Leadership in the Midst of Turbulent Times

25/04/2018

Drucker's formula for surviving in turbulent times.... 

After spending time with a valued client this week and reviewing what can only be described as a stellar performance by his business I was struck by his eagerness to play down his considerable successes and him reminding me that “all boats rise with the tide”. Despite his successes my client was undoubtedly still wary
of what lies ahead with factors such as Brexit, global political and economic uncertainty looming large.

His comments made me reflect and recall how the famous Harvard professor, Peter Drucker, came up with his all- powerful formula for surviving in turbulent times. I was left wondering how many leaders would really know how to adapt quickly if faced with more “turbulent” times in the near future.

Drucker’s formula was based on 4 key strategies for surviving turbulent times, namely;
· Organized Abandonment,
· Continuous Productivity Improvement,
· Exploitation of Successes and
· Innovation.

Drucker’s strategy of Abandonment was centred on the theory that only by abandoning the obsolete and unproductive activities in an organisation could that organisation survive. Drucker equally argued that abandonment and concentration are opposite sides of the same coin. In essence, only by abandoning unproductive & sidetracking activities, could executives increase their effectiveness by having more time to concentrate on result areas.

Put another way – “LESS IS DEFINITELY MORE”!!

Its therefore critical that successful leaders follow a systematic process of asking themselves – what should we
abandon, how and by when?

Drucker’s 2nd strategy was that of Continuous Productivity Improvements. Akin to the Japanese Kaizen approach Drucker was a firm believer in the fact that Leadership in turbulent times was about systematic continuous improvement of products and services, production processes, marketing, service, technology, training, and development of people and the like.

Underpinned by robust benchmarking and measurement the theory is that success gets sustained by cultivating the right efforts and by getting everyone in the organization to do things a little better day in day out.

Drucker’s 3rd strategy was centred around organisations learning to Exploit Success. Drucker believed that by the time an organisation has doubled in size, the way it perceives and services its market is likely to have become inappropriate… In particular, the ways in which the traditional leaders define and segment the market no longer reflect reality, they simply reflect history.

Exploiting success therefore requires leaders to build an opportunity- focused organization as opposed to one focused on solving problems. In doing so there comes a point when the small steps of exploitation result in a fundamental change i.e. in something that is generally new and very different.

Drucker’s 4th & final strategy of Innovation was centred around his belief that innovative companies and leaders realize that they cannot simultaneously create the new and take care of what they already have. The maintenance of the present business is far too big a task for the people in it to have much time for creating the new, different business of tomorrow.

Consequently specific, dedicated resources need to be applied to fuel true innovation and these resources need to be organized outside of the ongoing managerial business to have chance of succeeding.

Returning to my client’s comments and by way of conclusion, whilst Drucker’s work was initially published many years ago I can only conclude that it has great validity even today.

Furthermore, I think it’s easy to see how today’s leaders that are intent on creating sustainable, competitive advantage need to be applying these very same principles each and every day, be it in good times or bad.

Written by Chris Spratling

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