Basic Principles for Managing

December 13, 2007

I've been reading a lot of Peter Drucker's books lately. I was looking for some basic principles to serve as a guide when making managerial decisions.

Think how useful it would be to have such a guide. Let's say you're hiring a new person and the decision is between two equally qualified individuals. Which one should you choose? Or alternatively, suppose you're trying to decide on an incentive program for your workers. You could just pull out the list, read it over and know instantly which course of action to take.

I began by looking through several textbooks on management, figuring I could quickly locate a few general principles. To my surprise, I couldn't find any. A similar search of current popular books on management also turned up nothing authoritative. Then I happened to pull an old book by Drucker off my bookshelf where it had been sitting for years and began reading. Wow. That's where I should have started all along.

Peter Drucker, of course, is the legendary management guru, some refer to as the father of management. His books - some of which were written more than forty years ago - are still right on target today and probably the best source of management advice you can find anywhere.

Drucker himself didn't like the term management "principles." He said that because humans are fallible, so are any principles they might invent. He preferred to call them "rules of thumb," implying that they are merely guidelines, subject to interpretation, and certainly not cast in stone. Still, a principle to me is a statement about what should be done or what seems to be true based on what we know, even if the statement is unprovable. And his books are filled with such statements.

While this is by no means an attempt to summarize his work, I did find what I was looking for - some basic "rules of thumb" that could serve as a useful guide to help managers make good decisions or take the right action in most instances.

They are grouped into four themes: Performance, People, Innovation, and Character.

• What matters most in any organization is performance. It is the manager's job - in fact it is everyone's job - to contribute to the overall success of the organization. Managers, teams, and individuals should be judged solely on what they contribute to the organization.
   
• The manager's performance should not be judged by personality, style, or approach. There is no one best way to manage. Many different management styles or approaches can work. The important point is whether the manager is effective in obtaining the desired results.
   
• Also, a person's performance should not be measured by how hard they work. We have all known people who worked long hours or were extremely busy, but had few results to show for their efforts. It is results that count.
   
• When hiring or promoting people, selection should be based on a person's strengths, not their weaknesses. Every person has both strengths and weaknesses; no one is perfect. Therefore, the question should be which one can contribute the most to the team or organization.
   
• Both short-term and long-term results have to be taken into account. The ultimate goal is the long-term success of the organization. However, as Drucker points out if short-term needs are not met the organization may not still be around to worry about the long-term needs.
   
• In a team, everyone contributes. If one person isn't contributing, then it's not a team.
   
• Performance is learned behavior. Anyone can learn to be more effective if they are committed to learning and self-development.
   
• There is no such thing as a right or wrong decision. There are only decisions that get results and ones that don't.

• An organization is only as good as its people. Organizations with talented people are more likely to succeed than organizations with less talent.
   
• Therefore, managers should devote more time and attention to decisions about people - hiring, promotion, and evaluation - than any other decision.
   
• When hiring people, managers should not rely on their instincts because instincts are not reliable. Instead they should follow a process and look for the person who can make the greatest contribution to the team and to the organization.
   
• The effectiveness of a person often depends on how well the person is matched with the job. If there is a poor match, it is the manager's responsibility to either modify the job or remove the person.
   
• People are a resource, to be developed. It is the manager's responsibility to ensure that people are given training and opportunities to develop.
   
• It is the manager's responsibility also to ensure that workers have sufficient tools and resources to perform well.
   
• Successful organizations create an environment that attracts the most talented people.

• Every organization has to be good at one thing: innovation. Drucker believed that organizations have to innovate or they die. Change is inevitable and the most successful organizations are the ones that embrace change and look for opportunity in it.
   
• It is the manager's responsibility to constantly find new and better ways of doing things. Drucker suggested that managers maintain a record of their innovations and score themselves on their innovation performance.
   
• Innovations should not be limited to work processes, but extend as well to work other areas, such as alternate work arrangements, recruiting methods, reward structures, and so on.
   
• Managers should stay current with workplace and employment trends and other trends outside the organization and adapt internal processes to adapt to them.
   
• Likewise, managers should keep current with advances in technology and look for ways to apply them.
   
• Innovation always involves risk. Therefore, managers should not be afraid to try new things. They must be entrepreneurial.
   
• One way to innovate is to discard old practices that no longer get the same results. Drucker called this "creative destruction."
   
• Innovation also applies to personal effectiveness. Managers should constantly ask themselves what they could do better?
   
• Strength is the greatest source of opportunity for an organization or for an individual. Ask yourself, what are you really good at?

• The most important quality in people is integrity. As Drucker noted, people can be forgiven for many shortcomings including a lack of intelligence, a lack of initiative, and lack of social graces. But they will not be forgiven for lacking integrity.
   
• Managers demonstrate character through leadership and by setting an example for all others to emulate.
   
• A lack of character is not something a person can hide for very long. It only takes a short period of time for others can see whether or not a person has good character.
   
• Integrity means accepting the truth. Managers shouldn't discourage people from speaking their mind. In Drucker's words, managers shouldn't focus so much on "who is right" as on "what is right."
   
• Integrity means accountability. It means taking responsibility for one's own actions.
   
• Integrity means being conscientious. It means setting high standards for one's own work.
   
• Character should be the central focus in every people decision, including hiring, promotions, and evaluations.

Peter Drucker wrote over 30 books and countless number of articles in a remarkable career that spanned over sixty years. He was the first to define management as concept and a profession, nearly fifty years ago and was the first to write about - and in fact coined the term - "knowledge worker." A person of integrity, he continued to contribute to society and to innovate until his death in late 2005 at the age of ninety-five.

My favorite books by Drucker are The Effective Executive and Management: Tasks, Responsibilities, and Practices. The Management book contains over 800 pages and I learned something new on every page.

If you don't already own one of Drucker's books and would like a good snapshot, the book Classic Drucker is a great source. It consists of a collection of his articles published in the Harvard Business Review.

And if you're looking for a good holiday gift idea for a manager, consider The Daily Drucker: 366 Days of Insight and Motivation for Getting the Right Things Done. The was one of his last books published. It's a collection of ideas and insights - one for each day of the year. This gem of a book can be found in the Management section in most bookstores.

Have a wonderful holiday season,

Stephen K. Foster
Canopy Software, Inc.
1493 Market Street
Tallahassee, FL 32312
(850) 893-5699

E-mail me at: Steve.Foster@ExpertSupervisor.com.