Decision-making the Peter Drucker way

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Decision-making the Peter Drucker way

Peter Drucker is probably one of the greatest thinkers in management sciences over the last century.  I don’t know if he ever explicitly wrote or spoke about complexity, but the man obviously “got it”.  Consider what he wrote about “fact-based” decision making.

“Most books on decision-making tell the reader: First find the facts. But executives who make effective decisions know that one does not start with facts. One starts with opinions…The understanding that underlies the right decision grows out of the clash and conflict of divergent opinions and out of serious consideration of competing alternatives. To get the facts first is impossible. There are no facts unless one has a criterion of relevance.” Peter Drucker, Management: Tasks, Responsibilities, Practices (1973)

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.”

(From Stephen Wunker’s Why Peter Drucker Distrusted Facts, HBR Blog Network)

This approach is very different from that of most leaders (and most MBA approved best practices).  So many leaders nowadays surround themselves with people who think just like they do.  Dissenting voices are silenced.  Failure is not an option, fail-safe solutions to problems are like the holy grail of modern busines.  Peter Drucker’s words are like a breath of fresh air, with an intuitively understanding of how to make effective decisions in complex business environments.

By |November 11th, 2011|Categories: Uncategorized|0 Comments

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