What’s in it for me? Optimize and grow any enterprise.
Even the best leaders can feel lost. How can you keep on track and turn ambitious dreams into real outcomes?
This Blink to Peter F. Drucker’s key management ideas will help you and your team achieve great things. Drucker shares tips on creating a united vision, choosing the right team members, supporting skilled workers, and fostering a culture of innovation.
By diving deeper into these insights, not only will you find guidance for your business, but you’ll also discover the building blocks for lasting success along with the next steps to ensure your enterprise continues to thrive.
Managing by purpose and objectives
During the Great Depression, Cadillac’s new manager Nicholas Dreystadt asked himself a profound question: Who buys Cadillacs? He realized his high-end customers wanted Cadillacs not just for transportation, but as status symbols. Gleaning this insight transformed the struggling luxury brand into a profitable business during the worst economy in American history.
Dreystadt clearly defined Cadillac’s purpose and objectives. Through this, he was able to articulate what his business stood for and where it was headed. When you, as a manager, have established your purpose, you must translate it into day-to-day operational objectives.
Running a successful company means aligning actions to goals. So, how do you manage and take action with objectives? Set specific, measurable targets and assignments to motivate staff and track progress.
Focusing resources on key goals sets your priorities and avoids the pitfalls of trying to solve everything. That said, relying on just one objective is risky. Therefore, balance is needed across important areas. Set objectives in all critical domains – finance, operations, marketing, HR, innovation. But remember to remain flexible as circumstances evolve.
Take marketing, for example. Marketing objectives guide brand building, demand generation, and customer engagement. Managers must define targets for brand awareness, customer retention, market share growth, lead generation, sales conversions, and other metrics critical to commercial success.
Setting objectives for market research helps managers understand buyer needs, preferences, and behaviors. This knowledge shapes product development, pricing, sales channels, and communications.
Marketing objectives should also address social responsibilities around ethical claims, transparency, data privacy, inclusion and environmental impacts. After all, a brand’s reputation depends on living its values. The goal here is not to leave things to chance, but to identify and include priorities in the daily running of the enterprise.
Building your team
Here’s a little parable you may have heard. Three stonecutters are busy cutting stones for a cathedral. When asked what they’re doing, the first says he’s earning a living. The second says he’s busy being the best stonecutter in his county. The third stonecutter, however, being a visionary, says “I’m building a cathedral.”
For ambitious objectives, you should hire people like the third stonecutter. These people are able to see the big picture. An organization’s purpose and objectives guide managers in setting priorities, but it’s the people they hire that will ultimately carry out its vision. Recruiting the right people is crucial to any manager’s job.
Here’s how to build your optimal team. When hiring, you must take responsibility for the decision – don’t blame others if it goes poorly. Ensure the new hire has a reliable, competent manager and any hierarchical structures are clear. In addition, don’t burden new people with major tasks right away, and be sure to give them established roles where expectations are clear.
Your first step should be to do your research and write a detailed job description. Then, consider three to five candidates, assessing how they fit into the role with respect to their strengths and weaknesses. For example, a technically gifted person may not suit a team leader role.
Talk to references to get balanced input on candidates’ capabilities. Ensure the candidate understands the assignment, and follow up to keep them on track and get feedback after they get the job.
With focused objectives guiding resource allocation, managers can motivate staff. But hiring misaligned people risks wasting resources. Selecting individuals who share the organization’s purpose and fit well-defined roles is key to assembling an effective team.
Keep checking in with new hires and coach them so they are able to continually contribute to achieving targets. Attracting the right people is essential but they also need effective managers to support and develop their skills.
Building entrepreneurship into organizations
So, once you’ve assembled your team, how do you embed innovation into the system to ensure it thrives? This requires entrepreneurship, a crucial aspect that’s often hard to instill into established businesses or nonprofits.
To be entrepreneurial, established organizations require structures that propel innovation. Businesses that want to be the best offer competitive compensation and instill policies that motivate people to create for the company long-term.
When introducing new projects or products to the company, don’t assign them to existing departments, as doing so runs the risks of role confusion among workers. Instead, create new departments, and assign the top creatives and innovators to drive the new ventures. Enable those working in day-to-day operations to stay focused on the core business.
Always strive to innovate within your expertise. Also, remember that acquisitions rarely succeed – it’s better to install your own management when you acquire a new entity. Focus on the market and plan financing to meet the cash flow needs of your new venture. Founders should define their role within the new project, who they work with, and how. Innovation depends on structures enabling creators and operating teams to focus on their strengths.
To further support innovation, managers need to consider diverse opinions. Seeking guidance and consultation outside of the business can provide valuable perspectives on market needs. Founders in particular must balance openness to feedback with decisiveness.
Fostering innovation requires managers to embed support throughout the organization. But innovation ultimately serves the customer, so aligning systems to the needs of the market is crucial.
Installing entrepreneurship into your business will deliver great products, but to expand your market, you must get familiar with entrepreneurial strategies. We’ll look at that next.
Entrepreneurial strategies for managers
Bell Laboratories knew it had created something ground-breaking when it invented the transistor in 1947, but people at the company felt the revolutionary device’s time had not come. So, in the 1950s, when Sony asked to license the technology from them for a paltry $25,000, they snapped up the deal.
This was a massive win for Sony, who then used the transistor to make their portable radios, turning the company into one of the biggest electronics manufacturers in the world. What Sony did was discover a new use for an old technology. This is just one of a number of entrepreneurial strategies that organizations have at their disposal.
