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The Essential Drucker 2010 V2

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Drucker is called as the father of Modern Management, MBO.

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The Essential Drucker 2010 V2

  1. 1. presenting the<br />The Essential Drucker<br />
  2. 2. 1<br />2<br />The book<br />Key Insights<br />
  3. 3. Who is Peter Drucker?<br />known as the- Father of Modern Management<br />Important contributions – <br />MBO<br />Concept of Knowledge Worker<br />Marketing oriented organization<br />Contributed regularly to <br />Harvard Business Review<br />The Economist<br />Wall Street Journal<br />Fans and Followers include Jack Welch (GE), Andy Grove (Intel)<br />(1909 - 2005)<br /><ul><li> 25 honorary doctorates
  4. 4. 39 books
  5. 5. Presidential Medal of Freedom
  6. 6. Presidential Citation, NYU
  7. 7. 7 McKinsey Awards from HBR</li></li></ul><li>The book<br />
  8. 8. 1<br />The Management<br />
  9. 9. What is management?<br />Enabling people to perform<br />Set the culture<br />Training & development<br />Measure performance of self and the organization<br />Result is always outside (no perpetual motion machines )<br />
  10. 10. Dimensions of management<br />Economic performance and improve /maintain wealth producing capability of the organization<br />Work and worker productive<br />Social responsibilities<br />
  11. 11. Purpose of business<br />Marketing and innovation<br />What is our business and what should it be?<br />Objectives should be<br />Operational<br />Selective<br />Multiple<br />Should cover areas of survival<br />
  12. 12. Market standing regardless of sales<br />New markets<br />New products and services in existing markets<br />Optimum market standing as the goal<br />Product Innovation<br />Social innovation<br />Managerial innovation<br />Productivity and improvement of productivity should be a key focus<br />
  13. 13. Lessons from non-profits<br />Starts with their customers<br />Zeal to accomplish mission<br />Effectiveness of boards – CEO and board as colleagues<br />Meaningful achievement<br />Transformation from non-profit volunteer to non-paid professional<br />
  14. 14. New Paradigms –Searching for the holy grail<br />One right org structure<br />One right way to manage people<br />Per Drucker -<br />The organization that fits the task<br />Manage for results<br />Flat hierarchy<br />
  15. 15. New paradigms<br />Practice of management – assumptions<br />Technology and end use are fixed and given<br />Technologies mesh and can impact any industry<br />i.e. the definition “electronics company” is a limitation rather than foundation<br />Management’s scope is legally defined.<br />Economically linked keiretsu<br />
  16. 16. Information<br />Yield control instead of cost control<br />Activity based accounting<br />Price lead costing<br />Total factor productivity<br />Economic value added<br />Benchmarking<br />ROI / Payback period/Cash flow / Discounted present value<br />Outsourcing and consulting of information<br />
  17. 17. Why MBO<br />Un-spelt objectives causes misdirection<br />Management by drives<br />MBO<br />Organizational goals spelt out clearly<br />Departmental /bu goals are arrived from org goals<br />Mgr / individual goals are arrived from BU/Org goals<br />Tools like manager’s letter<br />Self control rather than control from above<br />
  18. 18. Forms and reports<br />Should Focus on performance<br />Should Focus on self monitoring<br />Control & controlling the irrelevant should be avoided<br />
  19. 19. Staffing & Promotion<br />Manager to be blamed for putting a wrong person in a spot<br />Soldier has a right to competent command<br />People decisions impact the performance capacity of an organization<br />New people in established slots<br />
  20. 20. Staffing & Promotion<br />
  21. 21. Staffing & Promotion<br />Widow maker <br />People decisions <br />as a tool of control<br />as a tool for organizational culture<br />as strategy<br />
  22. 22. The entrepreneurial business<br />Special handling for new innovative ventures<br />Separate new businesses from established ones<br />Provide executive cover<br />Build the desire to innovate in the organization rather than trying to acquire it<br />
  23. 23. 2<br />The Individual<br />
  24. 24. Effectiveness <br />Contribution<br />Know thyself<br />Time<br />Effective Decisions<br />Functioning communications<br />Leadership as work<br />Principles of Innovation<br />The second half-life<br />The Educated person<br />
  25. 25. Effectiveness<br />Operations research and the efficiency of the chef’s kitchen<br />Effectiveness - Doing the right thing<br />Effectiveness is a habit and could be practiced<br />
  26. 26. Contribution<br />Results<br />Direct results<br />Building of values and reaffirmation<br />Building and developing people of tomorrow<br />Making the result effective<br />
  27. 27. Know thyself<br />Personal strengths should match assignment <br />More than that personal values should match with the assignment<br />
  28. 28. Time<br />80-20 – where should I contribute <br />What could be delegated<br />-- the recurrent fire fighting<br />Overstaffing – mal-organization<br />Consolidating discretionary time<br />
  29. 29. Characteristics of an entrepreneur<br />Decisive<br />Decisive even with insufficient data<br />Decisive even when mistake prone<br />Decisive but learns from mistakes even when mistake prone<br />Tradition counts only when it makes sense<br />Owns the result<br />
