What Peter Drucker Would Be Reading

May 222012
 

Peter Drucker

Recent selections from around the web that, we think, would have caught Peter Drucker’s eye:

1.  Are You Sleeping With Your Smartphone?: We may begrudge the invasiveness of our communications gadgets, but we’re the enablers, writes Leslie A. Perlow on the HBR Blog. By feeling pressured to respond to work at all times, weekday or weekend, we enable the crowding out of all down time, much to our disadvantage: “When we are trapped, we don’t think about better, faster and more effective ways of working.”

2.  Failure and the Giving Pledge: The business world understands that failure is essential to learning. But non-profits refuse to admit failure, according to the writers at Philanthrocapitalism.com, which makes them more likely to be both dishonest and risk-averse: “Philanthropy, by contrast, has long missed out on the feedback loop from failure that is so valuable to business, and so often ends up frittering away scarce resources on projects that someone else has already found wanting.”

3.  Envisioning the Future With Student Designers: What will the future look like? To answer, the folks at Herman Miller worked with students from two U.S. design schools, Cranbrook and Pratt. “Cranbrook students contemplated the challenges of the modern office, imagining a work culture in which living and working blend even more deeply than they do today,” David Foster explains on Herman Miller’s Discover Blog. “The students at Pratt sought to create designs that balance body and mind in ways that potentially increase health benefits and elevate mood and productivity while providing a greater degree of personal satisfaction from the user experience.”

4.  The Dx Comment of the Week: In response to our post “Healthy Changes,” in which we asked about fixes the U.S. should make to its healthcare system, reader Will Garand had this to say:

Wellness starts with education and awareness, and perhaps the foundation is leading the way towards more effective engagement with our health by challenging our assumption that when the patient is sick it’s all about the treatment. Prevention comes from individual commitments to healthy living and effective treatment of an illness still needs that individual commitment to be at its core.

Joe’s Journal: On Policing Oneself

May 012012
 

“A business that does not show a profit at least equal to its cost of capital is irresponsible; it wastes society’s resources. Economic profit performance is the base without which business cannot discharge any other responsibilities, cannot be a good employer, a good citizen, a good neighbor. But economic performance is not the only responsibility of a business any more than educational performance is the only responsibility of a school or healthcare the only responsibility of a hospital. Every organization must assume responsibility for its impact on employees, the environment, customers, and whomever and whatever it touches. That is social responsibility.”

—Peter F. Drucker

As Peter Drucker asserts, wealth creation is the first responsibility of business. If it does not earn enough to pay its total cost of capital, it is not being socially responsible to its investors and lenders. In addition, sufficient profit is necessary to provide for future innovation.

But a business should also act in a socially responsible way by taking into account the requirements of all stakeholders, first and foremost its customers. Then, it must make sure it eliminates any negative impacts that it creates on society, such as pollution of the air and water, and unethical practices that jeopardize the general welfare.

If operating ethically puts a business at a competitive disadvantage, it should encourage the right kind of regulation of the entire industry.  If it does not, it will almost certainly encounter the wrath of society, and pressure will build for government regulation that may well turn out to be overly and needlessly burdensome.

In recent years, this brand of leadership was sorely absent from executives who were knowledgeable about long-standing abuses in the mortgage and consumer-credit markets. The result was passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, an 848-page bill that has been widely criticized by business and by elected representatives as an example of over-regulation.

One of the differences between good capitalism and bad capitalism is the practice of socially responsible behavior. We have witnessed the damage irresponsible behavior can create. The challenge now before us is to change the attitude of influential executives toward the interest of society.

—Joe Maciariello

The Feedback

Apr 242012
 

Don’t say you’re swinging from vines; say you’re “high-end temping.” Last week, we looked at a Harvard Business Review article about “supertemps”—top managers “who’ve been trained at top schools and companies and choose to pursue project-based careers independent of any major firm.” And we asked whether that sort of temping is a good way forward for our society and economy.

Reader Sergio said yes, but stop rebottling old wine:

Use of the term ‘supertemp’ seems more of a gimmick than a realization that with a smartphone/laptop/tablet/computer in hand, ‘everyone owns a factory’ (Seth Godin), and because of this, the traditional structure of an organization is changing.

Reader Maverick18 also said, yes, bring on this new type of worker:

With an aging population with immense expertise, consultants and temps are a super source of skills as well as work ethic. . . . Fringes, unions and long commitments are avoided. Consultants and temps represent the evolution of a competitive labor supply. Those who provide the best value for their price are always backlogged.

And reader Holly Hope saw some good and bad:

The main drawbacks I see to the high-end temp phenomena are (1) corporate knowledge is not retained in the corporation (2) the corporate equilibrium will try to counter any changes made after the temp leaves, to bring the system back into equilibrium. If the temp is an effective change manager, then (2) may not be such a drawback. I think that the super-temp trend is generally good for the super-temps, if they can balance personal and work life.

A Bridge to Somewhere, and Fast

Apr 182012
 

Sometimes government service improves. When that happens, we must be thankful.

In Massachusetts, the Department of Transportation has started finding contractors who can replace bridges not in years, but in days. The secret to their speed lies in using enormous prefabricated pieces that get slid into place, rather than building on site. It’s not simple, but it’s effective, and, as the New York Times reported this week, “rapid replacement . . . tends to cost the same as slower approaches, if not less.”

