Blog Carnival 2012 - Peter Drucker's Management Philosophy

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One of my favorite blogs on leadership is John Hunter’s Curious Cat Management Improvement Connections.  Besides a number of informative posts on a variety of improvement-related topics, John regularly hosts a management blog carnival, where various business and leadership blogs are featured.

This year, I’m happy to participate in the carnival with information on some of the blogs I read on a regular basis.  Reviews of all of the blogs featured in this year’s carnival can be found at http://curiouscat.com/management/carnival_2012.cfm. 

My first review in this year’s carnival is Peter Drucker’s Management Philosophy by Jorrian Gelink.  I don’t know Jorrian personally, but after reading his blog, he is obviously a Drucker zealot with excellent insight into Peter Drucker’s management philosophy.

Peter Drucker’s teachings are closely aligned with a lean mindset.  I have always found the information he provided to be a great fit with W. Edwards Deming’s System of Profound Knowledge, and a necessary component of effective leadership.  Although Deming regularly attacked Management by Objectives (MBO), I believe he was more disappointed with how MBO was implemented than the method itself.  In fact, Drucker even said that MBO only works if objectives are carefully thought through, and that 90% of the time, they aren’t.

I believe much of Drucker’s teachings have been lost over the last several years, as companies look for quick and easy ways to “become lean.”  I applaud Gelink for keeping it alive and using it to teach current and future leaders that Drucker’s philosophy is as relevant today as it was when he was alive.  I enjoy reading Gelink’s posts and expect to continue to learn from the Peter Drucker’s Management Philosophy in the future.

Gelink organizes the blog into four main sections:  Executive Basics, Management Basics, People Management, and Entrepreneurship.  There is also an excellent search tool that makes it easy to find posts on a number of management topics.  A sample of Jorrian’s posts is listed below:

Fear of Conflict – Why Conflict is Necessary  An excellent summary of the benefits of healthy conflict in any organization.  The post reminds me of The Abliene Paradox by Jerry B. Harvey; a story where family members agree to drive 53 miles to Abilene for lunch, even though nobody really wants to do it.  To avoid conflict, however, they all go along, have a terrible time, and blame each other upon returning home.  Unfortunately, too many organizations suffer from the Abilene Paradox because of the absence of open, healthy conflict.

In the post, Jorrian writes, “the result of a stronger, discussed plan is increased effectiveness, and overall satisfaction of those involved because their input was considered into it.”

What is Our Mission?  The Heart of the Organization  Whether deploying lean or not, the importance of a clear and unchanging purpose is critical to success.  Without a clear mission, there is no team – there is only a group of individuals who define success on their own terms.  Any success without a consistent purpose is accidental and destined to be short-lived.

In providing direction for defining the purpose, Jorrian wrote, “the mission starts with what is on the outside of the organization; not with what is inside.  Entrepreneurs that fail are the ones that do what they want to do, instead of what their customer wants.”  Examples of mission statements from successful technology-based companies are provided within the post.

In Personal Development – Becoming Effective in Your Role, Jorrian provides the distinction between being effective and efficient, specifically that effectiveness results from doing the right things.

The post hits on one of Drucker’s most important teachings – the idea that understanding, developing, and continually using your strengths is what leads to success.  Jorrian writes that aligning individual strengths with the organization will lead to increased effectiveness and personal success.

I have so many interesting books on reading list that I will never have the time to complete.  As with Deming, I learn a great deal each time I re-read one of Drucker’s books because he had so much to teach.  Reading Peter Drucker’s Management Philosophy allows me to keep up on Drucker’s theories even when I don’t have the time to re-read his books.

More information on the 2012 Management Improvement Blog Review can be found at http://curiouscat.com/management/carnival_2012.cfm.  For specific posts from this year’s carnival, please go to http://management.curiouscatblog.net/category/carnival/.

The Big Gains? Not Without Transformation

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“In my experience, most troubles and most possibilities for improvement add up to proportions something like this:  94% belong to the system (the responsibility of management). . . No amount of care or skill in workmanship can overcome fundamental faults of the system.” – W. Edwards Deming

Why have so few organizations been truly successful with lean?  The philosophy has been around in one form or another for many years and there is no shortage of books, papers, and seminars on the subject.  Even with well-publicized examples like Toyota, Southwest Airlines, and Herman Miller, the probability that a lean deployment will succeed today is fairly low.

