Peter Drucker’s Tenets

Peter Drucker, a writer of 39 books and a management consultant, was considered the “father of modern management”. An avid student of managing complex businesses, he was the advisor who helped mold many corporations into industry leaders which forged this country’s ability to become an economic super power.

A Sampling of Mr. Drucker’s Tenets:

“In most business failures, the board was the last to realize that things were going wrong.”

“Managers should make a decision no later than you need it, but as late as possible, because you always have more information.”

“Do reported profits exceed the cost of capital? Review and audit capital allocation decisions of the past year.”

(I suggest random sampling of capital expenditures for prior years and reviewing several to determine if the forecasted return on investment was achieved.)

“Above all management is responsible for producing results. Profit is a requirement for a company…profitability is not the purpose but rather the test of their validity.”

“Management is about human beings. Create an atmosphere where people are permitted to make mistakes.”

(His simple advice to clients: “It’s all about the people.” He was concerned with retaining “knowledge workers” which today most companies describe as the “A” level employees.)

“Never promote an employee on the basis of his or her potential, but based only on performance.”

“Picking a leader: would I want my son or daughter to work under that person?”

Source: The Daily Drucker”, 2004


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