Peter Drucker's Way to the Top

by William Cohen

  This programme was initiated because Weiss wanted to raise the quality of life. But it had dramatic and unexpected results. Before Weiss retired as CEO he said, “Turnover used to be 25%; now it’s below 10% … Workers’ compensation claims filed have plummeted. We now pay one-tenth of what we paid four years ago … In one year alone, we saw the turn-around time on orders drop from seven days to one.”17 The company reported $50 million in annual revenues prior to Weiss’s retirement.

  That’s certainly a win–win for everyone involved. Drucker used knowledge in pushing his career to the top. The head of any organization can use the same principle to boost the careers of others and boost their own organizations standing as well. Drucker wasn’t a company president, but he took care of his students in the same manner, even years after they graduated. He knew this was important to get the right people to the top of their organizations, and the thing to do on his own way to the top of his profession.

  1. Drucker, Peter F. The Practice of Management (New York: Harper & Row, 1955), 194.

  2. Hay, Peter. The Book of Business Anecdotes (New York: Facts on File, 1988), 168.

  3. Teal, Thomas. “Not a Fool, Not a Saint”. Fortune, 11 November 1996. https://bit.ly/2AL63Eh.

  4. Campbell, Kenneth D. “Malden Mills Owner Applies Religious Ethics to Business”. MIT News, 16 April 1997, https://bit.ly/2AKmxwf.

  5. Whitmore, David. Interview with the author, 8 November 1997.

  6. Anfuso, Dawn. “3M’s Staffing Strategy Promotes Productivity and Pride”. Personnel Journal 74 no. 2 (February 1995): 28-34. https://bit.ly/2ncDIx8.

  7. DeSimone, L.D. 3M Annual Report. 20 February 1997.

  8. Chandler, Susan. “Lands’ End Looks for Terra Firma”. BusinessWeek, 8 July 1996, 128, 131.

  9. Iverson, Ken, Plain Talk: Lessons from a Business Maverick (New York: John Wiley, 1998), 13.

  10. Iverson, Ken. Telephone interview with the author, 30 October 1997.

  11. “Nucor”. Wikipedia, https://bit.ly/2swYyvv, accessed 20 July 2018

  12. Ibid.

  13. “Cutco”. Wikipedia, https://bit.ly/2M50oNK, accessed 20 July 2018

  14. Laine, Erick. Telephone interview with the author, 22 December 1997.

  15. “State Street Corporation”. Wikipedia, https://bit.ly/2ptQ1G5, accessed 20 July 2018

  16. Carter, Marsh N.

  17. Browkaw, Murphy & Seglin, “What It Takes.”

  CHAPTER 11

  PUT DUTY BEFORE SELF

  Above all, people demand that the manager take responsibility for his own work and performance.

  – Peter F. Drucker

  Duty is a synonym for responsibility, it is an obligation or task that you are required to perform. We may think of it most in the work environment. When you are hired for a position your duties may be written in a formal contract which you must sign to show that you understand and agree. In a smaller company, the position may only be explained verbally. That is a verbal contract, and one which may include a set of duties to which you agree to perform. There are also many duties from contracts in a non-work setting. When you are married you sign a contract and are given a marriage licence. In most marriage contracts, each side’s duties are specifically noted. Also, some duties are implicit. For example, if you see someone in distress on the street, society expects you to stop and assist if you can.

  DUTIES MAY BE IMPLICIT OR EXPLICIT

  Many duties are legal and required even if you have not volunteered intentionally for them and not signed anything. For example, if you are in a car accident and someone is hurt or there is damage, you are required to stop and not leave the scene. Society also may assign you a social responsibility if you are a senior manager or a top executive and expect you to fulfil social responsibilities even if these are not noted in your hiring agreement. Sam Walton was lauded for social responsibility with his low prices and putting Wal-Mart stores in locations where larger stores wouldn’t go. But he was attacked for lack of social responsibility as Wal-Mart grew in number and put many smaller local stores out of business. So, duty sometimes depends on perception and duties may be implicit or explicit. Either way, you are responsible and generally the more power you have in any situation or environment, the greater your responsibility.

  A CEO has considerably more responsibility and power than a lower-level executive and Drucker took notice of this fact and emphasized it. The importance of recognizing this fact and putting responsibility ahead of other personal needs at every level of management plays a key role in advancing or delaying your career or any endeavour to which we can attach the adjective, ‘successful’.

  PERSONAL RESPONSIBILITIES AND NEEDS

  But wait, there are personal responsibilities as well as personal needs. What about your responsibilities to your family? Isaac Asimov was a famous writer. He had an extraordinarily successful career. He authored more than 200 books; many were bestsellers and not all were science fiction, in which he started his career and for which was best known.

  In his family, Asimov especially adored his daughter. In one of two autobiographies that he wrote, Asimov related that when his daughter grew up he once asked her how she would best describe his time as her dad when she was younger. He expected her to say something like “You were a loving dad” or “You were an affectionate dad”. Instead she surprised him completely by immediately responding, “You were a busy dad.” Reflecting on this he wrote that she was, unfortunately, correct. Despite his efforts, he had frequently ignored his responsibilities as a father while furthering his career as a writer. This was not putting duties before needs, it was putting one type of duty before another.

