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Peter Drucker on improving decision making with feedback analysis

I’ve read and appreciated this suggestion from Peter Drucker enough times that I’m finally going to apply it.

Here’s the idea:

You can learn to identify your strengths by using feedback analysis. This is a simple process in which you write down every one of your key decisions and key actions along with the results that you expect them to achieve. Nine to twelve months later, check the actual results against expectations.

After two to three years of use, you will know your strengths by tracking those decisions and actions where actual results fell in line with or exceeded expectations.

Once you have identified your strengths through feedback analysis, you can use this knowledge to improve performance and results in five ways:

1) Concentrate on your strengths
2) Work on improving strengths. You may need to learn new knowledge or update old.
3) Recognize disabling habits. The worst and most common one is arrogance. Oftentimes poor performance stems from an unwillingness to pursue knowledge outside one’s own narrow specialty.
4) Remedy bad habits and bad manners. All too often, a bad habit such as procrastination or bad manners makes cooperation and teamwork all but impossible.
5) Figure out what you should not do.

Peter Drucker – The Daily Drucker
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Questions of the day (leverage)

  • What is the biggest contribution that I can make to this team or organisation?
  • What does it mean for me to be good at my job? What would be happening around me if I was good at my job? How would I feel? How would the people around me feel?
  • What’s getting in the way?
  • What do I have to do to be able to make progress? (long list)
  • Out of the long list of things that will help, which would make the most difference? Which would enable not just progress, but accelerating progress towards our goals? (These are high leverage activities.)
  • Who can I ask for help?

Write your answers down.
Write down your decisions.
Write down what you’re going to do.
Write down what you think will happen.
Come back later and see what happened. (This is Peter Drucker’s Feedback Analysis)

With thanks to Jeff Sanders and the 5 AM Miracle Podcast, ep #303 for the reminder of the importance of vision (defining the work) for specific tasks, not just for organisation.

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Peter Drucker on pay and rewards for knowledge workers

Knowledge workers demand economic rewards… Their absence is a deterrent.

But their presence is not enough… [Knowledge workers] need opportunity; they need achievement; they need fulfillment; they need values.

Only by making themselves into effective executives can knowledge workers obtain these satisfactions. Only executive effectiveness can enable society to harmonize its two needs: the needs of the organisation to obtain from the individual the contribution it needs, and the need of individuals to have the organisation serve as their tool for the accomplishment of their purposes.

Peter Drucker – The Daily Drucker from The Effective Executive
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Peter Drucker on performance appraisals

Effective executives usually work out their own unique form of performance appraisal. It starts out with a statement of the major contributions expected from a person in his past and present positions and a record of their performance against these goals. Then it asks four questions:

1) What has he or she done well?

2) What, therefore, is he or she likely to be able to do well?

3) What does he or she have to learn or acquire to be able to get the full benefit from their strengths?

4) If I had a son or daughter, would I be willing to have him or her work under this person?
a) If yes, why?
b) If no, why?

This appraisal actually takes a much more critical look at a person than the usual procedure does. But it focuses on strengths. Weaknesses are seen as limitations to the full use of strengths and to one’s own achievement, effectiveness, and accomplishment.

The last question (4b) is the only one that is not primarily concerned with strengths. Subordinates, especially bright, young, and ambitious ones, tend to mold themselves after a forceful boss. There is, therefore, nothing more corrupting and more destructive in an organisation than a forceful but basically corrupt executive. Here, therefore, is the one area where weakness is a disqualification by itself rather than a limitation on performance capacity and strength.

Peter Drucker – The Effective Executive (from in The Daily Drucker)
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Drucker on the theory of the business

The theory of the business must be known and understood throughout the organisation. This is easy in the organization’s early days. But as it becomes successful, an organization tends increasingly to take its theory for granted, becoming less and less conscious of it. Then the organization becomes sloppy. It begins to cut corners. It begins to pursue what is expedient rather than what is right. It stops thinking. It stops questioning. It remembers the answers but has forgotten the questions. The theory of the business becomes “culture.” But culture is no substitute for discipline, and the theory of the business is a discipline.

