25. Peter Drucker – the gurus’ guru – but what about small business?
Peter Drucker is probably the most influential business guru of all time. Born in 1909, died in 2005, he published his first book, The Concept of the Corporation, in 1946 and his last, The Effective Executive in Action, in 2005 at the age of 95! He more or less created the concept of business management: before The Concept of the Corporation it almost did not exist; after it, management became a comprehensible discipline with techniques and practices that could be taught and implemented.
Drucker has covered almost every area of management and he has consistently predicted trends before they emerged – he was discussing the concept of the ‘knowledge worker’ in 1959 – so his work is difficult to sum up. He understood the importance of Frederick Winslow Taylor’s work; The Concept of the Corporation was also based on observation of a massive company, General Motors, but where Taylor focused on blue-collar workers, Drucker focused on management. He saw much to praise in GM but believed it could become more efficient by decentralising; GM did not pick up on this, but many Japanese companies did.
One major difference from Taylor is that Drucker saw people as key: business is a practice dependent on people rather than a science, and theory should come from seeing what works. He believed that few people understood their strengths and that companies could unleash great potential if they helped identify these and developed their staff; he believed in having passion for what you do, that individuals and businesses should never stop challenging, growing and re-inventing themselves. He believed work should be enjoyed – although this can be easier to achieve in management than on the production line! He believed in corporate decentralisation and, at a lower level, giving individuals scope to contribute.
He was studying corporate giants, so again is this irrelevant for small business? Well, yes. Just from the few sentences above we can take a number of pointers for small business.
1. Business is a practice dependent on people and that is just as much or even more the case for small business than large. And those people are your customers and your suppliers as well as your staff. How many times do you as a small business person under pressure fail to respond to the needs of your customers, not treat your suppliers as carefully as you should or fail to get the best out of staff? The same issues apply as in a large company. And also as in a large company, we should not ignore the leader. Are you, the small business entrepreneur, contributing as much as you could? Are you looking after the long-term direction as well as the short-term issues of the business? Are you looking after youself so that you will remain physically and mentally fit to run the business? Are you getting your priorities right and delegating tasks to staff or suppliers that you are not the best person to undertake? Etc.
2. Theory should come from what works in practice, so are you studying competitors and other businesses to see what does work? Are you learing lessons and applying them?
3. Are you aware of your strengths and opportunities, personally and as a business? This can help you decide what to delegate and when to bring in outside help. Marketing, finance, IT etc – the small business person has to be a bit of a ‘Jack of all trades’ but there comes a time when much greater productivity can be achieved by bringing in a specialist. Do you understand what people think is special about your business, your business’s strengths, and do you develop and exploit these?
4. If you have staff, do you ensure they understand what is special about the business and that they develop this strength and communicate it whenever they can? Do you understand clearly what you want your staff to do; do they understand it and do you help them develop the skills to do it better?
5. Do you have a passion for your business and what you do, or is the day-to-day workload eroding this? Can you, do you, develop and communicate that passion to all: staff, customers and suppliers?
6. Do you constantly rethink and challenge what you are doing and how you are doing it, to see if it is still relevant, if it can be improved? Do you have the time to do this?
7. Are you enjoying your business? If not, or not enough, what is it that is preventing you from enjoying it? Can you improve your enjoyment by planning better what you do, what you delegate? Without enjoyment it is difficult to communicate passion, and if you do not really care about your business, then how can it prove to be better than competitors?
So a lot to ponder for small businesses, even from a cursory look at Drucker’s thinking.