  Sadly, most of us, usually unknowingly, are guilty of this. The phenomenon even inspired the 1974 hit song “Cat’s in the Cradle”, by Harry Chapin and his wife, Sandra. The song related to how Chapin was always being too busy for his son: the voice of the story in the song had unwittingly trained his son to do the same. When the father grew old and suggested doing things with his son, the son answered the father in the same way the father had answered the son as he was growing up: too busy right now, but they would surely get together some day and have a good time when they did. The recording topped the Billboard Hot 100 in December 1974. It was Chapin’s only No. 1 hit song and became the best known of his work and was inducted into the Grammy Hall of Fame in 2011.1 About the song, Chapin said, “Frankly, this song scares me to death.”2 Once I wrote an article warning of the dangers in neglecting this duty and referring to the song. I received several strong responses which echoed the same sentiment from as far away as Australia.

  What I am saying here is that while we think of success mainly in our careers, our families count heavily, and it is unfortunate that we may only realize this after we grow older and our children grow up. Therefore, we need to remember Chapin’s song as we proceed with Drucker’s insights about our duties before our personal needs.

  WHAT IS DUTY?

  Not atypically, if you look up duty in the dictionary, you will find several definitions. Two definitions capture the sense of what is required as a part of this universal law of success: 1. The actions required by one’s occupation or position and 2. A moral or legal obligation. We need both of these definitions, when we look at social responsibilities and duties to our families and legal duties as well as duties as managers and corporate executives.

  THIS CEO PUT DUTY IN HIS WORK ABOVE PERSONAL DUTY TO SUCCEED

  Herb Kelleher, was long the CEO of Southwest Airlines. Southwest Airlines had been the most profitable airline in the US, and the one picked as first in quality by customer surveys many times. Kelleher advised: “If there’s going to be a downslide, you share it.”

  When Southwest Airlines ran into trouble at one point, Kelleher went to his board of directors and told them he wanted his salary cut. He cut his bonus by 20% and all corporate officers by 10%. These cuts were made before firing a single employee.3 As we have seen, other successful CEOs have done the same. Here we w
ill look only at his work life.

  Managers who practise duty before themselves assist others in accomplishing difficult tasks when they face major obstacles. Yet, other managers with few work problems frequently fail to place their employees’ issues first, even when they themselves face no major obstacles to their goals. Managers don’t always need to attempt the impossible. They do need to put their duty first above personal needs while remembering that other duties, such as family duties, are also deserving of attention.

  DUTY BEFORE SELF – DO MANAGERS DO IT ROUTINELY?

  Is duty before self such as shown by Kelleher always practised in industry? Not always. In many companies, the automatic solution to any slip in profits or other business decisions are considered more important. An article in Newsweek once stated: “After causing the problems through poor decisions, many CEOs offer up their employees as human sacrifices, hoping to get their stock prices up. If they do go up, they get a raise even while their employees suffer.”4

  Akio Morita, at the time chairman of the Sony Corporation, claimed, “American management treats workers as just a tool to make money. You know, when the economy is booming they hire more workers, and when the recession comes, they lay off the workers. But you know, recession is not caused by the workers.”5 Drucker spent a great deal of effort convincing others that people needed to be put on the asset side of an accounting ledger and not considered a liability.

  Fortunately, all American managers do not treat workers “as a tool to make money”. However, if you always put employees’ or others’ needs over mission, you are also likely to run into difficulties too. The same is true with family needs, as Isaac Asimov found out. There will always be times when you and your employees must work late and work over holidays or weekends to satisfy your customer. There are times when the personal wishes of individuals must be sacrificed for mission. But if you routinely do this you’re asking for trouble. There are times when work must come first over people. But there are also times when needs of people – your employees, your family – must come first. Ignore them at your peril!

  Concern for mission and people are closely intertwined, as without people, you cannot accomplish the mission. If you adopt the priorities of mission or people in the same fixed order every time, it will eventually be wrong for a particular situation which you will face.

  GREAT CONCERN FOR BOTH MISSION AND PEOPLE IS NOT A NEW CONCEPT

  The notion that you must have great concern for both mission and people may have originated elsewhere, but it has been well documented by researchers. Drs Robert Blake and Jane Mouton developed books in the early 1960s which investigated this issue. Their books, The Managerial Grid and The New Managerial Grid, described a system of measuring managerial effectiveness through a matrix showing concern for production on one axis and concern for people on the other. In a day when management books emphasizing people were only then gaining popularity, their original book sold almost 1,000,000 copies. Their conclusions are evident today, that a leader’s great concern for both production and for people (“head and heart” they called it) led to many beneficial and synergistic consequences,6 while a higher concern always for the same one in all situations was a mistake. In other words, both people and mission must be considered as very important, but not in a fixed and unchanging priority. There are times when the very top priority must be given to mission (work). At other times, your people must be given top priority (or a single individual) over mission. As someone who wants to use Drucker’s methods to reach the top and be all you can be, you must ensure that both priorities are at the top of your list. You must judge which gets the primary call considering all factors in a specific situation.

