I’ve written on this blog before about my affinity for Peter Drucker.  Anyone that is a student of management theory and genuinely interested in building kick-ass businesses needs to read the Essential Drucker.

This morning I read an article on the Harvard Business Review site: Why Peter Drucker Distrusted Facts

Drucker provides several theses supporting this broad assertion:

  1. If we do not make opinions clear, we will simply find confirmatory facts. “No one has ever failed to find the facts they are looking for.”
  2. An opinion provides an untested hypothesis. Once we have clarified the hypothesis, we can test it rather than argue it. “The effective person…insists that people who voice an opinion also take responsibility for defining what factual findings can be expected and should be looked for.”
  3. Decisions are judgments, not a choice between right and wrong. Oftentimes they are “a choice between two courses of action neither of which is probably more right than the other.” So we must understand the alternatives fully.
  4. Big decisions may require new criteria. “Whenever one analyzes the way a truly great, a truly right, decision has been reached, one finds that a great deal of work and thought went into finding the appropriate measurement. The effective decision-maker assumes that the traditional measurement is not the right measurement…The traditional measurement reflects yesterday’s decision. That there is a need for a new one normally indicates that the measure is no longer relevant.”
  5. Ironically, opinions break executives free of pre-conceptions and poor imagination. Disagreement is a safeguard against being a prisoner of the organization and seeing an issue just as underlings want. Drucker quotes the famed General Motors boss Alfred P. Sloan, who after hearing executives unanimously support a decision reportedly said, “I propose we postpone further discussion of this matter until our next meeting to give us time to develop disagreement and perhaps gain some understanding of what the decision is all about.”

If you’re like me, then you and your business are in the timezone known as “planning season”.  That time every year when corporate managers ask their people to come up with designs on how they’re going to grow the business next year.  I’ve been doing these drills for years and years and with companies of all shapes and sizes both public and private.  The sad truth is that nearly everyone does it wrong.  And the odd part is nearly everyone has all the facts and figures they would ever need.  Problem is that the facts and figures can be used to manipulate nearly whatever outcome the person manipulating them wants to occur.  The opportunity for missteps and miscalcuations is everywhere.

Its a few brave souls that really dig down, way past the surface and really get underneath the issues.  They actually can feel the motivations in the market.  Understand what creates the customers of thier offerings.  These people are the ones that we need to listen to.  They aren’t always the most articulate.  They aren’t always the most senior.  And they don’t always see the greater nuances of the strategy or mission.  That’s where the work of the corporate managers should come in.

Perhaps its weird, or sadistic, but I really like the planning process.  Its the time when I get to see just how much people really know about the environment they operate in.