9/24/2019 3 Questions Drucker Would Ask You And Your Management Team | Management Matters Network

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3 Questions Drucker Would Ask You And Your

Management Team

Robert Swaim, Ph.D.

 07/10/2017

Pretend that Peter F. Drucker were alive today and you were about to engage him - the world’s foremost authority
on management - to spend a day at your company with you and your management team. You want advice as to
the direction your company should take and are concerned about how your company can compete in a dynamic
and rapidly changing global economy.

If you do invite Drucker to visit your company - don’t expect any answers from him. Yes, you heard right. After the
meeting, he will not even send you a report. If you want a report, it will be double spaced on one page, list 10 or 15
questions you and your management team need to answer, and you will have to pay an additional consulting fee.
This had been his standard consulting practice for almost 60 years.

You are therefore probably asking yourself, why should we pay his expenses and his extremely high consulting fee
if he is not going to give us any answers? We need answers.

You know however, that many of the largest corporations, non-pro t organizations, and governments in the world
continued to request his consulting services even at the age of 95 – why? You decide to contact some of the
companies he has consulted with, such as General Electric and other Fortune 500 companies, and they advise you
that you will not be disappointed in bringing Drucker to your company.

They tell you that he will not provide you with any answers, but with the right questions you and your management
team should be asking yourselves – then you will have the answers. He will not give a lecture, but he will provide
you with insight on a number of important issues for your company’s management to consider such as, what do we
know and not know about the future, and what this might mean for your business strategy?

The key questions Drucker asks you to answer are applicable anywhere and therefore as you review this article
consider how you would respond to Drucker’s questions relative to your own organization. Are you ready for his
visit?

What is the purpose of your business?

You and your management team are in the conference room, Drucker enters and after introductions, he asks you,
"What is the purpose of your business?" How would you answer him?

If you said, to make a pro t, he laughs and in his Viennese accent, informs you that, "You don’t know anything about
business" and adds, "The answer is not only false, it is irrelevant." He then goes on to explain to you that "THE
PURPOSE OF A BUSINESS IS TO CREATE A CUSTOMER."

Here’s what he means by this de nition of the Purpose of a Business and what he has written on the subject
including the key questions that management needs to ask in order to formulate strategies to create and retain
customers. We will not ignore your most likely answer to his question, to make a pro t, as Drucker puts pro t into
its proper perspective later in this article.
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The 3 Key Questions Drucker Asks You in the Morning Meeting

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Drucker goes on with the meeting. "Gentlemen, at the end of today’s meeting you will want to be able to determine
how you are going to answer the following three key questions:

What is our business?

What will our business be?
What should our business be?"

Question 1:

What Is Our Business?

Here is some insight from Drucker. "What is our business focuses on de ning the Mission of the business. And the
rst and most critical question to be asked in de ning the Mission of the business is, "Who is the customer?"
Drucker adds, "That there are usually two or more types of customers for a business.

As an example, for a business involved in branded consumer products, the grocer is one customer, getting shelf
space in his stores, and the housewife is the other customer, will she buy your product when she is in the store?
Each customer de nes a di erent business, has di erent expectations and values, and buys something di erent."

Therefore Drucker continues, "We need to look outside from the point of view of the customer and market. Any
serious attempt to state, "What is our business?" must start with the customer’s realities, his situation, his behavior,
his expectations and values. To satisfy the customer is the Mission and Purpose of every business."

Other key questions that also need to be answered include;"Where is the customer?" and "What does the
customer buy?" It should be noted that we added "to retain and grow customers" to Drucker’s de nition since it is
important to recognize that it is estimated to cost ve time more to gain new customers than to retain existing
customers.

Question 2:

What Will Our Business Be?

In your meeting, Drucker now turns to the second important question you have to ask, "What will our business be?"
Drucker points out that this "aims at adaptation to anticipated changes. It aims at modifying, and developing the
on-going business." Drucker goes on, "There are four major factors that will determine what you business will be.
These are:

Market Potential and Market Trend

Changes in Market Structure
Innovation
The Consumer."

Drucker expands on these four factors with some additional insight and other questions for you to answer.

Market Potential and Market Trends

"How large can we expect our market for our business to be in ve or ten years – assuming no basic
changes in market structure or technology?
What will be the factors that will determine this development?"
Drucker asks you to answer the above questions. How would you respond?
Changes in Market Structure
"What changes in market structure are to be expected as of the result of economic developments,
changes in fashion or taste, or moves by competition?"
Drucker asks you to answer the above question. How would you respond?
Innovation
"What innovations will change the customer’s wants, create new ones, extinguish old ones, create new
ways of satisfying his wants, change his concepts of value or make it possible to give him greater value
satisfaction?"
Drucker asks you, "What innovations are taking place in your industry?" How would you answer him?
We The Consumer
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"What wants does the consumer have that are not being adequately satis ed by the products or services
o ered to him today?"
Drucker asks you, "What consumer wants are not being satis ed in your industry?" How would you
answer him?

Question 3:

What Should Our Business Be?

Drucker continues by asking the question, "What should our business be?", which involves developing a Vision for
the future. One does this by answering the following questions:

What changes in the environment can be observed that have an impact on characteristics, Mission, and
Purpose of the business?
What opportunities are opening up or can be created to ful ll the Purpose and Mission of the business by
making it into a di erent business?
How to build these anticipations into the Theory of Business, into objectives, strategies, and work
assignments?
The market, its potential, and its trends are the starting point. Changes in demographics (population shifts) are
the only events regarding the future for which true prediction is possible. Management needs to anticipate
changes in market structure, fashion or taste and moves from competition. Also, which of the consumer’s
wants are not adequately satis ed by the products or services o ered him today?"

Drucker adds, "That the ability to ask these questions (consumer’s wants) makes the di erence between a growth
company and one that depends for its development on the rising tide of the economy or industry. Whoever is
content to rise with the tide will also fall with it."

Conclusion
We hope that your morning meeting with Peter Drucker proved to be informative and useful. If you were taking
notes during the meeting, these are the key questions you and you management team should now begin to
develop information on in order to answer:

What is our business? (Mission)

What will our business be? (The changing environment that we are certain about)
What should our business be? (Vision)

This article is an extract of a longer article. The full article is available directly from the author
at docswaim@gmail.com. Dr. Swaim also goes into more detail on the concepts discussed in this article in chapters
2 and 3 of his book The Strategic Drucker.

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