Peter Drucker's Way to the Top

by William Cohen

  The point isn’t that Bloomberg executives don’t have large offices, or other symbols of power. You can become successful at Bloomberg and this approach is exactly what Drucker recommended.

  GREAT CONCERN FOR MISSION AND PEOPLE OVER SELF

  Drucker was always proud when he saw businessmen who put duty before self. Homer Laughlin China Co. is a privately held company in Newell, West Virginia. Current estimates say this company has an annual revenue of $20 million to $50 million and employs a staff of approximately 1,000 to 4,999.15 That’s large for a company that manufactures china. In fact, it once claimed to be the largest china-manufacturing company in the world.

  Yet Homer Laughlin China manufactures china in the USA, not overseas. The company managed to survive and even prosper during the Great Depression because cinemas were giving away dishes as door prizes to try and attract customers. However, in the late 1970s cheap imports almost did them in. By then, CEO Joseph Wells II and President Marcus Aaron headed the company. It was their grandfathers that bought the company from its founders in 1897.16 It survived the latest recession, too. This is not so usual. Of the Fortune 500 companies listed by Forbes 60 years ago, only 71 have survived.

  In fact, by the late 1970s, Homer Laughlin China was producing cheap dinnerware for the restaurant trade. Imports had wiped out their price advantage, and sales plunged. Neither owner needed the money. They were tempted to call it quits. However, both knew that liquidating the company would decimate the community. Said CEO Wells, “These plant employees are the fourth and fifth generation at Homer Laughlin. I went to school with some of them.”17

  So, the two owners decided to stick it out, not for their own good, but for the welfare of their employees, and maybe a little bit because of the traditions of their families’ involvement with the firm. The decision to keep the company meant spending an additional half a million dollars on new equipment and reconfiguring their manufacturing process. In this way, they eliminated dozens of steps, reduced costs by 15% and cut production time from one week to one day. This in turn enabled them to reduce inventories by 75% and they survived the challenge.

  To do more than survive, they brought out old moulds from a once-fashionable design called Fiesta. Bloomingdale’s launched the revived brand, and Homer Laughlin was back in business. Using cashflow from their Fiesta line, they moved into the custom china business with additional lines.18 Naturally, Homer Laughlin workers responded to the high moral courage and duty before self displayed by their owners.

  To summarize, what is illustrated by history is that putting duty before self means a focus on both mission and people and quite a bit of judging where your duty lies in different situations. It means always putting your own personal interests second to the mission and those who depend on you, including subordinates, customers, and family. That’s quite a trick to pull off, because duties are frequently conflicting. You won’t always be 100% successful, but it is worth the effort and Drucker’s career proved that. Putting duty before self is difficult, but it can be done.

  1. “Cat’s in the Cradle”. Wikipedia, https://bit.ly/2nj53xr, accessed 20 July 2018.

  2. “Harry Chapin – ‘Cats in the Cradle’ Soundstage”. YouTube, posted 21 January 2014. https://bit.ly/2OiGT1P, at 51s.

  3. Waxler, Robert P. and Thomas J. Higginson. Industrial Management (July-August, 1990), 26.

  4. Sloan, Allan. “The Hit Men”. Newsweek, 26 February 1996, 44-48.

  5. Waxler and Higginson, 24.

  6. Blake, Robert R. and Jane S. Mouton. The New Managerial Grid (Houston, TX: Gulf Publishing Co., 1964, 1978), 95.

  7. Statistic Brain Research Institute. “Starbucks Company Statistics”. StatisticBrain, https://bit.ly/2vnfODz, accessed 20 July 2018.

  8. Schultz, Howard and Dori Jones Yang. Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time (New York: Hyperion, 1997), 182.

  9. Rothman, Matt. “Into the Black”. Inc.Com, January 1993. https://bit.ly/2OeAW5O.

  10. Ibid.

  11. Zachary, G. Pascal. “CEOs Are Stars Now, But Why? And Would Alfred Sloan Approve?” The Wall Street Journal, 3 September 1997, A-1, A-10.

