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.
Drucker believed that innovation is a practice, something that we can learn to do by applying hard, organized, purposeful work. He discussed the five “dos” of innovation.
- Purposeful innovation begins with a systematic analysis of the opportunities.
- Innovation is both conceptual and perceptual.
- Effective innovation must be simple and focused.
- Effective innovations start small, not grandiose.
- A successful innovation aims at the leadership of something.
Drucker also outlined three things that we should not do when building a practice of innovation.
- Do not to try to be clever. Keep things straight-forward!
- Do not diversify or try to do too many things at once. Focus!
- Do not try to innovate for the future. Innovate for the present!
In addition to the above points, Drucker believed that the following three conditions are necessary for successful innovation.
- Innovation is hard work and requires focused and purposeful effort which makes very high demands on diligence, persistence, and commitment. Innovation also requires a great deal of knowledge and ingenuity. These prerequisites imply that innovators rarely work in more than one area. While there are certainly very talented innovators with tremendous capacity, it is tremendously difficult for an innovator to look after several areas simultaneously.
- Drucker believed that innovators must build on their strengths to succeed. Successful innovators look at opportunities over a wide range, but they always look for the few opportunities that fit well with them. Successful innovators know that they must be doing something that they are good at doing and have the capacity to execute. Also, because the risks of innovation and the premium on knowledge and performance capacity the innovators must incur, very few innovators will be willing to put in the persistent, hard, frustrating work that successful innovation always requires.
- Innovations do not exist for their own sake. Innovation has an effect of a change in the economy and society. The effect could be a change in the behavior of people or a change in a process. For those people or process reasons, innovation always must be close to the market, focused on the market, and becomes market-driven.
Finally, Drucker wanted to dispel the myth that all innovators are idealistic risk-takers. The innovators Drucker knew were successful where they define risks and confine them. They were successful where they systematically analyze the sources of innovative opportunity, then pinpoint the opportunity and exploit it. In the end, all successful innovators go after the opportunities that could be big or small, but still with definable risk.
Successful innovators, therefore, are conservative. They must be, or they can find themselves out of the game due to single or a handful of failures. Successful innovators are not “risk-focused”; instead, they are “opportunity-focused.”