Brand Autopsy

Refresher Course: BROKEN WINDOWS

  • 7 Comments
CeilingTiles

Seeing this hideously dirty ceiling tile at my dentist’s office today reminded me of the Broken Windows theory and how it relates to businesses.

The Broken Windows theory hypothesizes higher crime rates occur in cities when broken windows are left unrepaired because people will conclude no one cares enough to fix them. More windows will become broken and attitudes of lawlessness will spread, resulting in higher crime rates. Michael Levine applied this theory to business in his book, BROKEN WINDOWS BROKEN BUSINESS.

According to Levine, broken windows are telltale signs to customers that a business doesn’t care, that it is poorly managed, and or it has become too big and arrogant to adequately deal with little details.

He warns businesses that customers draw wide-ranging conclusions based upon their perceptions of the broken windows they find. These negative perceptions will undermine a business as they can turn once highly-satisfied customers into very-dissatisfied customers who choose take their business elsewhere.

I’m not saying my Dentist poorly manages his business. I am saying his patients could draw wide-ranging conclusions based upon the fact he hasn’t replaced the severely water damaged ceiling tile.

Every business has broken windows. The easiest way to tell if your business has a broken window is when you find yourself saying, “A customer will never notice that.” Because chances are, they will … just as I did with the way too soiled ceiling tile at my Dentist’s office.


Learn more in this vintage Brand Autopsy post (Dec. 2005).

An Ethical Question … Please Comment

  • 33 Comments

UPDATED (June 10): Thanks everyone for the thoughtful comments. To avoid any question ... going forward, I will disclose how I receive business books reviewed on the blog.


Lots of great conversation is happening about the ethics of compensating bloggers with cash, in-kind gifts, and special access privileges in exchange for writing a post about the product/service a business provides them.

This conversation has me thinking about how I’ve been compensated for some posts on this blog.

Because I frequently write business book reviews, publishers and publicity firms send me free business books. I’m under no obligation to write anything (be it positive, negative, or nothing at all) in exchange. While not cash, this in-kind gift has a monetary value of about $25 per book.

I’ve probably written over 100 business book reviews on this blog. Some reviews have slammed the book as worthless and others have praised the book as worthwhile. In every case, my authentic opinion has been expressed.

However, I’ve never disclosed when a review is from a business book I received as a gift or from a book I purchased. (By the way, the vast majority of my book reviews are from books I've purchased.)

I’m curious … Do you expect me to disclose whether or not I was gifted the book or paid for the book? Would you trust my review more with this type of disclosure?

Thanks for sharing your feedback.

Recap: Yelp presentation

  • 3 Comments
NOTE: crossposted on the ALL THINGS WOM blog
Yelp
On May 13 & 14, WOMMA held its Word-of-Mouth Marketing University conference. Below is a recap of a presentation from the conference.


Presentation:
Yelp: Empowering Consumers with Local Knowledge


Presenter said:

In kicking-off the Word of Mouth Marketing Association’s WOMM-U Conference, Geoff Donaker, chief operating officer at Yelp, said, "The Genie is out of the bottle. You’re better off joining the conversation, than not." Conversations about local restaurants and businesses fuel Yelp’s business. Donaker described Yelp as, "local search powered by community."

It is the online community that provides Yelp with over 6-million reviews of local restaurants and businesses. 21-million people last month used Yelp to decide which restaurant to visit, car mechanic to use, and spa to be pampered at. With its broad reach and deep reviews, Yelp is changing the game of small business marketing.

Donaker told the story of a local carpet cleaner who used to spend $100K on yellow page advertising. Thanks to all the new business generated by positive reviews on Yelp, this carpet cleaner no longer spends money on yellow page advertising. Instead, this business is spending much of its advertising budget on improving it’s customer service, resulting in more positive reviews on Yelp.

Donaker also discussed how businesses have a love/hate relationship with customer-driven reviews. Businesses love how great customer service is rewarded with positive reviews. However, they hate the loss of message control. That said, the positive to negative review ratio at Yelp stands at 6:1.


Audience tweeted:

@ErikNYC mentioned the beauty of Yelp’s customer-driven model is that "when the customer wins, the business wins." Echoing sentiments from the presentation, @gamedayjreau tweeted, "It’s always about customer service at the end of the day."

In response to a case study example of how negative reviews can become positive for businesses, @leslieforde commented, "It’s worth engaging vocal customers gently. Reaching out to angry customers can change negative perception."


WOMMA says:

The love/hate relationship with customer-driven conversations is real. Word-of-mouth offline and online can not be controlled, only sparked. A business cannot ethically control what customers say about them. One of the best ways to spark word-of-mouth conversations is through delivering outstanding customer service and providing remarkable products.

For any business wanting to spark word-of-mouth conversations, it must first spend time and money to gain utmost confidence in their services and products. This confidence will give a business thick enough skin to withstand negative reviews as well as a solid foundation from which a virtuous cycle of positive reviews will fuel business growth.


LEARN MORE at WOMMA.org

The Designful Company

  • 4 Comments

... from the Post2Post tour highlighting THE DESIGNFUL COMPANY


Designful_image

Consider THE DESIGNFUL COMPANY from Marty Neumeier as a manifesto on building a company based upon the pillars of vision, culture, and innovation.

His earlier books, THE BRAND GAP and ZAG, were also manifestos. THE BRAND GAP discussed the importance of marketers and creatives working together within a company to bridge the gap between logic (marketing) and magic (design). ZAG expressed, in irrefutable fashion, how to best develop and apply differentiation strategies. Both books are brilliant.

And, THE DESIGNFUL COMPANY is also brilliant.

Neumeier makes a compelling case for “DESIGN” being more about performance than style. Being a designer, according to Neumeier, isn’t limited to being an artist, architect, composer, etc. Not at all. Anyone, and that means everyone, who tries to improve a given situation is a designer. Whenever you work through any creative process, you are doing design. Dig?

To give you some flavor for THE DESIGNFUL COMPANY, I designed a three-minute video ditty sharing smart tid-bits from the book. Enjoy…



RSS Readers ... click here to view the video.

Good Stuff from Tom Peters

  • 0 Comments

Tom Peters kickstarts our go-get'em engine that may be sputtering in today's tough economy with this excellent rant. It's a MUST-READ.

Below is a tease...

TomPetersWisdom_b
SOURCE: Dealing with Recessionary Times | TomPeters.com

salience AND sales

  • 8 Comments

In January, Hyundai did a major ZAG. Other car companies decided to play the “Zero Down. Zero % Financing.” card as well as the “Employee Discount for Everyone” card to rescue drowning sales. Hyundai didn’t. Hyundai zagged while others zigged.

