Drucker discovered that management was considered almost an accidental activity

פורסם: 4.2.18      צילום: יח"צ

 

Drucker was both the Father of Modern Management and a high-priced consultant to major corporations billing as much as $10,000 an engagement for a few hours work. He made millions for them and was worth every penny. He used unique strategies to build his own career himself that was quite different from other consultants.

Drucker had four basic strategies and used all four. These are not mutually exclusive, and you can use can use more than one at the same time.

 

Dominance of a New Market, New Industries or Unserved Markets

The basic idea here is very simple. You enter and dominate a market or industry before anybody else does. While an unserved market is not new, serving it properly may be.

While during work for GM and writing Concept of the Corporation, Drucker discovered that management was considered almost an accidental activity. You could be in finance, accounting, personnel, production, sales, etc. but there was no department of management. When Drucker went to a bookstore to buy books on management which could help him with this early study, the shelves, unlike today, bore only a couple volumes. Drucker set out to fill that unfilled need. After several years of study, practice, and writing, he dominated the market for books about management. He reasoned that to dominate the market, his books had to supply something that was missing. His books essentially established the field of modern management. He developed a market which was not being served effectively

Creating a New Market by Supplying Something that is Missing.

Drucker thought that there were two basic ways to supply the missing ingredient.

• Imitate an established success, but to do so in a creative way which fills in the missing ingredient. He called this “creative imitation.”

• Find a product that had potential but was currently unsuccessful. He gave this the rather imaginative term of “entrepreneurial judo.”

Drucker consulting was like no other. He asked questions of his clients and forced them to provide the answers. Almost all consultants have the clients ask them questions and they assume it’s their business to provide the answers. Drucker assumed that the client was in a much better position to provide any right answer than he was. After all, his client was the expert in his own business. He was not as he asked two questions of, “The Manager of the Century”, Jack Welch, shortly after Welch became CEO of GE. “Are their businesses GE would not be in if you could do something and if so what are you going to do about it?”

Drucker told his students that rather than bring his knowledge and experience to consulting assignments, he brought his ignorance. He charged as much as $10,000 a day for this “ignorance”

How IBM Used Creative Imitation to Steal Apple’s Market

Steve Jobs of Apple, recognized the need for the computer and used the first strategy successfully. But IBM empire struck back. It developed a computer operating system and a computer which became the standard in the industry. IBM’s computer was not a technological breakthrough. What IBM did was to create a reliable machine that worked well, and capitalized on the IBM name, and distribution system, and most importantly, it allowed anyone to write software for its system, something Apple didn’t allow for its computers. With this strategy, IBM took over leadership of the market within two years. So, supplying the missing ingredient works, but so does creative imitation.

Finding and Occupying a Specialized Niche

The third strategy Drucker called occupying an ecological niche. According to Drucker occupying an ecological niche can make a marketer immune from competition altogether because the whole point is to be inconspicuous or to be in a market of what appears to be limited potential, so that no one else is likely to compete until it’s too late.

Drucker saw three distinct ways for implementing this approach. First, he suggested gaining a toll-gate position. In other words, you control an essential piece of something else needed by competitors such that would-be competitors cannot do business without your product or service. Sierra Engineering Company got itself into this position by being the only company that could manufacture a unique valve for oxygen breathing masks for aviators. If you wanted to sell oxygen breathing masks, you needed that valve.

The other two ways to occupy a specialized ecological niche was to either have a specialty skill, or to work in a specialty market. Life is so specialized today, that it is not difficult to acquire a specialty in which few can compete in a specific market. Once a chiropractor was a chiropractor, just as a Doctor of Medicine was a doctor of medicine. This is no longer an accurate description of either of these professions. For example, if you want a board certified upper cervical chiropractor, there are fewer than 100.