Reconstruction of Interstate I-93 in Boston, MA. Image source: Gill Engineering

“The highway department didn’t use to see the drivers as customers,” Frank DePaola, administrator of the highway division for the department, told the Times. “For a while there, the highway department was so focused on construction and road projects, it’s almost as if the contractors became their customers.”

DePaola’s words would certainly have resonated with Peter Drucker. The deceptively simple question “Who is our customer?” was central to Drucker’s writings and consulting. And Drucker would undoubtedly have lauded the gains Massachusetts has made, especially given his deep skepticism of the public sector’s ability to get things done.

But what’s less certain is whether Drucker would automatically have agreed with DePaola’s analysis of who the customer is. As simple as the question “Who is our customer?” might be, the answer is often very tricky. “The right answer to ‘Who is the customer?’ is usually that there are several customers,” Drucker noted in Management: Tasks, Responsibilities, Practices.

In the case of Massachusetts’ infrastructure, taxpayers may vote, but they don’t have direct control over the highway department or the contractors fixing the road. “Not ‘who pays’ but ‘who determines the buying decision’ is the ‘customer,’” Drucker wrote in Managing For Results. For instance, areyou the customer when you buy a prescription drug? Or is your doctor the customer? “The drug companies clearly do not agree in their answers to these questions,” Drucker wrote. “Yet a different answer leads to very different measures.”

What do you think: Who is the real “customer” when it comes to government service?

The Feedback

Apr 172012
 

Although we consider every moment spent at the Dx to be a moment well spent, we recognize that not every moment spent online is a moment well spent. So how do our readers beat back information overload and prevent the Internet and social-media sites from swallowing up all their time? This was the question we posted last week.

Reader Sergio wrote that his “Lenten sacrifice this year was to refrain from using social media websites,” even though his use of those sites was almost entirely work-related. He explained:

Over the course of my abstinence I found unhealthy work habits simply faded away. The need-to-know and need-to-share habits promoted by social networks were rechanneled within my workplace instead. This intensified my collaboration with colleagues, and improved the focus and quality of my work. I also finished two books, and generally felt like I was grasping new concepts more effectively.

Spending too much time online is the mark of “crazy” habits, according to reader Alba Patricia Valencia:

Time is a nonrenewable resource and we have short time to live in this existence. When we understand the value of time, we will be more sensible to know how to spend it.

And reader Mike Grayson said that for decades he has been following Drucker’s recommendation to record his time, and the results have been good:

I can say that I have accomplished some pretty aggressive goals, while other goals have been changed because I deem them not worthy of the time it would take to accomplish them. Here is the caveat: I have not always been faithful to the method, but the result is always the same. When I fail to manage my time, my effectiveness drops and I flounder in reaching my goals. When I adhere to the method, I make a great deal of progress toward and often accomplish my goals. The real fight is with my weak human nature.

Trivial Pursuit

Apr 132012
 

Not surprisingly, we feel that applying Peter Drucker’s timeless insights to current events is immensely helpful. But we can’t deny that we do so online—and that’s a place that many people (younger ones in particular) believe is becoming a big time-waster.

In fact, according to a new Gallup poll, 59% of Americans ages 18 to 29 say they spend too much time on the Internet. Fifty-eight percent in that age group, meanwhile, say they spend too much time on their cell phones or smart phones, while 48% make the same admission about social-media sites like Facebook.

Of course, one problem is that so much information (of greatly varying quality) is so easily available, a trend that Drucker began to pick up on in the business world decades ago. “Every professional and every executive . . . suddenly has access to data in inexhaustible abundance,” Drucker wrote in Technology, Management, and Society. “All of us feel—and overeat—very much like the little boy who has been left alone in the candy store.”

The key question is what all of those online overeaters are going to do about it. “It is possible that younger Americans—concerned about their use of time—will attempt to scale back their use of the new technologies,” Gallup’s Frank Newport noted. “On the other hand, recognition of negative aspects of engaging in certain activities doesn’t necessarily mean people are able to stop doing them—as witnessed by those who would like to quit smoking but can’t, and those who would like to lose weight but don’t.”

Illustration credit: Christopher Silas Neal

Drucker, for his part, believed that “it is . . . essential to remedy your bad habits—the things you do or fail to do that inhibit your effectiveness and performance.”

When it comes to managing time, he taught that a good way to be more productive is to record your actual time-use and then analyze it, rethinking and reworking your schedule accordingly.

But people must be prepared to repeat this process frequently because bad habits tend to resurface. “Six months later, they invariably find that they have ‘drifted’ into wasting their time on trivia,” Drucker wrote in The Effective Executive. “Time-use does improve with practice. But only constant efforts at managing time can prevent drifting.”

How about you? What steps do you take to prevent the Internet and social-media sites from swallowing too much of your time?

Trust Me

Feb 102012
 

In this episode of “Drucker on the Dial”, host Phalana Tiller talks with author Ron Ashkenas about his recent HBR blog “Learn to Trust Your Gut” and his book Simply Effective. She also interviews neuroeconomist, and Drucker Exchange contributor, Paul Zak about his research with the brain chemical oxytocin and his new book The Moral Molecule. The conversations explore how instincts and brain chemistry intersect with trust and organizational behavior.

And Bloomberg Businessweek online columnist Rick Wartzman delivers a piece on how Starbucks is balancing continuity and change.

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