Hyundai introduced an alternative marketing program that didn’t rely on the same easy credit, wallet-stretching gimmickry that got us in this current dismal economic mess.

Understanding the lack of confidence consumers have with their job stability, Hyundai created a marketing program to reduce the risk in buying a car. The program was called the Hyundai Assurance plan. Its mechanics were simple: if you lost your job after buying a new Hyundai, you could walk away from your loan or lease and return the car to Hyundai.

In marketing, salience occurs when a business designs a marketing program that connects emotionally and rationally with consumers. In business, sales occur when people buy stuff.

The beauty of the Hyundai Assurance marketing plan is in its salience and its sales. With a 10.0% unemployment rate on the horizon, it’s no secret people lack confidence about when their next paycheck is coming. Sales results of the Hyundai Assurance marketing plan are astounding.

Overall car sales in the United States have declined about 40% from the same time last year. (Yikes!) Hyundai car sales aren’t in decline. Nope. So far this year, Hyundai has recorded an increase of nearly 5.0% from the year prior.

As marketers, we must applaud Hyundai for designing an effective marketing program that drives both salience and sales.

SOURCE: New York Times Magazine article (Rob Walker) | March 22, 2009

Field Notes | SXSWi 2009

  • 6 Comments

Far too incomplete. Not enough context to fully digest. Way too inadequate. I know. I apologize. However, the following presentation shares some smart stuff I heard during SXSWi 2009. Other folks will give you more breadth and depth. I'm just giving ya snippets. Enjoy.

Mighty Fine Word-of-Mouth

  • 6 Comments

Recently Ben McConnell (Church of the Customer) shared his perspective on the distinction between Word-of-Mouth (WOM) and Buzz. (It’s a good read.)

His post rekindled some of my thoughts on Creationist WOM vs. Evolutionist WOM (video clip). The Creationist WOM marketing mindset is about making the marketing activity something to talk about as in attention-grabbing stunts and gimmicks. The Evolutionist WOM mindset is about making a company’s products, services, and or experiences worth talking about.

Creationist WOM marketers believe Word-of-Mouth just a marketing issue. While, Evolutionist WOM marketers believe Word-of-Mouth is an everyday business issue.

We’ve seen Creationist WOM theory at work recently with Denny’s stunt of giving away 2-million Grand Slam breakfasts for free and all the gimmicky commercials shown during the Super Bowl.

Specific instances of Evolutionist WOM theory at work are more difficult to notice. That’s because these marketing activities are not supposed to be easily noticed by customers. These activities are simply how a business does business. It’s less about marketing and more about how an interesting business operates everyday.

There’s a burger joint in Austin, TX that brilliantly practices Evolutionist WOM thinking — Mighty Fine Hamburgers.

No stunts. No gimmicks. No one-off marketing ploys. All Mighty Fine does is earn opinions by serving up remarkable burgers in remarkable ways.

Let me count some of these remarkable ways.
MightyFine_WOM


#1 – The Queue
Total cattle call. I’ve never been to Mighty Fine when the queue wasn’t at least 10 people deep. You go expecting to wait in line. Anticipation heightens the senses. Besides, long lines that move fast mean a restaurant is doing something right, right?

#2 – Fun Language
If you want Mustard, you gotta say, “Yeller.” “Red” gets you Ketchup and “White” gets you Mayonnaise. Mighty Fine could have gone the common, boring route with Mustard, Ketchup, and Mayonnaise. They didn’t. They decided to make the common uncommon. So uncommon that it’s worth talking about.

#3 – Service
Ask a Mighty Fine employee behind the counter how they’re doing and you’ll likely hear, “Mighty Fine.” They smile. They laugh. They look like they are having fun. Which all benefits the customer experience. Mighty Fine prides itself on hiring only “A Players” who are positive, supportive, and cooperative. To attract “A Players,” they pay above-average wages and offer much better than expected benefits. Mighty Fine knows by astonishing employees, they in turn, will astonish customers.

#4 – Assurance
When placing your order, the Mighty Fine employee writes all your requests directly on the bag. To close the order, the employee again goes over everything with you to best ensure you get exactly the burger you ordered. This process takes time but I’m sure it cuts down on mistakes. As a customer, I appreciate the thoroughness because it brings about assurance.

#5 – Picnic Tables
Old-school family-style picnic tables. Nothing fancy. Nothing fancy needed at a burger joint. This family-style seating makes it comfortable for all ages and helps to encourage conversations between customers from different parties.

#6 – Theater
Taking a page from Krispy Kreme's doughnut theater, Mighty Fine lifts the veil on some of their prep work. The window is wide open for everyone to see the ground chuck getting hand-formed into patties. The krinkle-cut fry cutter is always-on with an employee shooting whole potatoes down the cutting chute. The hamburger cooking and shake-making stations are just behind the counter for everyone to see. Mighty Fine has nothing to hide. It’s operations are in full view of every customer. (Unlike most burger joints.)

#7 – Quality
100% natural beef. Ground in-store. Hand-formed in-store. Fresh cut crinkle-cut fries. Sea Salt is the only salt used. Custom-made beef franks. Hand-dipped and hand-spun milkshakes. Quality is everything to Mighty Fine because they believe quality ingredients produce the tastiest food. (Hard to argue with Mighty Fine here.)

#8 – Smiles
Everywhere you look customers are having a good time. I’m a touch cynical; however, my cynicism subsides when inside Mighty Fine. A good hamburger in a family-friendly setting appeals to young, old, and everyone in-between. (Including this hardened marketer.)

#9 – Mighty Tasty
My Dad is a burger aficionado. In his nearly 75 years, Al Moore has cooked and eaten a lot of burgers. He’s burger expert if there could be one. After visiting Mighty Fine in January, he’s been talking about it with his circle of friends. I asked him what he tells people about Mighty Fine and this is what he says, “The place is awesome. Lots of production people, each knowing their job. The product is even more awesome — a top-notch hamburger. To my surprise, the family-style works. I’ll be back.” That’s one helluva endorsement.

#10 – Job Recruitment
Instead of a pamphlet by the soda machine to attract new hires, Mighty Fine uses a classic grocery store number dispenser like we used to use at the butcher counter. This dispenser is prominently located in the entry/exit way area for potential new hires to see going in and going out. A sign above the dispenser says, “Apply Now.” You pull the ticket and it directs you to a website to learn more information and to apply online. Again, Mighty Fine is simply making the common uncommon. Nice touch.

#11 – Clean Hands
It’s a “jacuzzi for your hands.” That’s what the hand washer says used at Mighty Fine. It’s the same hand washer employees use, so you know it is more sanitary than the common hand sink washer. Kids clamor to use this hand jacuzzi. Parents are always seen lifting up their kids in order for their hands to fit inside the washer. Of course, parents use it too because it’s just so unique you have to use it. Yet again … another way Mighty Fine takes something common and makes it so uncommon it's worth talking about.