  REJOICE IN THE SUCCESS OF OTHERS

  If you are an organizational head, you are responsible for everything your organization does or fails to do. Since your organization is made up of people, you are responsible for everything your people do or fail to do. If those for whom you are responsible are successful, you are successful. Conversely, if they fail, that makes you a failure.

  Any leader who puts duty first rejoices in the successes of those responsible to him or her and does everything possible to help them to achieve success. Such leaders take full responsibility for failure but give as much credit as they can to their followers.

  CONSIDER YOURSELF LAST

  Sure, you’ve got to consider yourself. You owe something to yourself. As I’ve said, you have responsibilities to your family as well. If you never consider things like personal health, proper sleep, and spending time with your family, you are heading towards massive trouble which can negatively impact your entire life, not mention your ability to lead and certainly to reach the top.

  The difficulty arises when those who are responsible almost always consider themselves first. If you are a leader, you’ve got additional responsibilities that you cannot avoid. You must take care of those who you expect to follow you. You’ve got to keep the wellbeing of those you lead in the forefront. You’ve got to consider the impact of any action you take or fail to take on the mission. And most frequently you’ve got to do this before you start taking care of your own wants and needs. Yes, as a leader you have certain privileges and power that others do not. But you also have much increased responsibilities as well.

  As the one in charge, others will do as you do. If you always consider your own wellbeing first, before others, and before your mission, so will those you expect to follow you. In all likelihood, they won’t willingly follow you at all. They will be too busy looking out for themselves, too!

  SHARE THE PAIN

  Sharing the pain means that when things go wrong, you are there to show your concern. However, showing concern isn’t just a display. You must really share your subordinates’ pain if you are putting duty before self. You must share their pain whether or not it is inconvenient, whether or not it is difficult, or whether or not it costs you time, money, or other resources.

  THIS MAN IS FAMOUS FOR HIS COFFEE, BUT HE IS ALSO CONCERNED FOR HIS PEOPLE

  If you want to embrace the concept of duty, you should note that actions speak louder than words. You don’t need to run around saying what a wonderful people person you are. But you do need to show your concern by sharing the pain and hardship. That speaks louder than words.

  Howard Schultz grew up in Brooklyn, New York and went to college on student loans and working as a salesman. In 1982, he joined Star-bucks. Five years later he bought the company and became CEO. The Seattle company then had six outlets and fewer than 100 employees. Today Starbucks has more than almost 238,000 employees operating in 64 countries.7 How did Schultz do it?

  First, Schultz follows an earlier success principle which Drucker commented on. In his book Pour Your Heart Into It, Schultz wrote: “Our first priority was to take care of our people, because they were the ones responsible for communicating our passion to our customers.”8

  Years earlier, he had told a reporter, “Every dollar you invest in your employees shows up – and then some – on the bottom line.”9 And he backed that up with a generous and comprehensive employee-benefits package that included healthcare, stock options, training programmes, career counselling, and product discounts for all workers, both full- and part-time. “No one can afford not to provide these kinds of benefits,” said Schultz.10 So, Schultz shares the gain. But Schultz also shares the pain.

  Yes, the universal success laws or principles we have been talking about overlap. So it’s concern for people as a part of duty placed before self.

  Once when Schultz was on a business trip to New York and asleep in his hotel room the telephone rang. Three Starbucks employees had been murdered in a Washington coffee shop. Schultz immediately dressed, left the hotel, and went to the airport. By the next morning he was on the spot comforting relatives and co-workers. In 1997, when Starbucks had over 200,000 employees, Schultz still knew in many ways that he was responsible for all of them. “It’s very important for me – or any CEO – to be visible,
” he said at the time.11 Sharing the pain, even if just to comfort those for whom you are responsible, is part of duty before self. In some situations, it can also be shown by simple things such as the size of your office or your lack of a private secretary.

  BILLION DOLLARS IN SALES AND NO PRIVATE OFFICE

  Michael Bloomberg is the founder, CEO, and owner of Bloomberg LP, a global financial service, mass media, and software company.12 This is a billion-dollar company which, among other things, publishes financial news electronically through Bloomberg News. The subscribers are 100,000 financial professionals in more than 100 countries who pay a lot for the service and have helped create a personal fortune of over $53 billion for Michael Bloomberg. He left the job of CEO only to serve as three-time mayor of New York City and resumed his position as CEO in 2014.

  Bloomberg News has 19,000 employees in 73 cities and 192 offices; it is a multibillion dollar conglomerate. Michael Bloomberg doesn’t have the largest, nor the smallest office compared to any of his employees. That’s because neither Bloomberg, nor any of his employees, had private offices nor do they have secretaries. “There are no private offices at Bloomberg,” he insists. “My desk is exactly the same size as everyone else’s.”13

  Moreover, Bloomberg believes and insists that as his employees are promoted, they shouldn’t expect to work less and take more vacations. “You’re more valuable, you get paid more, and your coworkers should get more out of you.”14