Changing the Financial Characteristics of the Situation

These strategies were of four types, all having the ultimate objective of creating a customer.  These are:

• Creating satisfaction
• Pricing in Accordance with the Customer’s Needs
• Adapting to the customer’s social and economic reality
• Delivering what represents true value to the customer

 

Creating Customer Satisfaction

The ice cream cone might fall into this category, although stories abound as to who came up with the idea first, the first patent was issued in 1903 to an Italian immigrant by the name of Italo Marciony, He had come up with the idea as early as 1896 to solve the problem of his customer’s breaking or walking off accidently with the glassware that he had used. He increased satisfaction by enabling them to eat what they had previously used. The number of ways to increase satisfaction are infinite. A manufacturer of exercise equipment added additional exercises available online to his buyers. A restaurant added a glass of wine to a meal. The U.S. Post Office Department made it easier to ship packages by providing free boxes for priority shipping and convenience to the shipper by charging a flat rate price according to box size instead of by weight. This they dramatized by the slogan, “If it fits it ships” and dramatically increased sales.

Changing How Something is Priced

A price change works. Drucker said that pricing should be done in accordance with the needs of the customer and what the customer buys, not what the supplier sells. Who would have thought that cameras would essentially be given to the customer along with the film? The customer really wants the photos. And so, customers today can buy a throwaway camera, film, and developed photos at an economical price.

With the advent of digital cameras and along with cameras built into our cell phones, there is no need for separate photo storage. Of course, pricing is to encourage glossies, CDs, or imprinting your photos on cards, coffee mugs, or other items is available. The pricing has changed from what the seller provides, camera, film, developing, etc. to what the buyer really wants. That’s the key to this strategy.

Adapting to the Customer’s Social and Economic Reality

Some marketers speak of the “irrational customer.” Drucker said that there was no such thing. He stated that the marketer should assume that the customer is always rational, ever though this reality may be far different from the marketer’s. Mary Kay Ash, the famed CEO of Mary Kay Ash Cosmetics once told the story about saving the money to buy her first new car on her birthday and buying a different company’s car because while waiting for a salesman for the car she wanted, a salesman in another dealership was more courteous and helpful. Some potential customers buy the most expensive product? In their reality it is always the best. It is the customer’s reality that counts.

Delivering True Value

True value, like quality is up to the customer, not the marketer. This is critical because customers, or organizational buyers, don’t purchase a product or service. They purchase satisfaction of a want or need. This means is their value.

Some companies spend millions providing additions that they think represents more value and is appreciated by the customer. Unfortunately, the customer may not think that these represent value. To a teenage girl, value might be defined primarily by fashion. Even comfort might come in a poor second. To the same teenage girl’s mother, value may be represented by durability. To her father, it might be price.  That’s why it’s so important to do the market research.

* Adapted from the book Peter Drucker’s Way to the Top by William A. Cohen (LID, 2018), and syndicated.

 

***הכותב ד"ר ביל כהן הנו מומחה בתורת המנהיגות. ד"ר כהן הינו מייג’ור גנרל בדימוס בחיל האויר האמריקאי, בעל תואר דוקטור בניהול מאוניברסיטת קלרמונט. כתב למעלה מ- 50 ספרים שתורגמו ל- 22 שפות בנושאי ניהול ומנהיגות. ביל כהן שימש כיועץ בעמדות בכירות וכמרצה באוניברסיטאות הטובות בארה”ב בינהן ביה”ס לניהול באוניברסיטת קלרמונט וב-UCLA. בנוסף, הוא מעביר הרצאות וסמינרים בנושא מנהיגות בכל זרועות הצבא האמריקאי ובאקדמיה הצבאית וזכה בפרסים על הרצאותיו בעולם. מעבר להיותו גנרל בצבא ארה”ב, ד”ר כהן הנו בעל דרגת רב סרן בחיל האויר הישראלי והשתתף בקרבות אוויר במלחמת יום כיפור. שימש בתפקידי ניהול בכירים במספר חברות וכיהן כנשיא של שתי אוניברסיטאות פרטיות. ביל כהן היה חבר דירקטוריון במספר מועצות מנהלים ומועצות סחר עירונית, ממשלתיות ושל תאגידים שונים.ביל כהן היה תלמידו הישיר לדוקטוראט של פיטר דרוקר אבי תורת הניהול המודרנית שאמר עליו בין היתר כי ” ביל כהן היה סטודנט אשר אני והקולגות שלי למדנו ממנו לפחות כפי שיכולנו ללמד אותו”.

 

 

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