Every one of these 11 examples are WOM-worthy. Each one showcases how Mighty Fine turns mundane business matters into something so special that they earn opinions from customers. Because these activities earn opinions, people talk. And because people talk, there is always a line at Mighty Fine. And because there is always a line, Mighty Fine has opened a second location.

Mighty Fine doesn’t need gimmicks to get customers talking. It just does business every day in such a way that people gladly talk about it.

Mighty Fine understands the importance of Word of Mouth. How do I know? This sign displayed in the exit way tells me...

MightyFine_knows_WOM

Riffing on a MarketingProfs Post

  • 6 Comments

Writing for the MarketingProfs blog, Ted Mininni posted his take on a recent McDonald’s ad for their McCafe coffee drinks. His post begins …

”Score one for McDonald’s... at the expense of Starbucks and all of the other high-brow coffee shops peddling pricey lattes, cappuccino, espresso and all manner of caffeinated concoctions.”

His post continues by declaring pretentious coffee is out and affordable coffee is in. Right on, I agree with his point given today’s dismal economy.

The comments to his post are lively and run wild. Definitely worth reading.

In the comments, Ted mentions how “Eight O'Clock beat out Starbucks. Go figure.” This triggered a long-dormant thought that is no longer dormant. Read below for my comment to Ted on this.


Ted … I gotta chime in again. You mentioned how 8 o’Clock Coffee beat Starbucks Coffee on taste. True. And Dunkin’ Donuts is touting the taste of its coffee is preferred over Starbucks. Yep. Got it.

Starbucks has never fared well in taste tests. That’s because the taste of Starbucks coffee is too polarizing. Many people say Starbucks coffee tastes too bitter, too burnt, too bold. Starbucks has always had a strong point-of-view about what coffee should taste like. That strong point-of-view about coffee has helped to build its brand.

In the book PURPLE COW, Seth Godin smartly writes … “In almost every market, the boring slot is filled. The product designed to appeal to the largest possible audience already exists, and displacing it is awfully difficult. The real growth comes with products that annoy, offend, don't appeal, are too expensive, too cheap, too heavy, too complicated, too simple — too something."

8 o’Clock Coffee makes boring coffee. Boring coffee is not going to annoy, nor will it offend people. Conversely, non-boring coffee will annoy and offend people. 8 o’Clock Coffee has never been a growth brand. Starbucks, with its non-boring taste profile, has been a growth brand. HAS BEEN, being emphasized.

I offer up that Starbucks has been slouching towards boring coffee for years. The biggest coffee push from the company recently has been behind Pike Place Roast. This is a mild coffee meant to appeal to the masses, which means it’s meant to be boring. Problem is, the Starbucks brand was built on strong, polarizing coffee … not boring coffee.

As Starbucks has grown to over 16,000 locations worldwide, it has tried to tone down its strong point-of-view on coffee in order to appeal to even more people. In my opinion, that’s hurt more than it has helped.

The company has abandoned its strong point-of-view about how “good” coffee should taste. This abandonment has wrecked havoc on its brand. In its attempt to appeal to everyone, Starbucks has lost those someones who enjoyed a coffee taste profile that isn’t watered down to a milder, more palatable and less offending taste.

Back in the day, the coffee Starbucks served earned an opinion from people because it wasn’t boring. These days, the company serves boring coffee (Pike Place Roast) and it no longer has a strong point of view about how good coffee should taste.

It’s my take … focusing on boring coffee has, more than the dismal economy, positioned Starbucks for the steep decline its experiencing.

The Marginalized will be Squeezed Out

  • 4 Comments

No matter how you look at it, these are tough times for retailers. High-priced and low-priced retailers have been thrown off-balance from the intense category five strength winds of this economic downturn.

It has been reported nearly 150,000 retail stores ceased operations in 2008. Projections say 78,000 retail stores will be shuttered in the first-half of 2009. Yikes.

To withstand these torrential winds, retailers are cutting costs by laying off employees, closing locations, and pruning any expense not directly related to sustaining business life.

Many retailers are on life-support, hoping for a swift uptick in consumer confidence to revive the health of their company. Some brands will not survive and some brands that will survive, may look and act totally different from what they once were. Unfortunately, some brands have already been declared dead.


They_All_Became_Marginalized

All of these brands have either disappeared, or are in the process of disappearing from today’s retail landscape.

To help bring understanding to this mess, I'm reminded of business wisdom from Peter Drucker

A Business that Fails to Lead Will Become Marginalized

Genuine market leaders, according to Drucker, must achieve their leadership results in an area that is meaningful to a customer or market. Such as, leadership in product development, leadership in customer service, leadership in distribution, or leadership in bringing ideas to market faster.

Achieving a leadership position is imperative for a business to stave off becoming marginalized or commoditized.

Drucker argues a business “… may seem to be a leader, may supply a large share of the market, may have the full weight of momentum, history, and tradition behind it. But the marginal is incapable of survival in the long run, let alone of producing profits. It lives on borrowed time. It exists on sufferance and through the inertia of others. Sooner or later, whenever boom conditions abate, it will be squeezed out.”

I love this thinking: Marginalized companies live on borrowed time and live through the inertia of others. When the economic winds change, the marginalized will be squeezed out.

The brands featured above share something in common, they all became marginalized in the marketplace and as a result, have been squeezed out.

The warning signs of becoming marginalized are clear:

When a business becomes an afterthought, not a forethoughtit becomes marginalized.

When a business fails to be included in a consumer’s consideration setit becomes marginalized.

When a business is viewed as dispensable, not indispensableit becomes marginalized.

When a business loses its uniquenessit becomes marginalized.

When a business no longer mattersit becomes marginalized.

When you, as a customer, would not miss the brand if it went out-of-businessit becomes marginalized.


The takeaway from all this is complicated: If a business cannot claim a leadership position, then it is either too small to meaningfully compete or too big to effectively compete. Failing to lead results in becoming marginalized. A marginalized company lives on borrowed time.

And time has run out for marginalized retailers like Circuit City, CompUSA, Mervyns, Bombay Company, etc.

Career Ponzi Schemes

  • 6 Comments

We’ve all become familiar with the $50-billion Bernard Madoff investment ponzi scheme. Through a mix of deft misdirection and communication savviness, Madoff was able to convince discerning clients his investment strategies consistently delivered high-returns. It was all a fraud.

The design of Madoff’s fraudulent plan was simple: he used new investments to pay existing investors. It was only when he couldn’t find new investors to pay off existing investors that his Ponzi scheme collapsed.

