Drucker Technique for Making Better Business Decisions

Double Edged SwordPeter F. Drucker has advised some of the greatest business leaders of the last century but he never told them what to do.

There’s no question but that Peter Drucker was a genius, and he left behind thousands of genius-like gems in his writings, speeches, and recordings to show us what to do to achieve success and avoid failure as we labor on the firing line. One would think is that all we have to do is mine these gems from their written or recorded sources, but that’s not true.

Drucker told us what to do, but not how to do it. Unless we can apply and act on the wisdom he imparted, it is “academic.”

His former clients frequently report something like this: “Drucker never told us how to solve our problems or build our sales. All he did was to ask questions. This was more than a little disconcerting at first. However, his questions did make us think, and our thinking sometimes led to the solution of the issue we had been struggling with.”

Drucker resisted responding with explicit “how to” instructions. Questioned by a manager faced with grave challenges to his business, Drucker answered with a question. The manager tried a second time to get specific guidance how to save his business. Drucker responded with another question. The manager refused to give up and again pressed the issue. Finally, Drucker lost his patience. “Okay, so you are in trouble, what are you going to do about it?” This response only placed responsibility for the outcome and demonstrated his usual modus operandi.

There is a circulated story that Drucker asked Jack Welch, former CEO of General Electric, two important questions when Welch assumed the top position at GE. At the time, GE was involved in numerous businesses all over the world. When asked for recommendations, Drucker asked Welch: “What businesses would you rather not be in?” After Welch named several businesses which he considered less desirable, Drucker asked a second question: “What are you going to do about it?”

Welch decided that, regardless of profitability or other factors, if GE could not be the number one or number two in an industry, or could not achieve this position within a reasonable amount of time, the business would be sold or closed. What this did was allowed Welch to concentrate the organization’s always limited capital resources and people where it would have the most effect. In other words, Welch got “more bang for GE’s buck than previously.” This simple strategy helped to make GE the most valuable company in the world by 2004 and other companies have followed Welch strategy.

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James E. McClain is the author of Successful Career Development: A Game Plan, the book upon which some of our training programs are based. He has over 30 years' experience as a corporate HR executive, small business owner with ongoing experience in career development and as a college instructor. His educational background includes a B.S. and Masters degrees Education and Certification in Financial Planning. Our promise is that "you can pay more for training but you can not buy better training." The mission is to deliver the most effective and cost effective training and development programs.

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Posted in Decision Making, Leadership

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