  30. 30. Effective decisions<br /> Right and the wrong compromise – baby and the loaf<br />Translation to work<br />Generic problem or exceptional problem<br />Start with what is right and make your compromises<br />Do not hedge<br />
  31. 31. Leadership as work<br /><ul><li>Think through org’s mission
  32. 32. Define and establish it clearly…. and visibly
  33. 33. Leadership as Responsibility and not as rank or privilege
  34. 34. Hold ultimate responsibility for subordinates actions
  35. 35. Promote / praise / groom subordinates
  36. 36. Earn trust</li></ul>= be an effective manager<br />
  37. 37. Innovation<br />Dos<br />Analyze opportunities<br />Unexpected success or failures<br />Incongruity in customer behavior<br />Positioning<br />Keep it simple to make it effective<br />Aim at leadership<br />Donts<br />Too clever<br />Innovate for the present<br />Innovators are opportunity focused and successful ones become one by defining and containing the risks<br />
  38. 38. 3<br />The Society<br />
  39. 39. Organizing principles of Production<br />
  40. 40. Transformation of society<br />
  41. 41. Some blurred distinction between Socialism! Humanism! And Druckerism<br />Universal rights and responsibility<br />Flat structures<br />Ownership of the means of livelihood and production<br />Need of the commune to be productive<br />
  42. 42. Challenging the statusquo<br />Welfare state is past --?? Scenario post 2009<br />Mega state vs. non-profit social sector<br />Mega state vs. youtube / twitter / facebook<br />Learning & constant relearning -> outliving obsolescence<br />Drucker hedging ?! his bets ??<br />Government will NOT become less pervasive, less powerful, less expensive but will depend more on individuals / organizations to be effective<br />
  43. 43. From chimney monkeys to the era of Rugmark and beyond<br />Time <br />Affluence<br />Move from subsistence production to services<br />So called evils of modernity – is it just widespread reporting of it? And change in our sensibilities?<br />
  44. 44. Key Insights<br />
  45. 45. Purpose of Business<br />Purpose of the business is to satisfy the needs of its customers<br />Some of the questions an organization need to ask frequently are <br />Who is our customer?<br />What should our business be?<br />Planned abandonment -“If we did not do this already, would we go into it now?”<br />The Purpose of a business is to create a customer<br />
  46. 46. Role of Management<br />Everything that affects the performance of the organization is a concern for the management and its responsibility.<br />Traditional models perceive the role of management is internal which is a fallacy<br />The best way to predict the future is to create it. <br />
  47. 47. On Marketing <br />Market standing is important irrespective of increase in sales<br />Market standing to aim for should be optimum and not maximum<br />Technology and End-use are limitations. Customer value and customer decisions to dispose their disposable incomes should be the focus for management<br />The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.<br />
  48. 48. 5 bad habits of organizations<br />Not Invented Here<br />Creaming a market<br />Quality as perceived by self<br />Illusion of a premium price<br />Maximize rather than optimize<br />Until a business returns a profit that is greater than its cost of capital, it does not create wealth — it destroys it.<br />
  49. 49. Effective Decision Making<br />Making good decisions is a crucial skill at every level.<br />
  50. 50. Organization as a human community<br />One does not manage people. They should lead the people.<br />Values are and should be the ultimate test..<br />Knowledge workers are dependent on the organizations to make their work productive.<br />Organizations also take over some of the aspects of a commune as knowledge workers interact, bond and flock together.<br />Rank does not confer <br />privilege or give power. <br />It imposes responsibility.<br />
  51. 51. Management by Objectives<br />Specific<br />Measurable<br />Achievable<br />Realistic<br />Timely<br />SMART goals should be derived from corporate vision and should be set for individuals, teams and departments.<br />Manage for Results<br />Management by objective works - if you know the objectives.<br />
  52. 52. Management by Objectives<br />Jointly Plan<br />Individually Act<br />Management by objective works - if you know the objectives.<br />Jointly control<br />Managers<br />Team Members<br />
  53. 53. Effectiveness vs efficiency<br />Processes and procedures typically help in increasing efficiency but only when the right things are done results are achieved.<br />Efficiency is doing <br />things right; <br />effectiveness <br />is doing the right <br />things.<br />
  54. 54. Knowledge workers<br />Knowledge workers own the tools of their trade.<br />Knowledge society allows upward mobility.<br />What is measured improves<br />
  55. 55. Communications<br />Communication is perception<br />Communication is expectation<br />Communication makes demands<br />Communication and information are different and mostly opposite – yet inter-dependent<br />The onus of making himself/herself understood is on the specialist.<br />The important thing in communication is to hear what is’nt being said<br />