Peter Drucker 5 Rules for SuccessfulStartup Founders and Entrepreneurs in 2019
WhilePeter Drucker is thought by many to be the inventor of management itself, it’sabundantly clear that the entrepreneur was a leader in every other way. It’strue, Drucker is widely regarded as the “Father of Modern Management” yet hisphilosophy and thought process was so influential that it even transcended theworld of business.
Butwhat was Drucker best known for exactly?
Asidefrom writing several best-selling books on management, the talented Austrianwas also responsible for coining many of the most common leadership relatedstrategies, terms and ideas. For example, Peter was the first leader to statethat employees should be treated as asserts to a business as opposed toliabilities. While this is now part of common thought, it was incredibly uniqueduring the 1950s and something that most leaders might consider a sign ofweakness at the time.
Aspart of this theory, Drucker also became a famous advocate for creating a morecollaborative and flexible workplace, while emphasizing the importance ofdistributing power across the board.
Let’slook at five rules for successful entrepreneurs and startup founders accordingto Peter Drucker:
1. Creating Leaders andAsking the Right Questions
Whilemost theory or practice tends to fade away over the years, Peter Drucker hadcreated a management theory that is just as relevant as it was back in the1950s. Unlike his contemporaries, Drucker believed that companies should establishharmony in the workplace and create leaders instead of managers.
Morespecifically, he stated that these individuals should take a decentralizedapproach to management and place great importance on a process called ‘SMART’which is based on an acronym that includes specific, measurable, attainablerelevant and time-based. With this in mind, the system proposed thatflexibility should be instilled, collaborations encouraged and leniency appliedin terms of working hours.
Inmany ways, startups and entrepreneurs can learn from this strategy by focusingon working smarter as opposed to just working harder. Also, it’s important toremember that success should be measured by results and not always how thoseresults might be achieved.
Takeaway — Managementmight be about doing things right but leadership is all about doing the rightthings. How can you help employees or colleagues get things done? What can youdo to contribute to the process? Where can you help the company improve? Theseare the questions that should be asked.
2. Delegating Power toMotivate Others
Asalready mentioned, Drucker was an advocate for decentralization, and he wantedemployees to feel empowered and valued by management. As a rule, this ofteninvolved setting specific tasks and creating a level playing field so thatmanagers and subordinates could work toward a common goal.
Now,that’s not to say these managers had no authority but rather to highlight theway in which this approach could encourage employees to interact. What’s more,these employees were also much more likely to share ideas and takeresponsibility for whatever actions they might take in the workplace.
Asa startup founder or entrepreneur, you should know that workers will feelconfident and motivated if you treat them as equals. For this reason,communication is essential and the way in which you communicated should tellthese subordinates that their opinion and input matters in the company.
Takeaway – Delegatingpower is more likely to motivate members in the startup, while improving communicationin this sense is also sure to produce better ideas and constructive solutionswhen necessary.
4. Hire Problem Solversand Innovators
PeterDrucker refers to these individuals as knowledge workers. Simply put, theseemployees handle or use important data and this most often pertains to analystsor engineers. Either way, these workers offer incredible value to a startup orentrepreneur in that they can think creatively and help solve problems.
Infact, Drucker correctly predicted that blue-collar workers would account forless and less of the work force as time went on. If you take a look at thedigital word of today, this is certainly true and most of the highest paidindividuals in any industry are qualified data analysts and engineers.
Ifyou need further reasons to hire such professionals, these employees tend to beconfident and creative, which can nurture a much more innovative atmosphere inthe startup.
Takeaway – Hire skilledindividuals who will think creatively and help inspire the rest of the team.
3. Creating Structure andSetting Shared Goals
‘Managementby objectives’ (MBO) is another concept by Peter Drucker which helpedbusinesses create a more efficient structure. As part of the process, team inan organization is given shared goals and tasks are delegated to members ofthese teams according to skills and abilities.
Incase you might be asking yourself, here are the five steps involved with MBO:
- Review Team Goals
- Set Specific Objectives
- Monitor Ongoing Progress
- Evaluate Individual and Team Performance
- Reward Members for Worl
Asfor how startups and entrepreneurs might implement the process, it’s importantto bring the team together and explain the overall objective in mind. At thispoint, individual goals can be set and these should always abide by the SMARTprocess mentioned previously.
Accordingto Drucker, this system is all about principles and focusing on one item at atime. Moreover, it’s important to identify patterns and ensure that action istaken to ensure that problems do not happen again. In other words, you will likely encounterproblems but reoccurring problems is a management flaw that needs to beeradicated right away.
Takeaway – ‘Management byobjectives’ can create structure for a startup founder or entrepreneur andshared goals is a powerful way to make progress and alleviate problems in thefuture.
5. Encourage Employees toCollaborate
Mostcompanies have a tendency to pit employees against one another whereas Druckerinsists that startups should always try to foster a collaborative environment.For this reason, it’s important to urge employees to share ideas or guidanceand seek assistance from another member whenever needed.
Infact, you should notice that every aspect of Drucker’s theory seems to revolvearound this need for collaboration. For example, he also said that the mostimportant part of communication is ‘hearing what isn’t said’ and collaborationis the only way to get beyond this obstacle.
Eitherway, collaborations lead to better relationships, increased motivation andimproved ideas, while the opportunity to work closely with colleagues iscertain to foster a team-orientated environment.
Takeaway – Fostercollaboration and avoid pitting employees against each other.
It’strue, Peter Drucker was a leader in thought and incredibly accurate in terms ofwhat does and does not work in modern management. It’s also true that most managementrelated theory from that time is now outdated but the above rules are certainlystill relevant for the startups and entrepreneurs of today.