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How Drucker taught me to focus

by Shao Ming Lo

Institute, No.56, Spring 2010

T

en years ago I founded the Peter F. Drucker Academy (PFDA) in China with the help of Dr. Drucker. During one of my visits with him,and after we discussed the Academy’s developmentplans, he said, “You look very tired. I find that you are always completing several things at the same time, and you tend to be personally involved in each one of them. If you continue like that, you would most likely do quite well in each task but not excellently in anyone of them. The other outcome is that you will burn yourself out.” Drucker then asked me what I think is the most important task for the academy in the next two months. I listed four or five different tasks buthe shook his head and said, “You didn’t answer myquestion. In each stage there is only one most important task.”

There is only one most

important task.

This was the first time someone pointed out to memy problem of not being able to focus when I develop my business. Drucker’s words caught my attention but I did not really understand them at the time, at least not until years later when I systematically studied his books. 

I am an entrepreneur who started from nothing. I founded the Bright China Group, which used to own several business units engaged in different businesses. Through our exploration and contemplation of our mission, objectives, and key activities, we have nowgreatly narrowed down that diverse set of business units. The group’s core business is now defined in these terms: 

“To use Drucker’s knowledge to help China’s enterprises and public service organizations develop management and managers.” 

Design several different

tasks to make them one.

The business unit that supports this core business is the Peter F. Drucker Academy. The role of all other businessesunder the Bright China Group, including ourother for-profit businesses, is to support and complement this core business. Within the PFDA, we have also undergone this refinement and adjustment. We have used Harvard’s online programs, and we have also conducted Entrepreneurship training programs throughout China. These might be worth continuing if we want to increase our revenue and make ourselves better known, but they also distract us from achieving our mission—so we have discontinued them. After this continuous process of consolidation the efficiencyin the use of our resources has markedly improved, and we now have more resources to invest in mission oriented innovative projects. 

In his famous article “The Theory of the Business,” Drucker posed his most classic question, “What is our business, what should be our business?” Change this question from addressing a business to an individual, and it becomes “What is my job? What should my jobbe?” In fact, this amounts to asking organizations or individuals what their mission is. This is where we derive the specific objectives we have to achieve in different areas, and the kind of key activities we have to engage in to achieve them.

Three Insights 

Strategy is in fact the art of

focusing.


Once we identify our key activities we should commit our resources to them in order to produce outstanding results. This is strategic thinking and the essence of the strategic planning process. Strategy is in fact the art of focusing. This may sound simple, but it is easier said than done. For me, although I have spent ten years exploring and thinking about this, I only have the following preliminary experiences and insights to report. 

Pursue Excellence 

My first insight is, if you have a choice of doing severalthings that are very meaningful to you (for example, several business units under a holding company, or several different products or services in a business unit) you should pick one of them that suits you best, andthe only test of suitability is performance—others maynot be able to do it, or can do it with difficulty, but youcan use the same or less effort and still perform better than others. In other words, you can choose to pursue excellence rather than mediocrity by picking your tasks.You can then set a performance standard that is higher than what is commonly accepted, and this task will become the most motivating one to you, as well as theone that can give you the greatest results.

Drucker and Buffett have

much in common.

The Challenge of Acting 

My second insight is that regardless of planned abandonment or innovation, management’s biggest challenge is not knowing what to do, but acting. This is what Drucker referred to as “the moral courage ofdecision making.” An organization or individual isalways under pressure and exposed to temptation from internal and external sources. Our habits, desire for novelty, pride, and power make us vulnerable to these pressures and temptations. To do the right thing is always painful and lonely. No matter how hard you tryto communicate, even if you are good at it, you may beseen as the opposite of what used to be a well-regardedand respected boss. In times like these, in order to persevere, you can only believe that “God can see.” Those who are not religious can substitute the phrase “time will prove everything” to motivate themselves.

