Drucker on Being the Change Leader, Part 1

In his book, Management Challenges for the 21st Century, Peter Drucker analyzed and discussed the new paradigms of management.

Although much of the discussion revolves around the perspective of the organization, these are my takeaways on how we can apply his teaching on our journey of being a knowledge worker.

Drucker asserted that “One cannot manage change. One can only be ahead of it.”

While many of us seek the comfort of stability and status quo, the world rarely cares about what we want. In a period of upheavals with rapid change being the norm, the only ones who survive are the Change Leaders.

A change leader sees change as an opportunity. A change leader looks for change, learns how to find the right changes, and work to make them effective both outside and inside of the organization. Change leaders need to be aware of four elements, with element number one being “Policies to make the future.”

The first policy—and the foundation for all the others—is what Drucker called “Organized Abandonment.” By committing to abandoning and doing so intelligently, our actions can free up resources from being committed to maintaining something that no longer contributes to performance and produces the results we seek.

Abandoning the actions of yesterday, or the sunk costs, is hard to do for organizations and individuals. Instead of thinking we have “low-cost assets” and asking the question of “What have they cost?” we should always be asking the question of “What will they produce?”

As a change leader, we need to scrutinize every one of our actions and results on a regular schedule. We must ask the question and ask seriously.

“If we did not do this already, would we, knowing what we now know, go into it?” If the answer is “no,” our reaction must not be “Let’s make another study.” Our reaction must be “What do we do now?”

In a period of rapid change, the “How?” is likely to become obsolete faster than the “What?” Therefore, we must practice the acts of “To Abandon What” and “To Abandon How” systematically. Otherwise we will always postpone the necessary action because those actions are never comfortable choices.

The next policy for the change leader is “Organized Improvement”  or what the Japanese call “Kaizen,” according to Drucker.

To continually improve what we do, we must be mindful of what constitutes “performance” in a given area. We need to define clearly what “performance” means and how we can measure improvement.

For organizations, continuous improvements in any area eventually transform the operation. They can lead to new processes, product and service innovation, or even new businesses. Eventually continuous improvements lead to fundamental change for both organizations and individuals.

Drucker suggested that the third policy that the change leader needs is the “Exploitation of Success.”

When we examine what we do on an on-going basis, we most likely focus more on problems rather than opportunities. No, we cannot ignore problems, and we need to address serious problems. As change leaders, we must also focus on opportunities.

Drucker believed that successful change leaders must starve problems and feed opportunities. Another word, taking care of problems as we must but making sure we fund the opportunities with resources as a priority.

This feeding-the-opportunities approach implies that the first—and usually the best—opportunity for successful change is to exploit our individual’s successes and to build on them.

As in continuous improvement, exploitation will eventually lead to genuine innovation. By accumulating the small steps of exploitation, we put ourselves in a position to produce a major, fundamental change on what we do. That change can potentially bring us a positive result that is genuinely new and different.