Foreword
I grew up with Peter Drucker. My father spent 25 years in human resources management at General Electric and another decade leading HR at Chase Manhattan Bank. He met Peter at GE’s Crotonville training center in the 1950s and always had Peter’s books in his study at home. When I was in college, I would occasionally flip through classics like The Effective Executive and The Practice of Management.
But I didn’t get serious about Drucker until I was in my mid-20s and responsible for the Navy Exchange Service and retail operations at the U.S. air base in Atsugi, Japan. This was my first real business job, and I needed a business education fast. Drucker was it.
Almost 30 years later—after the navy, Harvard Business School, and more than 22 years as a manager at Procter & Gamble—I took the initiative to meet Peter personally. It was 1999, and I had just returned from a five-year stint running P&G Asia. The company was in the midst of what was arguably the most ambitious strategic and organizational transformation in its then 162-year history.
I was responsible for P&G’s North America region, the company’s home market, and for creating a new global beauty and personal care business. I called Peter and asked if he would see me. A week later, I found myself sitting in his modest Claremont, Calif., home talking about a world he had thought about for 60 years (and I had worked in for 25).
I had hoped for an hour of his time. We chatted for four. For every question I posed, Peter had two or three more to consider. That exhilarating first exchange provided the themes that he and I would return to again and again over the next six years: the customer, innovation, strategy, and leadership.
A flood of memories from those conversations came back to me as I read this collection of columns by Rick Wartzman. Rick hits on many of the same subjects that Peter and I discussed, and he brings these principles to life by applying them to current topics. Each column is like a mini-case study, written in a style that, like Peter’s own, is pragmatic and accessible (and simply fun to read).
As I spent more time with Peter, we ultimately took up a topic that he turned to in the last years of his life: the unique work of the CEO. His final column for The Wall Street Journal, which ran in December 2004, about a year before he died, explored this subject. My May 2009 Harvard Business Review article, “What Only the CEO Can Do,” combined Peter’s thinking with my actual experience in that job at P&G in the first decade of the twenty-first century.
As CEO, I was a shameless disciple of Peter Drucker. He said, “The purpose of a business is to create and serve a customer.” Plain and simple. At P&G, the consumer was boss, and consumer-driven strategy, brands, and innovation drove our business and financial growth. We focused on delighting current customers and attracting new ones by providing offerings that better met their wants and needs. We understood that the smartest way to conduct consumer research is to actually experience what the customer does. That’s why, whenever I traveled, I personally went into the homes of our customers. It was essential to understand how these people—mostly women—used our brands and products. I also shopped with them, so I could experience how they made their purchase choices.
Peter insisted on the practice of management. He had little patience for detached theory or abstract plans. “Plans are only good intentions unless they degenerate into hard work,” he liked to say. I focused on the few strategic choices that would give P&G sustainable advantage. I also focused on consistent, excellent execution, because I knew that the only strategy our customers (and even competitors) would ever see was what we executed in the store and in the home every day.
Peter also insisted on leaders taking responsibility: “Management is doing things right; leadership is doing the right things.” As P&G CEO, I knew we needed consistently good everyday management. But we also needed leaders. Leaders were the difference maker in our company, and leadership was a core value expected of every P&Ger.
Of course, as CEO, I had a special leadership responsibility as Drucker saw it—namely, to shape the values and standards of the entire company, as well as to be a role model in terms of morals and ethics. This responsibility is only going to become more important in a world of ever-increasing demands and expanding company constituents.
More broadly, Drucker maintained that the CEO was the “chief external officer” for the corporation—“the link between the inside, where there are only costs, and the outside, where the results are.” For many reasons, businesses and other organizations invariably become inwardly focused. Peter argued that the CEO must counterbalance this tendency; he or she has primary responsibility for bringing the voices of the market, customers, competition, partners, and shareholders into the company. I always wanted the “hot breath” of a globally competitive, unpredictable, and volatile marketplace to be felt in the corridors of P&G. I wanted us to come to grips with the reality of the outside world—to see things as they actually were, not as we wanted them to be.
Peter’s ideas remain as relevant and important today as they always were. They are simple but powerful—and eminently practical. Clearly understood and well executed, Drucker delivers results.
What better way to understand the relevance and importance of Peter Drucker than to read this collection of “Drucker Difference” columns. Rick applies Peter’s teachings to current real-world challenges and opportunities. His clear writing and thinking demonstrate the practice of good management the way Peter would have wanted.
As Peter said, “A time of turbulence is one of great opportunity for those who understand, accept, and exploit the new realities.” This collection is like a road map for those who are intent on doing just that.