The theory of the business has to be tested constantly. It is not graven on tablets of stone. It is a hypothesis, And it is a hypothesis about things that are in constant flux – society, markets, customers, technology. And so, built into the theory of the business must be the ability to change itself. Some theories are so powerful that they last for a long time. Eventually every theory becomes obsolete and then invalid. It happened to the GMs and the AT&Ts. It happened to IBM…*

Peter Drucker – Managing in a Time of Great Change (From The Daily Drucker)

*It happened to Compuserve, MySpace, Yahoo, Nokia…

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Values and vision: the acid test

Peter Drucker and Stephen Covey ask the same simple question to get at the heart of these:

“What do you want to be remembered for?”

Covey asks you to imagine your funeral:

  • Who is there?
  • What do you hope they’d say about you?
  • Is this consistent with how you live now?
  • Which goals and relationships matter, in the end?
  • Which work and stresses fall into insignificance?

The answers to these questions are your compass.

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Peter Drucker on continuity and change

The more an institution is organized to be a change leader, the more it will need to establish continuity internally and externally, and the more it will need to balance rapid change and continuity.

…

Balancing change and continuity requires continuous work on information. Nothing disrupts continuity and corrupts relationships more than poor or unreliable information. It has to become routine for any enterprise to ask at any change, even of the most minor one: “Who needs to be informed of this?” And this will become more and more important as more enterprises come to rely on people working together without actually working together – that is, on people using the new technologies of information.

Above all, there is need for continuity in respect to the fundamentals of the enterprise: its mission, its values, its definition of performance and results. … The balance between change and continuity has to be built into compensation, recognition and rewards.

Peter Drucker – Management Challenges for the 21st Century (in The Daily Drucker)

In other words, the faster things change, the more valuable stability becomes. This is true for skills and routines, for cultural reference points, and especially for relationships. The hard part is seeing which things are most valuable: if you’re not careful, you don’t know what you’ve got till it’s gone.

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Peter Drucker on social responsibility

A business that does not show a profit at least equal to its cost of capital is irresponsible; it wastes society’s resources. Economic profit performance is the base without which business cannot discharge any other responsibilities, cannot be a good employer, a good citizen, a good neighbor.

But economic performance is not the only responsibility of a business any more than education is the only responsibility of a school or health care the only responsibility of a hospital.

Every organisation must assume responsibility for its impact on employees, the environment, customers, and whoever and whatever it touches.

That is social responsibility. But we also know that society will increasingly look to major organizations, for-profit and non-profit alike, to tackle major social ills. And there we had better be watchful, because good intentions are not always socially responsible. It is irresponsible for an organisation to accept – let alone to pursue – responsibilities that would impede its capacity to perform its main task and mission, or to act where it has no competence.

Peter Drucker – Managing in a time of Great Change

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Drucker on abandonment

Effective executives know that they have to get many things done effectively. Therefore, they concentrate. And the first rule for the concentration of executive efforts is to slough off the past that has ceased to be productive. The first class resources, especially those scarce resources of human strength, are immediately pulled out and put to work on the opportunities of tomorrow.

If leaders are unable to slough off yesterday, to abandon yesterday, they simply will not be able to create tomorrow.

Peter Drucker – The Effective Executive
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Peter Drucker on Freedom

Freedom … is not the same as individual happiness, nor is it security or peace and progress. It is not the state in which the arts and sciences flourish. It is not good, clean government or the greatest welfare of the greatest number.

This is not to say that freedom is inherently incompatible with all or any of these values, though it may be and sometimes will be. But the essence of freedom lies elsewhere. It is responsible choice. Freedom is not so much a right as a duty. Real freedom is not freedom from something ; that would be license. It is freedom to choose between doing or not doing something, to act one way or another, to hold one belief or the opposite. It is never a release and always a responsibility. It is not “fun” but the heaviest burden laid on man: to decide his own individual conduct as well as the conduct of society and to be responsible for both decisions.

Peter Drucker – The Freedom of Industrial Man

You won’t agree with all of the above – I’m still mulling it over – but Drucker’s emphasis on choice and responsibility is spot on.

Most aspects of our lives, both personal and public, are products of choice. This isn’t the same as them being directly under our control (many of the choices belong to others), but we still have choice in how we act: what to accept, what to maintain and what to seek to change.

Homework:

Look for choices that you’ve been blind to up to now. Which parts of your life – including big, permanent looking things – could do with a review?

Maintenance of the status quo is a choice that we sometimes fail to notice. What are you maintaining as if you have no choice in the matter, when perhaps you should stop? What are you ignoring that you should choose to put more energy into maintaining?

What choices are you in denial about? What have you been choosing to accept that you could – should – choose to change? Small improvements that actually happen are better than giant overhauls that don’t.