Making One Out of Many 

My third insight is that we should try to design several different tasks to make them one. When I was young I had the ability to memorize up to a hundred different numbers. People thought I had a great memory butwhat I did was merely memorize several key numbers, figure out their relationship, and then calculate the rest of the numbers in my mind. I have used this ability to figure out the relationship between different tasks in my business. No matter how hard you focus your efforts there are always too many tasks, requiring more resources than any organization can commit to, and requiring more time than an individual has available. These tasks are always essential and you cannot simply pick one and abandon the others. Rather, you should think what the objectives of each task are, think ofall these targeted achievements as a whole, and see ifyou can redesign one of the tasks so that in achieving it, you also achieve the objectives of other tasks at thesame time. 

For example, in the Bright China Group, the management committee meets once every six months for two days. In the past, we have had to make a lot of specific decisions in these meetings. As the chairperson I have to spend a considerable amount of time in order to understand these matters and their background and to prepare an agenda that covers all the businesses. On the other hand, between meetings members of the management committee have to maintain close communications with one another to update their strategic thinking, report on the current situation in their area of responsibility, and share their insights and what they have learned. This exchange of information requires time from each member, but since they are all very busy this important communication function is often neglected.

When we reconsidered the function of these meetings and the objective of these communications, as well as the relationship between the meetings and communications,we decided to change the way these meetings were conducted. We stopped using meeting timeto make specific decisions but rather used it to fully communicate between members, focusing on strategic development and related matters. With improved communications, each specific decisionis now made by the executive who is responsible for that area of business. This allows us to strengthen the function of our meeting, which is to clarify our strategic direction and enable the decision for each specific matter to be more consistent with the overall strategic direction. Moreover, it also reduces the time required to prepare for the meeting and its agenda. All I have to do is to organize my notes on strategic thinking, whichI jot down from time to time. With that, I already have a good outline to guide the discussions at meetings. Here is another example of taking different tasks and making them one. For a long time within the Bright China Group our investment business seemed to bemostly unrelated to the Peter F. Drucker Academy. In our investment business, we have faith in Warren Buffett’s principles, and have used his evaluation standards and procedures to choose our investment targets. As wehave gradually deepened our understanding of Drucker’smanagement principles and of Buffett’s investment principles we found that they have much in common.

A good enterprise’s strength is rooted in its management.Its long-term economic characteristics, superior financialperformance, and secure debt structure are all the resultsof good management. Management’s integrity and rationalityare characteristics that both Drucker and Buffett have emphasized. With that in mind, we have consciously applied PFDA ’s competence in our investment business, and at the same time used the relationships from our investment business to develop the PFDA.

As an example, we once wanted to increase our equityholding in a high-quality enterprise that we had invested in. Before doing so, Bright China’s investment people visited it and found that its senior managementwere indecisive and troubled by their need to diversify. As an external investor, we reviewed their entire business from the basics and came up with our recommendations on their strategic positioning.

They found our input extremely valuable, and they further agreed to reference the contents of Drucker’s“Business X-ray” when they receive a copy of Drucker’sbook “Managing for Results” from us. They will start by looking at their existing categories of products and proceed to systematic strategic thinking. Further, they have agreed to become one of the first corporate participants in PFDA ’s latest innovative experiment—tobuild a lifelong learning system in their enterprise and pay for PFDA ’s services. Thus our investment team has not only completed their own work, but they have also helped PFDA’s marketing and sales promotion.

There are in fact many opportunities to redesign different tasks and make them function as one. They shouldalso be extended to combine the fulfillment of one’sresponsibilities with one’s personal development. As Drucker pointed out, Descartes’ modernism—an approachto thinking that has dominated Western thoughtfor more than 300 years and that views the whole as the “sum of its parts”—is already invalid in explaining today’s reality. In its place is what Drucker called thepostmodern paradigm and worldview, which advocates holism—it is only by understanding the entirety thatwe can understand the individual parts. In other words,it emphasizes attention to the inherent relationship between different parts of the whole. Only through this understanding can we make our complicated and difficult work more vivid and interesting, meaningful and not monotonous. In doing so, our workload will lighten, our performance will be enhanced, and our personal development will be accelerated.

    

Issue No. 56
Spring 2010

 

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