  12. “Michael Bloomberg”. Wikipedia, https://bit.ly/25Ss7D2, accessed 20 July 2018.

  13. Roshan, Maer. “Michael Bloomberg’s Office Is … a Cubicle?!” The Hollywood Reporter, 9 April 2015. https://bit.ly/2OhfbCA.

  14. Whitford, David, “Fire in His Belly, Ambition in His Eyes,” Fortune, 12 May 1997. https://for.tn/2LUoeMR.

  15. “Homer Laughlin China CO.” Manta, https://bit.ly/2vK2jNo, accessed 20 July 2018.

  16. “Homer Laughlin China Company”. Wikipedia, https://bit.ly/2n5iLEe, accessed 20 July 2018.

  17. Oliver, Suzanne, “Keep It Trendy”. Forbes, 18 July 1994, 88.

  18. Ibid., 89, 94.

  CHAPTER 12

  GET OUT IN FRONT

  During World War I the losses among higher ranking officers was rare compared with the losses they caused by their incompetence. Too few generals were killed.

  – Peter F. Drucker

  Drucker had read much on warfare and used military examples in class and in his writings. He knew that in battle, getting out in front of those you lead was important for success. He wrote the words that one reason for the failure of axis units during World War I was that “too few generals were killed”. This was explained from one source as follows:

  “When Peter Drucker was in high school in the mid-1920s, his history teacher assigned a number of books on World War I campaigns. When discussing the books, one student said, ‘Every one of these books says that the Great War was a war of total military incompetence. Why was it?’ The teacher, who had been badly wounded in the war, shot back without hesitation: ‘Because not enough generals were killed; they stayed way behind the lines and let others do the fighting and dying’.”1

  WHERE YOU NEED TO BE TO POSITION YOURSELF FOR SUCCESS

  To be successful you must be at the front line in any job or human activity. Drucker knew that and followed the guidelines of being in front. In his youth he led fellow students in his conservative politics and as the Nazi party grew in strength, he publicly opposed the Nazis. His books in German supported, first, a Jewish convert to Christianity, and then addressed the entire question of being Jewish in Germany. Both books were banned by the Nazis. His first book in English, The End of Economic Man in 1939 continued this opposition. His book Concept of the Corporation2 broke new ground in management. The ‘Drucker Difference’ was real even when Drucker was young. When necessary, he took an unpopular stance. When others cried for regulated ‘business ethics’ he maintained that there was no such thing, only ethics. When most academics said that all management should be participatory, he said no, it was situational. In some cases, a directive style was needed. He was a champion of decentralization when it was unpopular and was possibly the only management expert to point out that not only was selling not a subset of marketing, but that it could be adversarial to it. He was always out in front, and this contributed significantly to his success.

  HOW TO GET OUT IN FRONT

  If you want to be a success, obey this natural law and get out in front. Here’s how to do it:

  • Go where the action is and set the example

  • Be willing to do anything you ask of those who follow

  • Take charge

  • Be an up-front leader.

  CAESAR’S OUTSTANDING TRAIT: HE WAS ALWAYS WHERE THE ACTION WAS

  Julius Caesar had one trait that set him apart from other successful Roman generals. It was not that he wasn’t a deep thinker. He was. However, others like the ‘philosopher emperor’ Marcus Aurelius, were even deeper thinkers. It was not that he wasn’t a good strategist or tactician, either. Again, he was, but there were other Roman generals who were at least as good.

  No, what set Caesar apart, was the fact that he spent an inordinate amount of time up front in the company of his soldiers. It was said that he committed not o
nly the names of his officers, but the names of thousands of his legionnaires to memory. He greeted all of them by name and he spent time with them out in front, in battle and, later, in the Roman senate. It not only made him popular, it brought him to the front rank of politics although he had little previous political experience.

  Because of this, Caesar’s troops knew they were not just numbers to him. They were important! Wherever the action was, and whatever happened, they knew he would be there with them.

