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December 18, 2008

The IDB Project | Chapter 12

The IDB Project is a series of posts sharing summaries, snippets, and takeaways from INSIDE DRUCKER’S BRAIN (Jeffrey Krames)


Idb_12

CHAPTER TWELVE
The Strategic Drucker

“Defining the purpose and mission of the business is difficult, painful, and risky. But it alone enables a business to set objectives, to develop strategies, to concentrate its resources, and to go to work. It alone enables a business to be managed for performance.”Peter Drucker source

Peter Drucker once said it was “irrational” for a business not to plan for growth. He stressed every businesses must have a growth goal. Good thing he outlined a "Business Growth Playbook," which includes the following strategies:

1. Customers Dictate Action
“It is the customer who determines what a business is. For it is the customer, and he alone, who through being willing to pay for a good or a service, converts economic resources into wealth, things into goods.” (THE PRACTICE OF MANAGEMENT, 1954)

2. Plan for the Long-Term
Drucker warned companies to resist fire-fighting now-term issues rather than addressing fundamental long-term business issues. It is easy to become obsessed with delivering immediate results. However, doing-so may just jeopardize the long-term health of a business.

3. Resist the Urge to Please Wall Street
Jeffrey Krames summarizes Drucker’s advice this way, “He also urged managers to never manage their companies by that day’s Dow Jones average (meaning don’t let short-term price influence key management decisions).”

4. Not Deciding is Never the Right Decision
“It is better to make the wrong decision and carry it out than to shirk the job as unpleasant and painful, and, as a result, to allow the accidents of the business to set priorities by default.” (MANAGING FOR RESULTS, 1964)

5. Risk-Taking is with Worth-Taking
Drucker challenged businesses to adopt a risk-taking mentality. Without risks, no rewards are to be earned. Writing in MANAGING FOR RESULTS (1964), Drucker said, “The job is not to impose yesterday's normal on a changed today; but to change the business, its behavior, its attitudes, its expectations -- as well as its products, its markets, and its distributive channels -- to fit the new realities.”


Next, Chapter THIRTEEN of the The IDB Project.

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