Praise for Drucker on Leadership “ What Cohen learned as Peter Drucker’s student, and their personal relationship afterwards, changed Bill’s life. Reading Drucker on Leadership will change the way you look at and apply leadership forever.” —Bruce Rosenstein, author of Living in More Than One World: How Peter Drucker’s Wisdom Can Inspire and Transform Your Life “ Peter F. Drucker helped me found the Peter F. Drucker Academy in China. It is a pleasure to see his concepts and what he instructed me brought together in one place and explained so that they could be applied by any executive. Drucker on Leadership is a valuable and useful book.” — Minglo Shao, chairman and CEO of the Bright China Group and founder of the Peter F. Drucker Academy DRUCKER ON LEADERSHIP New Lessons ■ from the Father of Modern Management William A. Cohen Foreword by Frances Hesselbein Copyright © 2010 by William A. Cohen. All rights reserved. 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Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass directly call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986, or fax 317-572-4002. Jossey-Bass also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. Library of Congress Cataloging-in-Publication Data Cohen, William A. Drucker on leadership : new lessons from the father of modern management/William A. Cohen, PhD. p. cm. Includes index. ISBN 978-0-470-40500-0 (hardback) 1. Leadership. 2. Organization. 3. Management. I. Title. HD57.7.C6426 2009 658.4'092—dc22 2009029118 Printed in the United States of America first edition HB Printing 10 9 8 7 6 5 4 3 2 1 For Doris Drucker The First Lady of the Peter F. Drucker and Masatoshi Ito Graduate School of Management but more than that—the author of a best-selling book, the founder and CEO of a medical device company, and a woman who not only stood by her man for almost seventy years but continues to travel the world promoting his principles. ■ CONTENTS Foreword ix by Frances Hesselbein Introduction: Peter Drucker and Leadership 1 Part One ■ The Leader’s Role in Shaping the Organization’s Future 9 1 The Fundamental Decision: Determining the Business of the Organization 11 2 The Process: Creating a Strategic Plan 21 3 Look, Listen, and Analyze: The Information the Leader Needs 33 4 Methodology: Developing Drucker-Based Strategies 45 5 Taking Action: What It Takes to Implement Your Plan 55 Part Two ■ Ethics and Personal Integrity 63 6 Drucker’s Views on Business Ethics 65 7 Effective Leadership and Personal Integrity 75 8 The Seven Deadly Sins of Leadership 85 9 Effective Leadership and Corporate Social Responsibility 97 10 The Responsibility of a Corporation: First, Do No Harm 107 vii viii Contents Part Three ■ The Military: Drucker’s Model Organization 117 11 Leadership Lessons from Xenophon 121 12 Training and Developing Leaders 133 13 Promotion and Staffi ng 145 14 The Heart of Leadership 157 15 Leadership for Upper Management 167 Part Four ■ Motivation and Leadership 179 16 Leadership Style as a Motivator 181 17 Motivating to Peak Performance 191 18 Charisma as a Motivator 201 19 The Volunteer Paradigm 211 Part Five ■ The Marketing Model of Leadership 223 20 Applying Marketing to Leadership 227 21 Applying Segmentation to Leadership 235 22 Applying Positioning to the Organization and the Leader 245 23 The Role of Infl uence and Persuasion on Strategy and Tactics 255 Epilogue Drucker’s Legacy 265 Notes 267 About the Author 283 Index 285 ■ FOREWORD by Frances Hesselbein or those who sit at the feet of Peter Drucker, and always will, and for those just discovering our greatest leadership philosopher, F Drucker on Leadership is a rare and timely gift, as we approach the great celebration of Peter Drucker’ s hundredth birthday. And who better to bring us this exciting new book, these new observations, than Drucker ’ s fi rst Executive Ph.D. graduate. No one else can claim this unique status — a thirty - year relationship with Peter, a unique understanding of almost a third of Peter Drucker’ s journey that he shared. The Peter F. Drucker Foundation for Nonprofi t Management was established in 1990. Six weeks after I had left the CEO position at the Girl Scouts of the USA, I found myself the CEO of the new Drucker Foundation. We had ten inspiring years with Peter Drucker as our honorary chairman. He attended our board meetings, three times a year for ten years, spoke at every conference we held, and wrote forewords and chapters for many of our twenty - six books. All of us —board members, staff members, and all —had numerous opportunities to listen to, dialogue with, work on the written and spoken word with Peter Drucker. With gratitude we absorbed and appreciated his messages, his voice, his timeless philosophy. When Peter became frail, unable to be with us in person, we decided that the most loving and respectful thing we could do was to return his name to the family; we became the Leader to Leader Institute, taking the name of our journal, Leader to Leader. But it is the same organization, still committed to moving Peter Druck- er’ s works, his philosophy, his message across all three sectors and around the world. We are as committed today as we were in March 1990 when the Drucker Foundation was born. ix x Foreword I share this preamble to the Introduction with you because my reflections on Bill Cohen ’ s Drucker on Leadership have a deep and close appreciation and experience with the hero of the book, and I can say with documented certainty that Cohen ’ s Drucker on Leadership is pure Drucker. Every chapter brings a fresh, new approach to understanding the world, the works, the leader- ship philosophy of Peter Drucker. I read the manuscript with a critical eye, for I felt I owed Bill Cohen an alert if a Drucker con- cept did not come through clearly or was not consistent with the Peter Drucker that the Girl Scouts of the USA and the Drucker Foundation (Leader to Leader Institute) welcomed, understood, practiced, made their own. Drucker on Leadership passes this most rigorous test — these les- sons are the lessons all those who sat at the feet of Peter Drucker learned, practiced, and lived: the Drucker philosophy. To this day I quote Peter to audiences in all three sectors: for example, “ The U.S. Army does the best job of developing leaders, because it develops leaders from within. ” Bill Cohen ’ s analysis in Part Three captures Peter ’ s respect for the military model of leadership development. Strategic planning is strengthened by “The best way to predict the future is to create it. ” We see T - shirts with this wisdom. Peter was the model for the principled, ethical leader. Almost one hun- dred years of his “ gift of example ” in leadership and ethics sustains us in our times when far too many have lost their way. And when it comes to marketing, with “ A business has just two functions — marketing and innovation, ” Peter lights a fi re. In Part One , Bill Cohen is faithful to Peter ’ s focus on “ mission,” defi ned as “ why we do what we do, our reason for being, ” which is all about the desired future. Determining what business we are in is a primary responsibility of the leader and the power of inclusion comes through clearly, along with determining who is our customer, an equally powerful message. Creating an organization ’ s future may seem a formidable task in our uncertain times, when few dare to describe the future —even Foreword xi ten years from now — yet in this book are guidelines for that journey into an uncertain future.