  In those days there was no way of leading from the rear during a war, and there is no way of leading from the rear in corporate life and other activities today. You must be out in front, where the action is. That way you can see what’s going right and what’s going wrong. You can make critical decisions fast, rather than those decisions working their way up and down the chain of command for approval. You can see your employees, and they can see you. There is no question in anyone’s mind as to what you want done, and the fact that you are there on the spot lets others know just how committed you are to getting it done. It lets them know that you think what they are doing is important. It lets all who would follow you know that you are ready, willing, and able to share in their hardships, problems, successes, and failures in working towards every goal and completing every task. Moreover, going where the action is gives you an opportunity to set the example. Remember to get to the top you need to be a leader, and to be a leader, you must lead. To lead means that you need to get out in front. That’s true for a professional like Drucker, too. Peter was known to all of us as Peter because he asked that we did not call him ‘professor’ or ‘Dr Drucker’. He knew our names too, and after he met my wife once, he knew her name, also.

  SUCCESS IN THE JUNGLES OF BRAZIL WITH THE HEADHUNTERS AND PIRANHAS

  Dr Mark Chandler headed Inland Laboratories, a Texas company that sold toxins, viruses, and other biochemical products to medical researchers. At one time his company needed two rare plants to refine into a cancer medicine. Unfortunately, these plants grew only in the Brazilian rainforest hundreds of miles from civilization. Chandler couldn’t buy the plants anywhere. Someone had to go into the jungle and harvest the plants, and he could have sent some of his employees to find this rare foliage. However, their job descriptions did not include facing piranhas, deadly snakes, and headhunters. This was a trip that no one wanted to make, let alone lead. So Chandler got out in front. He personally organized and led an eight-day expedition into the Amazon.

  This wasn’t easy. It was no adventure trip set up by a tour company. Several days into the journey, Chandler almost died. Burning up with fever and wracked by diarrhoea, he plunged into a nearby river to cool off, forgetting about piranhas and poisonous snakes. He was so sick, he just didn’t care. Fortunately, he survived and two days later, the fever broke. Shortly after that, with the help of native guides, he got his plants. David Nance, president of Intron Therapeutics and a longtime customer for more than 10 years commented, “Mark is equally comfortable in a loincloth, a lab coat, or a three-piece suit.” Employees, customers, and suppliers all knew that Chandler could be counted on to be out in front where the action was. Forbes at the time gave Inland Laboratories a price/earnings multiple of 40.3

  WHY YOU MUST GET OUT IN FRONT TO LEAD

  There are leaders who feel they must maintain total detachment. They believe they must coolly and carefully analyse the facts and make decisions without being influenced by outside factors or complications. From their viewpoint, this must be done away from the action, where the noise, pressures of time, and other problems distract from their ability to think calmly and clearly. This is wrong. They forget that the action is where they must be to get current and accurate information and to make their decisions based primarily on what’s going on where the action is.

  There is a place for contemplative thinking and measured analysis in most situations in life. But many who would like to have success have their priorities about this all wrong. The priority when action is taking place is that you must go where the action is; where people are actually engaged and those that are doing the actual work are making things happen. You cannot lead such actions from behind a desk in an air-conditioned office and be the real leader.

  WOMEN OUT IN FRONT

  Only recently is this being recognized. The US armed forces recently opened equal career opportunities for women by allowing them to serve in battle. In the last few years women successfully completed such arduous programmes as Ranger training and the Amphibious Officer’s course in the Marine Corps. Other women have fought in battle, undergoing the same dangers and hardships as men. And there are women who wear four stars, the highest general rank possible in peacetime in all US military services.

  During the Hundred Years War, in the 15th century, a young French girl was despondent because of the English invasion of her country. We know her as Joan of Arc. When she was 13, Joan began to hear voices which she identified as those of three saints. They gave her a mission: liberate France from English domination. For five years she was uncertain. She thought about it constantly but did nothing. Then she went to her monarch, Charles VII, and boldly asked for command of the French army. Can you imagine that? If you think that this would be difficult even in these days where men and women are at least moving towards equality in all fields, including the military, imagine how this would have been in Joan’s time.

