Universal Entrepreneurial Disciplines Apply Through Covid! Insights and Advice from Peter Drucker
Forward by Michael Griffin – 4-minute read
I read the Daily Drucker every morning to reflect on Dr. Peter Drucker wisdom and how his insights may give me direction in my business. Covid, for many of us, has radically altered our market landscape: for some greater profit and market share. For others, like myself, Covid has caused financial pain and a rethink of business models. Drucker has made it clear in two of his March Daily Drucker readings that we still need entrepreneurial discipline and a rethink of our objectives (to come out of Covid stronger). Let’s read his advice. I have adapted his insights to sync with the emerging post Covid world.
Drucker Lesson One: The entrepreneurial disciplines are not just desirable; they are conditions for survival (through Covid)
Every institution—and not only businesses—must build into its day-today management four entrepreneurial activities that run in parallel. One is organized abandonment of products, services, processes, markets, distribution channels, and so on that are no longer an optimal allocation of resources. Then any institution must organize for systematic, continuing improvement. Then it has to organize for systematic and continuous exploitation, especially of its successes. And finally, it has to organize systematic innovation, that is, create the different tomorrow that makes obsolete and, to a large extent, replaces even the most successful products of today in an organization. I emphasize that these disciplines are not just desirable; they are conditions for survival today.
Action Point: Abandon what is about to be obsolete (because of Covid), develop a system to exploit your successes (or survival through Covid) and develop a systematic approach to innovation (to emerge stronger and more resilient).
Drucker Lesson Two: Balancing (Post Covid) Objectives and Measurements is a must!
To manage a business is to balance a variety of needs and goals. To emphasize only profit, misdirects managers to the point where they may endanger the survival of the business. To obtain profit (or survival through Covid) today, they tend to undermine the future. They may push the most easily saleable product lines and slight those that are the market of tomorrow. (During Covid) they tend to short-change research, promotion, and other postponable investments. Above all, they shy away from any capital expenditure that may increase the investment capital base against which profits are measured; and the result is dangerous obsolescing of equipment. In other words, they are directed into the worst practices of management (that may doom the post Covid enterprise). Objectives are needed in every area where performance and results directly and vitally affect the (post Covid) survival and prosperity of the business. There are eight areas in which performance and objectives have to be set:
Market standing
Innovation
Productivity
Physical and financial resources
Profitability
Manager performance and development
Worker performance and attitude
Public responsibility
Different key areas require different emphasis in different businesses—and different emphasis at different stages of the development of each business. But the areas are the same, whatever the business, whatever the (current Covid) economic conditions, whatever the business’s size or stage of growth. Review and reflect on the eight areas in your business and how they might change post Covid.
Action point: In addition to setting profit objectives, set objectives for your business in the following areas: market standing, innovation, productivity,
physical and financial resources, profitability, manager performance and development, worker performance, and public responsibility.
Drucker wisdom to help us all come out of this Covid pandemic stronger and more resilient!
Michael J Griffin
Founder ELAvate!
Disciple of Drucker