Tag Archives: percentages

Do Drucker’s leadership practices stand the test of time?

In 2004, Peter Drucker, an Austrian-born American management consultant, educator, and author, published What Makes an Effective Executive in the Harvard Business Review.

Drucker outlined eight practices and one rule that he had identified from the most effective executives with whom he had worked and/or studied. Let’s look at each of them and see if they are still useful.

Gary Ryan1. Ask, “What needs to be done?“.

This question provides focus. Nothing is more relevant. Focus implies prioritising. What do you prioritise? The activities that are going to give you the biggest returns/outputs for your efforts in the context of achieving the long-term success you are striving to achieve.

This question is also specific for the leader. “What tasks are aligned to my talents?” These are the tasks the leader ought to focus on, and delegate the rest of the tasks to others for whom the tasks match their exceptional talents.

Is this practice still useful?

Yes. This practice is certainly useful. Anything that provides focus in this age is useful. Distractions cost time and time costs money. Whether you are a for profit, not for profit, government or military organisation, time cannot be wasted with the limited resources that are available.

2. Ask, “What is right for the enterprise?

This question has a long-term focus and causes the leader to consider their responsibilities as a steward for the organisation. “Will the organisation be better off, or at least not worse off, as a result of the actions we are about to take?”. While no leader is infallible and there are no guarantees in business, not asking this question is likely to lead to failure.

Is this practice still useful?

Yes. Today’s actions must always be taken in the context of the longer term and the greater good of the organisation.

3. Develop action plans

Drucker explains that plans are a statement of intention. They ought to be living documents that change as forces require them to change. They should not become ‘straightjackets’ that stifle opportunities. Regularly checking progress data, learning from mistakes and successes should all provide information that is used to update the plan.

Is this practice useful?

Yes. Plans provide the detail for our focussed actions.

4. Take responsibility for decisions

Drucker says, “A decision has not been made until people know:

  • the name of the person accountable for carrying it out;
  • the deadline;
  • the names of the people who will be affected by the decision and therefore have to know about, understand, and approve it—or at least not be strongly opposed to it—and
  • the names of the people who have to be informed of the decision, even if they are not directly affected by it.”

Critically, Drucker advises that a ‘decision review system‘ must exist where decisions are evaluated against results. How many of your decisions would pass this test? Not many, I dare guess.

Is this practice useful?

Yes. Even though few people can claim to follow this rule, it doesn’t mean that it isn’t useful. The recent events with CommInsure highlight that leaders need to continually communicate their decisions, their reasons for them, who they will affect and be open to opposing voices from within the organisation who challenge the thinking behind the decisions. Groupthink is dangerous for organisations. Just ask Enron, BP, Arthur Anderson, the Hastie Group, and more recently Dick Smith (although we are yet to know the full underlying reason behind the collapse of this company) etc. about the quality of their decision-making processes.

5. Take responsibility for communicating

Effective communication is one of the greatest leadership challenges of the 21st century. Do your staff know what they need to know, when they need to know it? As a leader, do you know what you need to know, when you need to know it.

Michael Marquardt, author of Leading With Questions believes that effective leaders regularly ask the following three questions of as many staff as possible:

  • What are we doing well?
  • What aren’t we doing well?
  • What would you do if you had the power and authority to create positive change in this organisation?

Is this practice useful?

Yes. It always will be. A tip to help you to increase the likelihood that your team members will know what they need to know when they need to know it, is to make sure that important information from you to them is conveyed by at least three channels of communication e.g. verbally in a meeting, written via an email, published as an article on your company’s intranet.

6. Focus on opportunities, not problems

Jack Welch, while CEO of GE, was famous for teaching his leaders that they must become adept at seeing reality for what is really was, not what they might have wanted it to be. And then, to seek out the opportunities.

As Drucker highlighted, problems need to be solved, but they don’t produce results. Acting on opportunities does.

Is this practice useful?

Yes. Particularly the ability to assess reality for what it is. This leadership skill cannot be underestimated because it allows opportunities to be identified and seized with perfect timing.

7. Run effective meetings

Aah meetings. How many of you think most of the ones you attend are a waste of time? The problem is that too many meetings really are a waste of time.

Drucker advised that you should consider what type of meeting you are going to conduct, well in advance of the meeting. His reasoning was that different types of meetings require different forms of meetings which are driven by the different results they are seeking. His logic makes sense.

Is this practice useful?

