Wednesday, December 29, 2010

5 Questions with Peter Drucker

I'm a big Peter Drucker fan.

The Five Most Important Questions You Will Ever Ask About Your Organization ranks among my favorite business books, along with The Effective Executive in Action: A Journal for Getting the Right Things Done.

Here's a brief synopsis of "The Five Most Important Questions You Will Ever Ask About Your Organization," followed by 5 takeaways for you as you plan the year ahead ...

If management demi-god Peter Drucker were alive today, he would advise you ask 5 simple, yet profound questions. Answering them lets you analyze and transform your business for the better.

Peter Drucker's 5 questions are:

    * What is our Mission?
    * Who is our Customer?
    * What does the Customer Value?
    * What are our Results?
    * What is our Plan? 

Now, here are Druckers' 5 questions, with possible answers for you ...

1) What is your Mission?
It cannot be impersonal corporate-speak. Your mission must be personal, something you and everyone on your team knows is right. To be effective, it should be short and focused enough to fit on a T-shirt (there's an idea!).

Example: a hospital ER came up with this mission: To give assurance to the afflicted. It should inspire you to say, "Yes, this is something I want to be remembered for."
2) Who is your Customer?
Your business does not exist to please everyone -- only to please your target customers. Remember Drucker's statement from 40+ years ago? "The purpose of a company is to create a customer." Today, Drucker would say, "The best companies don't create customers. They create fans." Do you have fans?

3) What does your Customer Value?

Don't even try to guess. Ask your customers systematically what it is they truly value. Ask questions like: What one thing we do better? What could we do more of? Less of? Faster? The answers are a goldmine of future profits. Keep asking your customers until you get those answers.

4) What are your Results?
Goals for sales, profits, and market share should be set and met. Key: know what to STOP doing -- before you can do more of what works, you must do less of what doesn't. Your aim is to invest your time, money, and energy where you can achieve success.

5) What is your Plan? 
After answering questions 1-4, sum up the actions to take to reach your goals. The hard part is determining how to marshal limited time and resources; if there were no limits, you would need no plan.

Limit your long-term goals to 5 at most -- any more and you will be spread too thin. The end result of your plan should be a written vision of the future in which your goals are achieved and your mission completed.

Anything by Peter Drucker is worth your time. This book is highly recommended.

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