A major factor contributing to the problem I have found is that people tend to underestimate the transformation required to succeed.  When one learns about lean, there is a tendency to believe that teaching people how to identify and eliminate waste is the key to success.  Although there is a fairly good chance that improvement will occur after investing in training and coaching, without transformation the organization will never get beyond the initial stages of lean and never realize the big gains that can be achieved through its adoption.  The pace of improvement will eventually slow, and the resulting frustration and natural pull back to traditional thinking will eventually lead to abandoning the effort.

Transformation in Thinking

There is a point in the process where a significant transformation in thinking is needed to move the organization to the next level and achieve the big gains. Whether occurring at a single point or several points over time, transformation in thinking occurs when leaders begin to realize that the organization's problems are the result of barriers that only they can fix.  It is at this point when workers are no longer blamed for poor performance and the lack of improvement.

Improvement and the point of transformation

Although necessary for improvement, lower level kaizen activity can only take the organization's performance so far, while addressing issues like poor hiring and promotion systems, an unclear or inconsistent purpose, a lack of learning, ineffective planning, and other barriers are the way to tap into the 94% of the improvement opportunities available to the organization.

What causes a leader to transform his or her thinking depends on experiences, perspectives, and outlook for the future – and it’s different for everybody.  The key to success is to keep working with people until they realize lean is a very different approach to business.  It requires a dedication to lifelong learning and change, and the understanding that the inertia associated with the traditional approach to business will cause a continual pull within the organization back to its old ways.

Where are the Generalists?

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"[Management is] an integrating discipline of human values and conduct, of social order and intellectual inquiry, [a discipline that] feeds off economics, psychology, mathematics, political theory, history, and philosophy. In short, management is a liberal art..." - Peter Drucker

Businesses need specialists in order to be successful – this is nothing new or earth shattering.  Having people with specialized knowledge in areas related to the company's products, services, processes, network infrastructure, etc. enable the ability to serve customers and meet objectives on a continuing basis.  What many people do not realize, however, is that having generalists – especially in leadership positions – is just as critical to the organization’s success.

What is a Generalist?

A generalist is someone who has broad knowledge and skills, and understands the organization's high level system, including the hand-offs and interactions between people and processes.  A generalist is not usually interested in working and developing his or her skills within a single area but is more motivated to learning more about the big picture.  He or she is much more comfortable learning a little about many subjects than learning a lot about a single subject.

An organization can have the most talented specialists in the industry but be completely ineffective if these people are not able to agree on what's important and work together to turn their combined talents into commercial success.  By understanding the system, the generalist can bring value to the organization by focusing on overall company performance rather than attempting to optimize any single function or area.  For this reason, generalists often excel in leadership positions and cross-functional roles like project management and planning.

Why Generalists Are Necessary

By clearly understanding the company's high level value stream, the generalist is able to continually align the objectives in one area to those of the organization.

No matter how talented a company’s specialists are; without a common direction and continual effort to improve the way people interact and work together, there is no "organization" - there are only individuals working on what each feels is most important.

Peter Drucker wrote that management is a liberal art in that it requires skill from many different disciplines including psychology, sociology, history, and others.  W. Edwards Deming included psychology, learning, variation, and systems thinking as components of leadership in his System of Profound Knowledge.  What Deming and Drucker were referring to was that management is a role for generalists.

Harnessing the Company's Talent

The obsession many companies have had with specialists over the last several years has created a shortage of generalists that is hampering growth and success.  As a result, many companies are full of great ideas, new technologies, and brilliant technical minds but aren't able to transform them into consistent commercial successful.  A company may be staffed with highly skilled scientists, engineers, and chemists, but if it is not turning this knowledge into viable products or services, it is compromising its future.

Whenever hiring or promoting someone into a leadership position, I have found that a person with a varied background tends to be more effective than someone whose experience and training is completely focused on the function the person is expected to lead.  For example, I would tend to favor a candidate for a quality management position who has experience in procurement and/or manufacturing in addition to quality than one who only has quality control or quality assurance experience.

It's in the Mix

Success in business requires having and leading people to consistently achieve high level objectives.  To do this successfully requires respecting the different talents people have and understanding how best to position and organizing everyone to serve the customer effectively.  This means having the right mix of generalists and specialists to assure success.