Peter Drucker is my favorite business writer, bar none.
While some contemporary business writers remind me of a Ferrari or a Maserati, I liken Drucker to the Bentley (pick your make and model). Class, performance, enduring.
While I believe the words of Drucker are timeless for all business owners across the globe, I sense a growing segment of entrepreneurs who prefer a quick read requiring little thinking. Conversely, Drucker is not someone to be read, but rather to be studied and absorbed. The results can be priceless over time.
What Would Drucker Ask You?
Suppose you could spend one precious hour with Mr. Drucker. Would he be inquisitive? Would he be judgmental of your past business decisions? Or would he be helpful?
I have no idea how that conversation would unfold. But somewhere along the way, I bet he would ask you the following questions.
1. Who is your customer?
That’s the first question I ask every business owner wanting to engage me as their free agent CFO. My favorite answers are the ones where the CEO can paint a beautiful portrait of what the profile customer looks like down to every wrinkle and wart, if any. These business owners have the courage to walk away from the customer base that is not a fit for their company. But that’s hard and is typically the exception.
The answers I do not like to hear are, “Anyone in my market that can walk, breathe, and write a check.” These are the owners that need cash and cannot afford to turn any business down. And in some twisted sort of way, these very customers can become an albatross sucking up time, energy, and resources that simply do not exist.
Knowing who the customer is and who is not requires much discipline. The better that question can be answered, every facet of the business gets a bit easier – marketing, operations, sales, and even administration.
2. What needs to be done, and done right now?
Oddly, this may be the hardest question of all. So many small business owners are in constant firefighting mode, so they know what fires need to be smoldered immediately. But that’s not how I interpret the question. I read it as, “What’s most important right now, and what are you doing about it?” Big difference.
I have worked with three types of business owners since I’ve been working as a part-time free agent CFO for small to mid-sized businesses. First, there is the CEO knowing what needs to be done and they are steering their team in the right direction. They will be first to tell you the ride is bumpy and imperfect, but that they know where they are headed and will traverse each obstacle as best as they can.
There’s the business owner that knows what to do, but cannot pull the right strings. The good business owners will eventually reach out for help. Others will continue to flounder just eking by from year to year with little to show for their efforts over time.
And the last group I have worked with includes ultra-high, ADD-type business owners that are never short on ideas and cannot focus on just one or two strategies. Like the business owner above that continues to flounder, this owner’s sales will continue to be a flat line because the business owner is moving in too many directions. Chaos is the norm in this setting.
Answering this question may just be the most important exercise you will ever perform as a business owner, and it’s one that needs to be answered regularly.
3. Do you know your strengths?
Building upon one’s strengths was a major staple in Drucker’s writings. He makes that point very clear in The Effective Executive.
As a small business owner, this one is hard if sometimes not impossible to overcome. What I mean is that in the ten-person organization, the business owner has to be everything (almost). Whether in good times or bad, the business owner has to play their A-game in all facets, even in their weak areas.
But as the business scales, the best owners I have worked with have figured out how to spend the most time where they are great, and they delegate where they are weak. I cannot think of a better person to describe this critical need than Dan Sullivan of the Strategic Coach, and I would encourage you to read his short book on this topic called Unique Ability: Creating the Life You Want.
I have no idea what Mr. Drucker would ask you, but these are the three questions I would want him to ask of the CEOs I serve if he were living today.
Thankfully, the Peter Drucker legacy continues through his many books on management. If you have yet to read a Drucker book, here are two I would start with:
1. The Daily Drucker is a book that should be on your desk, not in the bookcase. The book includes 365 short passages which have been compiled from his other books. Each reading takes only a few minutes.
2. And if you like the above, I would read the Effective Executive. Dated? Maybe a little. Hard to read? Again, a little. But only read a chapter a day. Study, don’t speed read.