Reading Paul Williams’ post about Measuring Your Comparable Job Performance triggered an odd, but related, thought. There’s a different type of ponzi scheme that happens at large companies. It’s called the Career Ponzi Scheme. I’ve seen it happen, maybe you have too.

Do you work with someone who transitions into a different role within the company every year? Is this someone asked to lead high-profile projects, yet leaves the project before it’s implemented? And is this someone you’ve often wondered how they continue to have favorable sway with upper-management?

Chances are you’ve worked with someone like this.

This someone is using a Career Ponzi Scheme to advance their position within a company. These “Ponzi People” are savvy communicators, masterful at misdirection, and selectively connected.

Savvy communicators know what to say, when to say it, and whom to say it to. This talent works well in politically-charged and bureaucratic-heavy organizations.

Their misdirection mastery comes into play when something goes wrong with a project they are managing. To avoid scrutiny, “Ponzi People” deftly divert attention away from their mismanaged project to another person’s mismanaged project. They know exactly what to say, when to say it, and whom to say it to for corporate firefighters to swarm in and rescue someone else’s project. Misdirection complete. That is, until the next time they need to misdirect attention away from their poorly managed project.

“Ponzi People” are not the most well-connected. However, they are the most selectively connected people within an organization. Meaning, they purposely buddy-up to only those who are well-connected and on a career trajectory to the top of the org chart. They seek to have sway with only those who have sway. Dig?

Because they nurture their tight network of company influentials, “Ponzi People” are made aware of job opportunities in adjacent departments before anyone else. Through their savvy communication skills, “Ponzi People” position themselves as the best option for the open position.

People who use Career Ponzi Scheme tactics receive pay raises from frequent promotions and they receive the priceless veil of being a vital ingredient in the company’s success recipe.

However, they never benefit from measuring their comparable job performance because they never stay in the same role for more than a year. They laterally bounce from position to position too often to measure their year-over-year contribution to the company.

Eventually, “Ponzi People” get caught. Their Career Ponzi Scheme collapses when they fail to find new admirers with corporate sway to replace those old admirers who have caught on to their misdirection, smooth talking, and networking games. When this happens, their fraud is uncovered and their career freefalls.

The moral of this story is a warning … DO NOT GET CAUGHT IN A CAREER PONZI SCHEME. You are cheating yourself if you use ponzi schemes to advance your career. And if you are someone who enables a ponzi scheme to continue, then you are just cheating your company. Don’t do it.

Bad Apple Behavior

  • 8 Comments
Badapple_2

Can one person in a workplace ruin a workplace? In other words, can one bad apple spoil the whole bunch?

That’s the question Dr. Will Felps, Rotterdam Business School professor, sought to answer. His findings were published under the title of, How, When, and Why Bad Apples Spoil the Barrel. [preview available].

This American Life brought to life Felps’ work in a recent episode. It’s a fascinating piece, worthy of spending a few minutes listening to. (Listen here.)

The gist is this … Felps’ study indicates the spillover effect of Bad Apple behavior can undermine the success of a group. Groups in this study infected with a Bad Apple, performed 30%-to-40% worse than similar groups without a Bad Apple.

This study identified three personality types linked to Bad Apple behavior. I’m sure we’ve all experienced one of these personalities in our group project work:

1. THE JERK
This personality will make rude and insulting comments directed at others. He’ll criticize other people’s ideas without offering up alternative ideas of his own.

2. THE SLACKER
The attitude of indifference persists within this person. Verbally and non-verbally, he’ll convey feelings of “whatever” and “who cares.”

3. THE DEPRESSIVE PESSIMIST
The Debbie Downer of the group. This person will complain about how unenjoyable the project is and openly doubts the group will succeed.

(Interestingly, these represent some of the same destructive on-the-job personalities Dr. Bob Sutton wrote about in THE NO ASSHOLE RULE.)

What’s a group to do if they are burdened with a Bad Apple?

Sure, you could confront and try to reform the Bad Apple. However, a better approach could be to follow Jim Collins’ advice from BUILT TO LAST and have the virus, that is the miserable person, ejected before the spillover effect happens.


Mucho kudos to the My Curate's Egg blog for some super-sleuthing link finds.

The IDB Project | Chapter 15

  • 2 Comments

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


Idb_15_2

CHAPTER FIFTEEN
A Short Course on Innovation

“Tomorrow always arrives. It is always different. And then even the mightiest company is in trouble if it has not worked on the future.”Peter Drucker

Peter Drucker infused all his teachings with thoughts of tomorrow and change. As we learned earlier, any decision gets old the second it gets made. And, as managers, we are “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.” (MANAGING FOR RESULTS, 1964)

If we are to believe Drucker, which we should, the purpose of a business is to create a customer. And since a customer is always changing their needs and wants, a business must always evolve to deliver upon the needs and wants of a customer. Making changes to better appeal to customer is INNOVATION.

Providing more desirable products, services, and customer experiences is vital to the continued existence of any business. And that is INNOVATION.

However, complacency of any degree will stifle the ability of a business to innovate. And, fostering an insular corporate culture that thinks and acts more for the company than for the customer, will also cripple innovation.

With the publication of THE PRACTICE OF MANAGEMENT in 1954, Peter Drucker outlined a recipe for business innovation that is still relevant and actionable. This recipe involves answering three questions, which “will provide the foundation upon which goals, objectives, and strategies can be formulated.

Question #1: “What is our business?"

Question #2: “What will our business be?”

Question #3: “What should our business be?"

Regularly asking and answering these three questions will spark important conversations about the purpose of your business. It will also keep your business laser-focused on the reason your business exists: to create a customer.

After all, if your business is not innovating to better appeal to customers tomorrow, then your business starts dying today.


This concludes The IDB Project. (Phew. Thanks for reading.)

The IDB Project | Chapter 14

  • 0 Comments

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


Idb_14

CHAPTER FOURTEEN
The Leader’s Most Important Job

“The most important task of an organization’s leader is to anticipate crisis. Perhaps not to avert it, but to anticipate it. To wait until the crisis hits is already abdication.”Peter Drucker

In MANAGING THE NON-PROFIT ORGANIZATION (1990), Peter Drucker wrote in-depth how “leadership is a foul-weather job.” Meaning, a leader must be “capable of anticipating the storm, weathering it, and being ahead of it." To Drucker, when a leader successfully guides the business out of foul-weather situations, the result is “innovation, constant renewal.”

According to Drucker, managers need four leadership skills to effectively guide a business out of foul-weather.

The first skill is “the willingness, ability, and self-discipline to listen.”

Second is having the patient fortitude to over-communicate to ensure everyone understands what is happening when and why during a crisis.

