </li></ul>
  41. 41. EFFECTIVE DECISIONS <ul><li>Elements of the Decision Making Process </li></ul><ul><ul><li>Is this a generic situation, or a special situation? </li></ul></ul><ul><ul><li>What must the solution accomplish? </li></ul></ul><ul><ul><li>Build into the decision the action to carry it out </li></ul></ul><ul><ul><li>Determine feedback which tests the actual results against the desired results </li></ul></ul>
  42. 42. EFFECTIVE DECISIONS <ul><li>The effective executive does NOT start with the facts, but with opinions </li></ul><ul><ul><li>The effective executive encourages differences of opinions </li></ul></ul><ul><ul><li>Don’t foster consensus, but dissension </li></ul></ul>
  43. 43. 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.”
  44. 44. Managing the Non Profit Organization Peter Drucker 1990
  45. 45. I. The Mission <ul><li>Development of the Mission </li></ul><ul><ul><li>The mission is forever and may be divinely ordained; the goals are temporary </li></ul></ul><ul><li>Leadership is a Foul-Weather Job </li></ul><ul><li>Interview - Exec. Director of Girl Scouts </li></ul><ul><ul><li>Setting New Goals </li></ul></ul>
  46. 46. I. The Mission <ul><li>Interview - Max De Pree, chairman of Herman Miller and Hope College </li></ul><ul><ul><li>Leadership </li></ul></ul><ul><li>Action Implications </li></ul><ul><ul><li>Never start with tomorrow to reach eternity </li></ul></ul><ul><ul><li>Think long range, then figure out today </li></ul></ul>
  47. 47. II. From Mission to Performance <ul><li>Converting Good Intentions into Results </li></ul><ul><ul><li>Need Plan, Marketing, People, Money </li></ul></ul><ul><li>Winning Strategies </li></ul><ul><ul><li>“ Pray for Miracles; Work for Results” </li></ul></ul><ul><ul><li>How to Innovate </li></ul></ul><ul><ul><li>Common Mistakes </li></ul></ul><ul><li>Interview – Prof. at Northwestern </li></ul><ul><ul><li>Defining the Market </li></ul></ul><ul><li>Interview – CEO, American Heart Assoc. </li></ul><ul><ul><li>Building Donor Constituency </li></ul></ul><ul><li>Action Implications </li></ul>
  48. 48. III. Managing for Performance <ul><li>What is the Bottom Line? </li></ul><ul><li>Basic Do’s and Don’t’s </li></ul><ul><li>Effective Decisions </li></ul><ul><li>Interview – President of American Federation of Teachers </li></ul><ul><ul><li>How to Make Schools Accountable </li></ul></ul><ul><li>Action Implications </li></ul>
  49. 49. IV. People and Relationships <ul><li>People Decisions </li></ul><ul><li>Key Relationships </li></ul><ul><li>Interview – Vicar for Social Ministry </li></ul><ul><ul><li>From Volunteers to Unpaid Staff </li></ul></ul><ul><li>Interview – President of Fuller Theological Seminary </li></ul><ul><ul><li>The Effective Board </li></ul></ul><ul><li>Action Implications </li></ul>
  50. 50. V. Developing Yourself As a Person, as an Executive, as a Leader <ul><li>You Are Responsible </li></ul><ul><li>What do You Want to be Remembered For </li></ul><ul><li>Interview – Founder of 2 NFPOs </li></ul><ul><ul><li>Non-Profits: The Second Career </li></ul></ul><ul><li>Interview – VP of Hospital Chain </li></ul><ul><ul><li>The Woman Executive </li></ul></ul><ul><li>Action Implications </li></ul>