Absolutely. At least half of a leader’s time is spent with other people. If this time with other people is not a meeting, then what is it? In this context, making use of this time is critical if a leader is to be effective. Drucker’s suggestions for the different types of meetings to achieve different results is well worth the read – and his suggestions are as relevant today as they have ever been.

8. Think and say, “We”

Leadership is not about you. It is about your organisation and those whom you are serving. They come first.

Is this practice useful?

Yes. As a practitioner of Servant Leadership it is possibly the most important of all Drucker’s practices.

Drucker’s rule – Listen first, speak last

In order to practice this rule a leader must be genuinely curious. Refer to practice 5 above for the three questions that a leader can regularly ask their staff.

Is this rule useful?

Yes. 100%. Use it. Follow it. Practice it. Your leadership needs this rule.

16 years may have passed since Drucker published his article. Each one of his eight practices and his single rule are as important today as they have ever been. They are interdependent and feed off each other. One thing is certain, they won’t harm your leadership effectiveness if you show them. In fact, the opposite will be true.

Gary Ryan helps talented professionals, their teams and organisations to move Beyond Being Good®.

The misuse of percentages

 Very recently, a manager of a client of mine presented his goals and objectives for 2016. One of them included a customer satisfaction rating to reach 80%. The current figure is around 74%, which is well above the industry average of 60%.On the surface, this target looks appropriate. But, if you dig a little, and look at what the percentage actually means, maybe it isn’t such a good target after all.

Gary RyanWhen you have 80% of people saying they are satisfied, that means that 20% aren’t satisfied. And this is where the use of percentages can be misleading. Twenty percent of five is one. If one person isn’t happy, while not perfect, it might not be a big deal. But 1,200 dissatisfied people is a big deal.

The manager above leads an area of the business that has just over 6,000 members, plus another 4,000 plus people who use the facilities. If we just focus on the membership figure, 20% of 6,000 is 1,200 people. That’s a lot of people who will be dis-satisfied with the organisation’s level of service! It is fair to say that when I asked the manager, “Are you saying that it is okay for you to plan to have up to twelve hundred of your members dis-satisfied with your service?”, that both he and everyone else in the room responded with a resounding, “No!”.

By focussing on the improvement from 74% to 80%, what the real impact of what those figures represent had been lost. The improvement sounded good, but the reality of it was that the organisation was effectively planning to have upwards of 1,200 members walking around who were dis-satisfied with their current level of service. And 1,200 people is a lot of people to be unhappy.

Approximately one third of all dis-satisfied customers are dis-satisfied because of something they (the customer) didn’t understand correctly. When I share this figure with people, most of you nod in agreement that the number sounds accurate. The challenge for organisations is that you can’t put your finger into the breast-bone of your customer and say, “You silly fool, you misunderstood something and are blaming us for it!”. Clearly, you can’t do that if you want to keep your customers.

You have to find ways that enable your customers to recognise their errors in a manner that allows them to save ‘face’. No-one likes feeling like an idiot.

Let’s do some more sums. One third of 1,200 is 300. If we apply this figure to the above scenario, 300 is 5% of 6,000. Providing you have easy to use and open communication channels with your customers, these 300 hundred dis-satisfied customers can quickly be turned into satisfied customers by helping them to understand what they have mis-understood in a manner that allows them to save ‘face’. This would leave you with 15% of genuinely dis-satisfied customers and clearly you would need to use your open and easy-to-use communication channels to identify what was upsetting them so that you could work on closing the related gaps.

What percentage should the manager have presented? Aah, good question!

My suggestion is this, “We are striving for 100% satisfaction. We understand that this is a destination that we may never reach. However, we continue to genuinely strive for it none-the-less. Last year our satisfaction rating was 74%, and 70% the year before that. Our current figures mean that 4,440 of our members were satisfied with our service and in a moment I’ll share the reasons they have told why they are happy with us. However, our results also mean that 1,560 members were not happy with our service. Clearly, both figures need to improve and we are trending in the right direction, but the sky must be the limit for our projected improvements for next year.”

I would then suggest that the manager would detail how the organisation is going to bring those improvements to life.

While the organisation may not achieve 100% satisfaction the following year, maybe they could reach 88%. I can assure you that if your target is 80%, you’ll most likely reach it, maybe even a little bit more, but not a lot more.

I encourage you to look at what your percentages really mean. Have the courage to challenge each other and not to passively accept the way that percentages are used to represent data. The real meaning of the data is too often hidden by impressive looking percentages and these can mask the real situation. Shoot for the stars – you never know, you just might reach them.

Gary Ryan helps talented professionals, their teams and organisations to move Beyond Being Good®.