The third leadership trait managers must have is to insist on perfect execution, yet have the ability to take responsibility for when imperfection happens.

Fourth is to never lose sight of “how unimportant you [the leader] are to the task.” A leader’s job is to serve his company and his team. Their job is never to serve themselves.


Next, Chapter FIFTEEN of the The IDB Project.

The IDB Project | Chapter 13

  • 2 Comments

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


Idb_13

CHAPTER THIRTEEN
The Fourth Information Revolution

“For top management tasks, information technology so far has been a producer of data rather than a product of information—let alone a producer of new and different questions and new and different strategies.”Peter Drucker, Forbes ASAP article (1998)

Jeffrey Krames expertly chronicled Peter Drucker’s evolving opinion on the importance of computer-driven information within a business. As a business consultant for nearly six decades, Drucker experienced the technology revolution from mainframes to personal computers to the Internet to Google. Just as the technology evolved, so did Drucker’s opinion.

1954 | THE PRACTICE OF MANAGEMENT
“Each manager should have the information he needs to measure his own performance and should receive it soon enough to make any changes necessary for the desired results.”

1967 | THE EFFECTIVE EXECUTIVE
“The computer, being a mechanical moron, can handle only quantifiable data.”

1973 | MANAGEMENT: Tasks, Responsibilities, Practices
“When the new computer arrives, a frantic search begins to find things for it to do. In the end, it is being used to turn out endless reams of information that nobody wants, nobody needs, and nobody can use. Keeping the tool going becomes and end. As a result, nobody has information.”

1999 | Beyond the Information Revolution (Atlantic Monthly article)
“The truly revolutionary impact of the Information Revolution is just beginning to be felt. But it is not ‘information’ that fuels this impact. It is not "artificial intelligence." It is not the effect of computers and data processing on decision-making, policymaking, or strategy. It is something that practically no one foresaw or, indeed, even talked about ten or fifteen years ago: e-commerce—that is, the explosive emergence of the Internet as a major, perhaps eventually the major, worldwide distribution channel for goods, for services, and, surprisingly, for managerial and professional jobs.”

Clearly, Drucker was a strong believer in giving employees access to information. Yet, he was skeptical about having technology interpret data (information). He also warned as technology advances, employees are given access to an ever-increasing amount of information — maybe too much information.

Drucker was a strong believer in making decisions. Unfortunately, the abundance of information can inhibit decision-making and lead to analysis by paralysis. As we learned earlier, Drucker was all about making decisions to the extent that failure to make a decision is worse than making the wrong decision.

While Peter Drucker was skeptical about the reliance of technology for decision-making purposes, he was a strong proponent of using technology to revolutionize how companies ultimately connect with customers.


Next, Chapter FOURTEEN of the The IDB Project.

The IDB Project | Chapter 12

  • 0 Comments

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.

The IDB Project | Chapter 11

  • 1 Comments

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


Idb_11

CHAPTER ELEVEN
Life-and-death Decisions

“Without a decision maker, you’ll never make a decision.”Peter Drucker

Peter Drucker stressed the importance of leadership within an organization because, without leadership, too much dithering and not enough decision-making would happen. In Drucker’s words, not making a decision “is as long-lasting in its consequences or as difficult to unmake.”

A company has life-and-death decisions to make every day. These life-and-death decisions concern people and priorities.

People Decisions
Whom to hire, fire, and promote rank as the most important of all decisions a company can make. Courage, character, discipline, and confidence are some of the qualities Drucker believe great employees should possess. (For more qualities, re-read Ch. 9 of The IDB Project.)

Peter Drucker emphatically contended, “Any manager or individual who does not perform at a high level should be removed.” He had little patience for holding onto to under-delivering employees because ultimately, their under-delivering will negatively impact the long-term prosperity of the business.

Interestingly, Drucker has a unique take on whom to promote. “I would never promote a man into a top level job who had not made mistakes, and big ones at that. Otherwise he is sure to be mediocre.” (THE PRACTICE OF MANAGEMENT, 1954)

Priority Decisions
In MANAGING FOR RESULTS (1964), Drucker explained, “Economic results require that staff efforts be concentrated on the few activities that are capable of producing significant business results. Managers must minimize the amount of attention devoted to products which produce primarily costs.”

Drucker preached a business is more effective when it is more selective. While not a mantra of his, “Fewer. Bigger. Better.” sums up Drucker’s thinking. Meaning, it is critical for companies to focus on fewer priorities designed to have bigger impact to deliver better results.


Next, Chapter TWELVE of the The IDB Project.

The IDB Project | Chapter 10

  • 0 Comments

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


Idb_10_3

CHAPTER TEN
Drucker on Welch

"Jack Welch was, in many ways, a natural … Welch’s greatest strength is his ability to ask what needs to be done, to focus on priorities, and delegate everything else.”Peter Drucker

Simply put ... Peter Drucker had a MAJOR man-crush on Jack Welch.


Next, Chapter ELEVEN of the The IDB Project.

The IDB Project | Chapter 9

  • 3 Comments

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


Idb_9

CHAPTER NINE
The Critical Factor

“Leadership is not magnetic personality … it is not ‘making friends and influencing people’—that is salesmanship.”Peter Drucker

Peter Drucker clearly delineated the difference between being a leader and being a manager. He famously riffed, “Management is doing things right; leadership is doing the right things.” The right things for a leader to do, according to Drucker, include these ideals:

1. Courage with Character
It takes courage to practice “purposeful abandonment." It also takes character to make connections with people who are genuine and compassionate. Natural leaders do both.

2. Articulate a Clear Mission
“The foundation of effective leadership is thinking through the organization’s mission, defining it, and establishing it clearly and visibly. The leader sets the goals, sets the priorities, and sets and maintains the standards.” (THE ESSENTIAL DRUCKER, 2001)

3. Foster Loyalty
A leader must be worthy of receiving loyalty. To be so worthy, Drucker maintains leaders must set their standards high and always live by those high standards. When loyalty is fostered throughout a business, employee morale increases as does employee effectiveness.

4. Make Strengths Stronger
“Nothing destroys the spirit of an organization faster than focusing on people’s weaknesses rather than on their strengths, building on disabilities rather than on abilities. The focus must be on strength.” (THE PRACTICE OF MANAGEMENT, 1954)

5. Hire People Smarter than You
Ineffective leaders worry about their direct reports usurping them. Effective leaders don’t. Effective leaders encourage their direct reports to assume greater responsibility and to make more meaningful contributions to the business. Effective leaders measure their success by the success achieved of the people s/he hires, manages, and promotes.

