Drucker on Effective Decisions, Part 5

In his book, The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management, Peter Drucker analyzed the ways that management practices and principles affect the performance of organizations, individuals, and society. The book covers the basic principles of management and gives professionals the tools to perform the tasks that the environment of tomorrow will require of them.

These are my takeaways from reading the book.

Most books on decision-making tell the reader first to find the facts. Drucker believed that effective decision-makers first start with opinions. They understand that the right decision grows out of the clash and conflict of divergent opinions and out of the serious consideration of competing alternatives.

Very often, getting the facts first is impossible. If we had the facts that come with the proper context and relevance for the problem at hand, we would not need a decision. We merely need to make the necessary adjustments to solve problems.

Also, Drucker asserted that asking people to search for the facts first is undesirable. We will simply look for the data that fit the conclusion we have already reached. In the end, no one has ever failed to find the facts he/she is looking for.

Therefore, the rigorous method for effective decision-making must be base on the clear recognition that opinions come first. When we start with opinions, we can see what untested hypotheses we need to work with.

We all know what to do with hypotheses. We do not need to argue them, and we need to test them. By doing the hard work of experimenting and testing the opinion against reality, we will find out which hypotheses are tenable, and therefore worthy of serious consideration. We also find out which opinions can be eliminated by the observable experience.

Drucker suggested that the crucial question we should ask is, what is the criterion of relevance? We need to have a measurement in place to demonstrate that our hypothesis testing can produce information that is relevant to the decision at hand.

The best way to find the appropriate measurement is to go out and look for the “feedback” discussed in the decision process model – only this is the “feedback” before the decision.

The effective decision-maker assumes that the previous measurement is not the right measurement anymore. Otherwise, a simple adjustment would do, and there would be no need for a decision. The previous measurement reflects yesterday’s decision. The need for a new decision indicates that the previous measurement is no longer relevant.

Finding the appropriate measurement is therefore not a mathematical exercise, but a risk-taking judgment. Whenever we need to judge, we must have alternatives among which to choose. When there are alternatives, we then can hope to get insight into what is truly at stake.

In summary, effective decision-makers insist on alternatives of measurement — so that they can choose the appropriate one.