  Charles VII and his advisors were so desperate that he actually gave her the command she desired. He had tried everything else with male commanders. The situation was so bad, that even the king’s counsellors agreed that Joan might be their only chance.

  Prior to Joan’s appointment as French commander, the English siege of Orleans had lasted eight months despite the best efforts of the French army to relieve it. Joan lifted the siege in just eight days. Her orders to her soldiers before attacking were simple: “Go boldly in among the English.” But she didn’t just give the orders. She got out in front. “I go boldly in myself,” she told the chroniclers of her age.

  Joan personally hated fighting and killing. Though she commanded the French army, and gave the orders, she did not struggle in hand-to-hand combat. Mounted on a horse, she carried a huge banner. Everyone could easily identify her by this banner. Then she rode with these colours and her staff to the place on the battlefield where the situation was most critical. That’s where most of the action was and where the danger was the greatest. The French soldiers saw that their commander was out in front; so that’s where they went, too.

  Being out in front is not just for show. In Joan’s case, it eventually led to her capture while attempting to relieve Compiegne a year later. Her captors burned her as a witch. They thought for any commander to be so brave and so successful, much less a young girl with no military training, she had to have demonic power. She had extraordinary power all right. But it was the power of the universal laws with emphasis on the one that urges the leader to get out in front.

  AN ACHIEVEMENT BY A WOMAN AIRMAN NOT ATTAINED BY A MAN

  In July 2018, a female general did something no man has yet accomplished. Lieutenant General Maryanne Miller had already become the first woman to become commander of the Air Force Reserves with 29,000 men and women and commanding a large percentage of the aircrew and combat aircraft engaged now in the Middle East. But yesterday, as I was writing this chapter, I received the announcement that General Miller had become the first reservist on active duty ever to be elevated to full general. That is, 4-star rank and to command Air Mobility Command a major active duty command not directly associated with the reserves.

  Only one other reservist has ever worn four stars. Famed aviator Jimmy Doolittle, who led the Tokyo Raid, won the Congressional Medal of Honor, and commanded the 8th Air Force in Europe during the Second World War. Some years after his retirement and before he died, he was selected for a special honour (no additional pay) and elevated to four stars by Congress to recognize his distinguished past services. General Miller is a pilot with
more than 4,800 hours flying a half of dozen different aircraft and she is still on active duty. She is in a different category.

  There are modern Joans in the boardroom as well as the battlefield, who get out in front today. Beth Pritchard was the chief executive of the US leading bath-shop chain, Bath & Body Works. Pritchard got out in front and demonstrated a special power, too. In addition to her corporate duties and responsibilities, she spent two days a month working ‘in the trenches’, in a Bath & Body Works boutique. She didn’t sit around observing or spend all her time handing out advice to employees. She saw and was seen; she taught, and she learned. She helped set up displays, stocked shelves, and arranged gift baskets. “Though,” she claimed, “I’m not really good on the cash register.”

  Whether she was good on the cash register or not seems not to have mattered. The power of getting out in front paid off. Her cash registers were full. When she took over Bath & Body Works in 1991, it had 95 stores and sales of $20 million. Five years later, the number of stores had increased to a whopping 750, and sales hit $753 million. In July 2008, the company announced that it was opening six new locations in Canada. Bath & Body Works currently operates more than 1,600 stores. In October 2010, it opened its first stores outside of North America in Kuwait. This demonstrated clearly the power of getting out in front, for male or female.

  TIME MAGAZINE ’S MAN OF THE YEAR WENT WHERE THE ACTION WAS

  In 2017, Los Angeles was announced as the city of the Summer Olympic Games in 2028. Los Angeles last had the Summer Games in 1984. These Games were made famous among Olympic watchers in the US by Peter Ueberroth, who was still only in his forties. He became Time Magazine’s Man-of-the-Year for 19845 and the Games were a great victory for him personally as well as an unusual example of what can happen when a determined leader gets out in front. President Reagan invited him to the White House, and he was routinely introduced to audiences as “the man who brought honour to America”. Yet before all this started, Ueberroth was practically unknown.