6. Earn Trust
”To trust a leader is not to necessarily like him. Nor is it necessary to agree with him. Trust is the conviction a leader means what he says. It is a belief in something very old-fashioned, called ‘integrity.’” (THE ESSENTIAL DRUCKER, 2001)

7. Develop People
Peter Drucker understood no business will survive if it is lead by only one leader. A thriving organization needs leaders throughout and not just at the helm. According to Drucker, “The gravest indictment of a leader is for the organization to collapse as soon as he leaves or dies.”


Next, Chapter TEN of the The IDB Project.

The IDB Project | Chapter 8

  • 5 Comments

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


Idb_8

CHAPTER EIGHT
Auditing Strengths

“Most organizations take their employees’ strengths for granted and focus on minimizing their weaknesses. They [identify] ‘skill gaps’ or ‘areas of opportunity,’ and then pack them off to training classes so that weaknesses can be fixed. But this isn’t development, it is damage control. And by itself damage control is a poor strategy for elevating either the employee or the organization to world-class performance.”Marcus Buckingham & Donald Clifton (2001)

Psst … decades before Marcus Buckingham became the poster child for “building upon strengths, not weakness,” Peter Drucker heralded the cause. In THE PRACTICE OF MANAGEMENT (1954), Drucker actually launched the strengths movement by writing:

“Nothing destroys the spirit of an organization faster than focusing on people’s weaknesses rather than on their strengths, building on disabilities rather than on abilities. The focus must be on strength.”

“One can only build on strength. One can achieve only by doing. Appraisal must therefore aim first and foremost on bringing out what a man can do … a man should never be appointed to a managerial position if his vision focuses on people’s weaknesses rather than on their strengths.”

“One cannot do anything with what one cannot do. Once cannot achieve anything with what one does not do … Appraisal must therefore aim first and foremost on bringing out what a man can do.”

Drucker revisited the concept of strengths-based development with a must-read Harvard Business Review article (MANAGING ONESELF, 1999). He updates his stance by writing:

“Most people think they know what they are good at. They are usually wrong. More often, people know what they are not good at - and even then more people are wrong than right. And yet, a person can perform only from strength. One cannot build performance on weaknesses, let alone on something one cannot do at all.

“Waste as little effort as possible on improving areas of low competence. It takes far more energy and far more work to improve from incompetence to low mediocrity than it takes to improve from first-rate performance to excellence.”

Also in MANAGING ONSELF, Drucker explains how “measuring feedback analysis” is the best way to discover your strengths. He encourages executives to, at the time they make a key decision, write down the expectations they hope come from that decision. Then after nine or twelve months, compare the actual results with the written-down expectations. It’s a process that worked for Drucker to identify areas he excelled and areas where he struggled to meet expectations.

From my experience
, a more scientific way to identify one’s strengths is to use the StrengthsFinder test from Gallup. This online test formed the basis for NOW, DISCOVER YOUR STRENGTHS (2001) and for Tom Rath’s STRENGTHSFINDER 2.0 (2007).


Next, Chapter NINE of the The IDB Project.

The IDB Project | Chapter 7

  • 1 Comments

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


Idb_7

CHAPTER SEVEN
Abandon All But Tomorrow

“The first step in a growth policy is not to decide where and how to grow. It is to decide what to abandon. In order to grow, a business must have a systematic policy to get rid of the outgrown, the absolute, [and] the unproductive.”Peter Drucker

Peter Drucker preached “purposeful abandonment.” He felt the best way for a company to grow is to first stop doing what’s not working. That is, abandon projects that fail to deliver results. Abandon products that fail to increase profit. And abandon people that fail to make worthwhile contributions to the company.

Drucker’s “purposeful abandonment” is very similar to Jim Collins’ “Stop Doing List” concept.

In GOOD TO GREAT, Collins brought renewed relevance to “purposeful abandonment” by giving it a catchy name — Stop Doing List. Collins writes, “Take a look at your desk. If you're like most hard-charging leaders, you've got a well-articulated to-do list. Now take another look: Where's your stop-doing list?” [source]

Collins continues, “Those who built the good-to-great companies, however, made as much use of ‘stop doing’ lists as ‘to do’ lists. They displayed a remarkable discipline to unplug all sorts of extraneous junk.” [source]

For sound advice on what to include in a “Stop Doing” list, we look to Peter Drucker. In MANAGEMENT CHALLENGES FOR THE 21st CENTURY (1999), Drucker shared, “If what looks like an opportunity does not advance the strategic goal of the institution, it is not an opportunity. It is a distraction.” Both Drucker and Collins agree, distractions must be avoided.


Next, Chapter Eight of the The IDB Project.

The IDB Project | Chapter 6

  • 3 Comments

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


Idb_6

CHAPTER SIX
The Jeffersonian Ideal

“Everybody from the boss to the sweeper must be seen as equally necessary to the success of the common enterprise.”Peter Drucker

Beginning with CONCEPT OF CORPORATION (1946) and continuing with THE PRACTICE OF MANAGEMENT (1954), Peter Drucker shared his belief in the Jeffersonian Ideal of equality and empowerment for all employees.

It’s hard for us to believe treating employees as valuable assets (not dehumanized cogs) and giving them the responsibility to make decisions are revolutionary business concepts. But they were when Drucker began writing about business management matters in the 1940s.

In MANAGEMENT: Tasks, Responsibilities, Practices (1973), Drucker shared how he learned lower-level employees were more knowledgeable and competent than senior-level management gave them credit. During World War II, Drucker was conducting research inside a corporation. He was unable to talk with many management-level employees because a lot of them were serving in World War II. Instead, Drucker had to rely on lower-level employees for information. He learned the average worker was smarter and better adjusted than previously thought.

For decades, Drucker trumpeted the importance of engaging and empowering the “knowledge worker.” He viewed corporations as social institutions, not nameless and soulless assembly lines. His writings routinely argued the needs, goals, and strengths of individual employees had to be addressed by corporations. And, corporations needed “to be organized so as to bring out the talents and capacities within the organization.”


Next, Chapter Seven of the The IDB Project.

The IDB Project | Chapter 5

  • 0 Comments

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


Idb_5

CHAPTER FIVE
When Naturals Run Out

“When you need large numbers of talented managers, you have to convert management into something that can be learned or taught.”Peter Drucker

Peter Drucker used the word “natural” to signify a superstar manager. He shared an interesting story with Jeffrey Krames which explains why he used “natural” to mean star performer.

In an interview with Krames, Drucker talked about how, before corporations ruled business, family businesses were the leading businesses. And, family businesses were naturally managed by family members. Drucker said the best of these family managers were “naturals.”

However, at some point, the family business would run out of “naturals” and they would need to look outside the family for managers. A process was needed “… that could transform non-naturals into competent managers.” Thus, making the matter of finding, training, and developing managers a critical business discipline.

Throughout his career, Drucker shared lots of ideas on what makes someone a natural manager.

