Continuing with Drucker’s Objectives

Today, we’ll talk about Drucker’s remaining four objectives for a business: profitability, manager performance and development, worker performance and attitude, and public responsibility. If you missed the first four, check out Friday’s post.

Profitability In the past, Drucker has kind of dismissed the maximization of profit as an important objective of business; but that doesn’t mean that he believes profit is a worthless benchmark. Indeed profit is “the ultimate test of business performance.”* Without profit, a business cannot continue to exist perpetually. In Drucker’s eyes, a profit objective serves to determine the minimum amount of profit you need to remain operational and serve as a beneficial go or no-go benchmark in decision making.

Manager Performance and Development The manager must perform in ways that benefit the enterprise’s overall objectives. This involves creating key goals and maintaining operations that work toward the greater good, rather than becoming trapped in the minutia of policies and procedures, or becoming a dictator for the workers below you.

Worker Performance and Attitude Employees are your most important assets as a business. You must create objectives that develop effective employees, allow employees enough freedom and responsibility to be able to act in the best interest of the customer and business, and ultimately encourage them to accomplish their jobs while contributing positively to overall business objectives.

Public Responsibility The field of public responsibility has grown significantly over the past couple decades. In my opinion, in order to be publicly (socially) responsible, you must focus on the three areas of the triple bottom line: people, planet, and profit. Focusing on people involves maintaining positive relationships with employees and the community, planet considers the environment, and profit involves creating a sustainable financial future for the company. We’ll talk more about the triple bottom line tomorrow.

*Peter Drucker, The Practice of Management, 1986

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