Another kit in the entrepreneurial toolbox is a strategy called entrepreneurial judo. With this technique, you move to where your competitors either haven’t established themselves or tend to neglect. Then you build a lead, gradually extending to other parts of the market as you gain more control. However, as you do this, you’ll still need to offer something new. The innovation could be a slight change in the product, price, or after-sale service to secure your lead.
Need more strategies? Try the toll-gate strategy. Consider the medical and pharmaceutical company Alcon, which developed an enzyme crucial for cataract surgeries. It cost so little, competitors didn’t want to waste their time replicating it. Alcon situated themselves at the toll-gate and reaped enormous rewards. This is a great position to be in, and it can be tempting to abuse your monopoly while you are there. Of course, this isn’t a respectable thing to do.
Businesses can also deploy a specialty skill. Think about it: Do you know the names of any car nameplate manufacturers? The nameplate makers don’t care if you know them because their highly-skilled work guarantees their market. Cultivating a specialty market can boost sales. Entrepreneurs can also innovate in a specialty market space by analyzing trends and markets and tweaking price, method of payments, finding a new use for an old product or paying attention to client needs by adding more value.
Notice how much revolves around innovation. The next vital question is: Are there a set order of principles you can apply to become a true innovator?
Setting principles for innovation
Consider this: Innovators in Sweden sold more matchboxes than anyone in the world for almost half a century. How? By taking advantage of a clever yet simple innovation: They discovered they could place an equal number of matches in each matchbox. They then found a way to fill these matchboxes automatically.
You, too, can increase innovation by analyzing opportunities, unexpected successes, processes, industry changes, demographics, new knowledge, and shifting perceptions. You can create simple, intuitive solutions with answers so obvious everyone thinks they could have come up with them.
Starting small minimizes cost and complexity, making it easy to test and adjust solutions as appropriate. When innovating, aim for leadership in your field. This will keep you energized and motivated. A word of caution: Stay focused on your core business and innovate within your field. Avoid the distractions of diversification.
Strive to solve today’s problems rather than trying to predict the distant future. Thomas Edison only deployed people and resources into the lightbulb when knowledge about electricity was sufficient to make it possible.
Observe how innovations affect people’s lives and work. And remember, innovation must always be market-driven with the aim of allowing people to live better lives.
Innovation requires analyzing and synthesizing, combining internal data with external perspectives. And simple, intuitive solutions often surpass complex ones.
Your organization can sustain progress by innovating incrementally from its core strengths aligned to customer demands. Remember, innovation never ends. Consistent learning and feedback allows you to keep improving. Effective organizations and knowledge workers understand their strengths and contributions, and as the world increasingly relies on information, management of the organization is becoming as important as management of the individual.
Managing the knowledge worker
How do you manage a person who has found autonomy through a special skill or unique knowledge?
The demands on the modern day worker are different from what they used to be. Manual laborers focus on efficiency – doing things right. Knowledge workers must be effective – doing the right things – rather than just being efficient. They take the responsibility of managing their time and directing themselves. This means they need guidance and collaboration, rather than close supervision.
Effective knowledge workers focus on contributing value based on their specialized skills. They produce ideas, concepts, and information. Then they contribute that work to what others are doing to generate results.
Contributing unique value while aligning efforts with the team builds strong relationships. Understand your strengths and find roles that maximize them. Always seek feedback to help yourself improve. Don’t waste time on your weaknesses when you can optimize your superpowers.
Develop good habits and manners to eliminate drag on performance. Reflect on how you learn best. Some people are skilled listeners, others love reading, taking notes, or learning solo, while others prefer to learn in teams. Aim to know if you thrive under pressure or prefer low stress environments. This self-understanding will reveal the work settings and roles where you can be most effective. Some thrive in large organizations, others small. Some do best as leaders, and some as support.
Knowledge workers create value by focusing on personalized growth and collaborative contribution. Their effectiveness comes from aligning their strengths to the right roles and teams in the right environment. Knowledge worker effectiveness enables organizations to fully utilize expertise. But it requires them to take charge of their own development and alignment through self-awareness, lifelong learning, and interpersonal skills.
Managing the second half of your life
Albert Einstein finished his best work before the age of 40. It can be hard to live a fulfilling life after so much action. Today, many leaders are outliving the very organizations they’ve helped build. Avoiding boredom or crisis in the second half of life has become a worthy task, and it’s one that requires long-term planning.
Some leaders and managers start completely new careers to keep applying their skills where they can achieve more social impact. They move from business to healthcare, education, philanthropy or something similar where the need is urgent and the challenge is obvious. Others study new fields like law in order to focus on serving their communities.
A growing number of people are working part-time or consulting in the same field, while others create parallel jobs related to their passions. Volunteering is another great option. An increasing number pursue social entrepreneurship.
It’s a smart idea for knowledge workers to actively prepare for post-retirement life. Preparation ensures a smooth transition to areas of purpose and fulfillment. There are other benefits, too; life is by nature uncertain. In difficult situations like losing a spouse, or a marriage breakup, or an accident, having a second calling can provide you with emotional and financial stability.
In a modern world fixated on achievement, accomplishing new things later in life affords meaning. But it requires inner direction, innovation, and agency to reinvent yourself.
Rather than clinging to past accomplishments, think ahead to how you want to live after your working life ends. Managing the second half of life promises new growth with an opportunity to utilize your talents. Even as you innovate within an organization, you must innovate in your personal life to envision and prepare for what lies ahead.
Final summary
Managers help people work together toward common goals by organizing teams, improving skills, and upholding company values. They set clear targets, turning big ideas into actionable steps. Moreover, they build effective teams by hiring aligned talent that fits roles, providing support and coaching, and fostering creativity.