For example, people who can hire and fire employees without getting emotionally involved are “naturals.” Those who can effectively manage their time to focus supremely on just one or two priorities at a time are “naturals.” People who can make difficult decisions and ask difficult questions at the most opportune time are “naturals.” And, “Naturals” know it is their responsibility to foster a positive and welcoming corporate culture.


Next, Chapter Six of the The IDB Project.

The IDB Project | Chapter 4

  • 0 Comments

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


Idb_4

CHAPTER FOUR
Outside-In

“The executive is within an organization. Every executive … sees the inside—the organization—as close and immediate reality. He sees the outside only through thick and distorting lenses, if at all. What goes on outside is usually not even known firsthand. It is received through an organizational filter of reports, that is, in an already predigested and highly abstract form.”Peter Drucker

Peter Drucker warned businesses about the dangers of developing an insular corporate culture. The business reality is, many executives lose perspective of what matters most and fall victim to fire-fighting inconsequential issues rather than addressing fundamental business issues that impact attracting, retaining, and growing customers.

In MANAGING FOR RESULTS (1964), Drucker outlined eight business realities managers must address to develop a customer-driven outside-in perspective.

1. Only Cost Centers Exist Within a Business
Employees do not create sales. Products do not create sales. Processes do not create sales. Only customers create sales. Every department inside a business is a cost center and not a profit center. Drucker says, “It is always somebody outside who decides whether the efforts of a business become economic results or whether they become so much waste and scrap.”

2. Solving Problems Solves Little
Jeffrey Krames summarizes Drucker’s wisdom by writing, “Solving problems can only return the organization to its prior status quo. To achieve results managers must exploit opportunities.” Constantly fire-fighting problems will never allow a company to grow. It is only by finding and taking advantage of opportunities that causes a company to grow.

3. Effectiveness is Better than Efficiency
Drucker once said, “Efficiency is doing things right; effectiveness is doing the right things.” And, Drucker also said, “Doing the right thing is more important than doing the thing right.” Enough said.

4. A Business that Fails to Lead Will Become Marginalized
Genuine market leaders, according to Drucker, must achieve their leadership results in an area that is meaningful to a customer or market. Such as, leadership in product development (think Apple), leadership in customer service (Container Store), leadership in distribution (Wal-Mart), or leadership in bringing ideas to market faster (Zara).

Achieving a leadership position is imperative for a business to stave off becoming marginalized or commoditized. Drucker argues a business “… may seem to be a leader, may supply a large share of the market, may have the full weight of momentum, history, and tradition behind it. But the marginal is incapable of survival in the long run, let alone of producing profits. It lives on borrowed time. It exists on sufferance and through the inertia of others. Sooner or later, whenever boom conditions abate, it will be squeezed out.”

5. Market Leadership is a Temporary Condition
The reality is simple: a business must not become secure in its leadership position. Customers change and markets change. Businesses that fail to adapt to the ever-evolving marketplace will lose their leadership position. Drucker says its normal for businesses “to drift from leadership to mediocrity.” Given this reality, Drucker urges executives to “reverse the normal drift” by focusing the business ”on opportunity and away from problems, to re-create leadership and counteract the trend toward mediocrity, to replace inertia and its momentum by new energy and new direction.” source

6. Decisions Age Quickly
Drucker once wrote, “Any human decision or action starts to get old the moment it has been made.” So true, and so very applicable to business. The job of a manager, then, 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.”

7. Misallocation of Resources is Certain to Happen
Drucker contends too many employees are misallocated and required to work on “yesterday” projects and “yesterday” programs that will not result in helping a company achieve market leadership today. He claims executives, working under ”managerial vanity,” are so desperate to turnaround poor-performing products and programs that they allocate resources to solve problems rather than to find new opportunities.

To combat this misallocation reality, Drucker recommends “constant reappraisal and redirection” of resources to improve the effectiveness of a business.

8. A Business is More Effective When it is More Selective
Businesses try too accomplish far too much. They lose concentration and give in to the temptation of being all things to all people. Drucker asserts, “Economic results require that staff efforts be concentrated on the few activities that are capable of producing significant business results. Managers must minimize the amount of attention devoted to products which produce primarily costs.”


Next, Chapter Five of the The IDB Project.

The IDB Project | Chapter 3

  • 0 Comments

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


Idb_3

CHAPTER THREE
Broken Washroom Doors

“Every business has its ‘broken washroom doors,’ its misdirections, its policies, procedures, and methods that emphasize and reward wrong behavior, penalize or inhibit right behavior.”Peter Drucker

No business is perfect. Every business has flaws. Peter Drucker calls these flaws “broken washroom doors.” Obviously, in order for a business to achieve sustained success, it must minimize flaws that “reward wrong behavior” and “inhibit right behavior.”

By 1990, Drucker had turned much of his attention to helping non-profit businesses succeed. He was disenchanted with for-profit businesses because he felt the compensation system had evolved into a broken washroom door.

Drucker strongly believed executives were being wrongly rewarded with excessive stock options and sky-high salaries. He reasoned stock options are inappropriate compensation because they gave executives the incentive to manage for immediate results and not for long-term results. Drucker also bemoaned the escalating pay rate for CEOs. In 2006, the average salary of CEO from an S&P 500 company was 364 times greater than the pay of an average employee [source]. Drucker felt CEO pay should not exceed 20 times the average employee.

According to Drucker, another broken washroom door are the mission statements that attempt to give companies focus. Drucker says, “Mission statements have to be operational; otherwise, it’s merely good intentions.” The more specific a company’s mission statement, the easier it will be to have employees focused on making a worthwhile contribution.

The tendency to burden employees with an array of priorities becomes another broken washroom door. Drucker long-advocated assigning managers no more than two priorities. From his experience, he learned no manager could expertly deliver upon more than two priorities at any given time.


Next, Chapter Four of the The IDB Project.

The IDB Project | Chapter 2

  • 3 Comments

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


Idb_2

CHAPTER TWO
Execution First and Always

“Management must always, in every decision and action, put economic performance first. It can only justify its existence and its authority by the economic results it produces.”Peter Drucker

Larry Bossidy and Ram Charan wrote the best-selling business book, EXECUTION: The Discipline of Getting Things Done (2002). As Jeffrey Krames points out, “Execution” was a concept Peter Drucker wrote about extensively and much of the Bossidy/Charan book is a rehash of earlier Drucker writings.

Peter Drucker failed to give his concepts catchy names. Instead, he was more concerned about bringing new and worthwhile business concepts to light. Drucker wrote extensively about “execution” … he just didn’t call it that.

Krames summarizes Drucker’s thoughts on execution by sharing six ways managers fail to execute consistently.

1. Failure to Abandon Bad Projects
Drucker once said, “There is nothing so useless as doing efficiently that which should not be done at all.” He was a strong believer in having managers conduct regular performance reviews of products. And an even stronger believer in abandoning projects that fail to meet objectives.

2. Too Much Management Bureaucracy
Having to navigate through unnecessary corporate red tape will stifle the ability of any manager to execute upon good ideas.

3. Poorly Defined Objectives and Business Values
Effective and efficient execution is helped greatly when a business outlines clear project objectives and when the values of a business are not just articulated, but lived.

4. Inappropriate Management Structure
“The right [management] structure does not guarantee results. But the wrong structure aborts results and smothers even the best direct efforts.” (MANAGING FOR RESULTS (1964), Peter Drucker)

5. Poorly Communicated Strategies
If employees do not understand how their individual contributions fit into the overall company strategy, execution will suffer.

6. Not Embracing a Customer-First Point-of-View
In THE PRACTICE OF MANAGEMENT (1954), Drucker wrote, “There is only one valid definition of business purpose: to create a customer.” Companies that embrace and foster an insular corporate culture will result in having employees lose focus of what matters most — the customer.


Next, Chapter Three of the The IDB Project.

The IDB Project | Chapter 1

  • 1 Comments

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


Idb_1_3

CHAPTER ONE
Opportunity Favors the Prepared Mind

“Opportunity favors the prepared mind. If opportunity knocks at the door you have to open it. You have to be receptive to it and I was.”Peter Drucker

Peter Drucker opened the door of opportunity in 1943 when he was asked by General Motors to conduct a study of the company’s management system. At the time, Drucker was a professor of politics and philosophy at Bennington College (Vermont).

He had come to the United States six years earlier from Austria after earning a doctorate degree in public/international law (University of Frankfurt, 1931) and spending a few years as newspaper reporter (The Austrian Economist and Daily Frankfurter). He wrote two books during this time, The End of Economic Man (1939) and The Future of Industrial Man (1942). Drucker’s business experience was limited to short stints as an investment banker and economist in Europe.

While at Bennington College, Drucker was interested in studying the inner-workings of a large corporation. However, no corporation was willing to allow Drucker internal access for such an in-depth study. That is, until the serendipitous phone call from General Motors.

Drucker was prepared for this opportunity and the resulting work, CONCEPT OF CORPORATION (1946), changed the game of business management.

The concept of managing a corporation had always been about top-down decision-making from senior-level executives. After studying General Motors, Drucker learned to believe decentralized decision-making was the recipe for sustained success. He argued employees needed to be viewed not as dehumanized costs, but rather as valuable assets. Drucker went further by writing that employees should be given more responsibility to make decisions in order to create a “self-governing plant community.”

The CONCEPT OF CORPORATION was written over 60-years ago, but its impact can still be felt today. It took a few decades, but by the 1980s, the majority of Fortune 500 companies had implemented some form of decentralized decision-making.


Next, Chapter Two of the The IDB Project.

The IDB Project | in full detail

  • 1 Comments
Insidedruckersbrain_cover_3

Jeffrey Krames has written a remarkable book titled, INSIDE DRUCKER'S BRAIN. In it, Krames shares Peter Drucker's best management ideas and updates the relevancy of these ideas for today's marketplace. Krames had a lot of material to work with — Peter Drucker, in his six decades career as a teacher, author, and consultant, wrote nearly 40 business books and countless articles.

The impact of Peter Drucker's influence cannot be understated. He's viewed as "The Man Who Invented Management" by the likes of Jack Welch, Tom Peters, and Jim Collins. But Collins has gone beyond just calling Drucker "the leading founder of the field of management." He has also said Drucker's "primary contribution is not a single idea, but rather an entire body of work that has one gigantic advantage: nearly all of it is essentially right." (Whoa.)

Long-time Brand Autopsy readers know I'm a business book junkie. My appetite for biz books stands on the verge of being insatiable. However, I've never been able to fully appreciate Peter Drucker's business writings. I've always found Drucker's books a touch too unapproachable. I get lost in the densely simple language and the dusty examples used in such classic Drucker books like: THE PRACTICE OF MANAGEMENT (1954), MANAGING FOR RESULTS (1964), and THE EFFECTIVE EXECUTIVE (1966).

The beauty of INSIDE DRUCKER'S BRAIN is Krames updates the language and adds modern context to provide clarity and acuity to Drucker's classic writings. (Krames did a brilliant job!)

For two weeks in December 2008, the Brand Autopsy blog shared summaries, snippets, and takeaways from INSIDE DRUCKER'S BRAIN in a series of posts called ... The IDB Project.

Idb_explained_2

Below is a jump list of each post:

CHAPTER ONE
Opportunity Favors the Prepared Mind (Dec. 9)


CHAPTER TWO
Execution First and Always (Dec. 10)
CHAPTER THREE
Broken Washroom Doors (Dec. 11)
CHAPTER FOUR
Outside-In (Dec. 12)
CHAPTER FIVE
When Naturals Run Out (Dec. 15)
CHAPTER SIX
The Jeffersonian Ideal (Dec. 15)
CHAPTER SEVEN
Abandon All But Tomorrow (Dec. 16)
CHAPTER EIGHT
Auditing Strengths (Dec. 16)
CHAPTER NINE
The Critical Factor (Dec. 17)
CHAPTER TEN
Drucker on Welch (Dec. 17)
CHAPTER ELEVEN
Life-and-death Decisions (Dec. 17)
CHAPTER TWELVE
The Strategic Drucker (Dec. 18)
CHAPTER THIRTEEN
The Fourth Information Revolution (Dec. 18)
CHAPTER FOURTEEN
The Leader's Most Important Job (Dec. 18)
CHAPTER FIFTEEN
A Short Course on Innovation (Dec. 19)

Marketing During this Dismal Economy

  • 8 Comments

I couldn't agree more with Neal Stewart's advice, which includes ... "Find ways to engage in conversation with your heavy users and fanatical consumers. More than ever, your brand’s stalkers are going to help you spread the word."

As we marketers know, it is far less expensive to market to current customers than it is to acquire new customers ... especially during this dismal economy.

Eric Schmidt on Google being Frugal

  • 3 Comments

Business at Google is healthy. However, in these uncertain times Google is watching its expenses and is getting downright frugal by tightening some of its famed employee perks (free food, free massages, etc.).

The New York Times ran an interesting interview with Eric Schmidt (Google CEO) where he comments on managing the company during this economic avalanche. He was asked if it is enjoyable to manage a company on a spending diet. His answer may surprise you...

Nytimes_ericgoogle_2
SOURCE | Google at 10: Searching Its Own Soul

>