What’s it about?
The Five Most Important Questions You Will Ever Ask About Your Organization (2008) presents readers with five simple yet highly effective questions that any manager, owner or stakeholder should ask in order to increase their organization’s chances of success. While these questions are focused on non-profit organizations, the lessons are applicable to any organization seeking to make a difference.
About the author:
Peter F. Drucker (1909-2005) was a pioneer of management theory. He worked as a writer, teacher and consultant specializing in strategy for business and social sector organizations. He has authored over 30 books, including Concept of the Corporation (1946) and Post-Capitalist Society (1993).
© Peter F. Drucker: The Five Most Important Questions You Will Ever Ask About Your Organization copyright 2008, John Wiley & Sons Inc. Used by permission of John Wiley & Sons Inc. and shall not be made available to any unauthorized third parties.
A well-defined mission helps you stay focused on your goals:
If you are the leader or manager of any organization, there are five questions you should ask yourself if you want your organization to be the best it can be.
“What is our mission?” is the first inquiry. It is the most important question since it identifies the objectives and goals you and your business hope to achieve. The answer is no less than the core purpose for your initial move, and as such, it will be the guiding force and the common bond that holds your organization together.
Given the importance of your mission statement, you should ensure that it appropriately expresses the organization’s commitment, capacity, and hope. However, the phrase should be factual as well as concise enough to fit on a t-shirt.
During a consulting assignment at a hospital, Drucker was entrusted with assisting officials in developing a new mission statement for the emergency room (ER). Their initial attempt was titled “We aim to provide health care.” However, it became clear that the ER was more concerned with illness than with wellness.
They also wanted to acknowledge the reality that in eight out of ten situations, the ER staff’s job was to convince patients that their issues might be alleviated by getting a decent night’s sleep. With these issues in mind, the mission statement was changed to “To provide certainty to the bereaved.”
Almost immediately, the hospital discovered that this mission assisted ER staff in re-evaluating their priorities, and patients began to be seen much more quickly.
A good mission statement can also assist your firm in adapting to a changing world while maintaining focus on its fundamental aims.
There will come a time in every organization when your principles must be fixed. To do so, distinguish the aspects that are negotiable from those that are not.
Take, for example, a modern church. If a church is to survive, it must acknowledge that people and their worship change throughout time. However, for the most part, a religion’s mission or worldview is unchangeable.
Similarly, even when new ones supersede old theories, the aim of the worldwide scientific community is unlikely to change much. Whatever happens, the primary mission remains the same: to enhance human knowledge.
Last but not least, a clear mission can assist you in determining whether an opportunity is suited for you.
The Girl Scouts of the United States of America’s purpose is “to assist a girl in attaining her full potential.” When a lucrative deal to canvas for a nonprofit organization was offered, management declined because the chance would not help the girls attain their full potential.
Identifying your major and secondary consumers will assist you in navigating the ever-changing business landscape:
Knowing your average customer is critical to the success of any organization. “If we’re not customer-driven, our cars won’t be either,” a Ford Motors official famously said.
As a result, the second critical issue for any successful firm is, “Who is our customer?”
When answering this question, you should be careful to distinguish between your primary and secondary consumers so that you may focus on the immediate while not neglecting the secondary.
A primary customer is someone whose life has been significantly impacted by your product or service.
The author once worked as a consultant for a mid-sized nonprofit organization whose purpose was to “improve people’s economic and social independence.” Their primary customer was identified as someone who faced “many impediments to employment.” This was a good definition because it could apply to a variety of people in various situations while remaining quite obvious.
A supportive customer is someone you wish to please but who isn’t the main focus of your purpose.
In the case of a nonprofit organization, their supporting customers may include local companies as well as family members and people who care about their principal consumers. All of these consumers have the potential to assist the organization in achieving its objective significantly.
Another reason to know your consumers is to understand how their changes affect your firm.
Knowing your consumer allows you to recognize when you’re reaching out to a different group of people. This is what occurred to a preacher known to the author: The pastor established a program at his church to assist newlyweds. Imagine his astonishment when the only people who turned there were unmarried cohabiting couples who were undecided about marriage. Knowing your target demographic will help you realize when others are unexpectedly drawn to your goods.
Remember that the world is constantly changing – if a completely other audience is taking over, you’ll need to realize when it’s time to develop alongside your client base while remaining committed to the goal that’s helped you flourish.
A successful company recognizes what its customers value:
More than any other, the following question is frequently overlooked, even though it is critical for any organization: “What does our consumer value?”
You may escape the trap of assuming what your customer wants and instead receive straight feedback by asking this question. When you have a thorough understanding of your core consumers’ beliefs, you will be able to maximize your ability to meet their demands.
For example, when a homeless shelter uncovered its significant clients’ values, it resulted in substantial modifications in their importance on food and bedding. The group performed a series of face-to-face client interviews, which found that, while meals and clean bedding were appreciated, they were placed near the bottom of the list when compared to addressing the customers’ fundamental need: not to be homeless.
As a result, the staff devotes more time and resources to assist its customers in achieving their goals. This included expanding the length of time people could stay at the shelter. They were making the duration longer contributed to the creation of a safer, more home-like environment.
This question also influenced how Sinai-Grace Hospital operated. Patricia Maryland, the hospital’s new president, discovered that it was known in the community as the “filthy hospital” and that patients were dissatisfied with how long they had to wait for service.
Maryland knew what needed to be altered due to the consumer feedback, and she oversaw a massive overhaul of how the hospital was administered. This includes splitting the ER into distinct locations for urgent care and patients with chest discomfort, resulting in a 75% reduction in wait time.
Maryland also oversaw the hospital’s total renovation to dispel the hospital’s “dirty” public impression. The hospital was finally able to become a profitable institution as a result of these customer-driven adjustments.
When asking this question on customer value, don’t forget to include the thoughts of your loyal customers.
For a school administrator, this involves focusing on the core customer – the kid – while not disregarding the numerous secondary customers, who include teachers, the school board, community partners, and parents.
Each requires careful monitoring to ensure that the teachers do not go on strike or that the school board does not remove the principal. Only by meeting the supporting customers’ needs can the administrator ensure that the school runs smoothly and that the pupils receive a high-quality education.
Now that the purpose has been established and the customers have been identified, it is time to move on to the following question.
Recognizing the types of outcomes on which your company should be measured is critical to success:
A competent leader’s responsibility is to understand what has to be repaired to achieve the organization’s purpose. This entails keeping a close check on performance and how it compares to criteria. To accomplish this, you must pose the fourth question: “What are our results?”
When focused on achievements, keep in mind that long-term success is frequently the result of short-term accomplishments. When considering the outcomes you want to achieve, keep both the long and short term in mind.
The objective of a minor, family-run mental health facility is “to allow the healing of those with serious and persistent mental illness.” They measured their results against the ultimate aim of recovery and against all of the minor steps that a patient had to take to get there.
This included monitoring how many group sessions the patients attended, a decrease in hospitalization, and whether there was an improvement in how well participants understood their diseases.
This helped the institution learn which programs were effective and needed improvement, allowing more patients to return to stable family life and steady employment.
When reviewing outcomes, you should consider both the qualitative and quantitative aspects.
Qualitative outcomes are non-numerical, personal information that might assist you in understanding your consumers’ experiences.
One excellent qualitative result for the education director of a major museum was being told by a man that the museum had altered his life by opening up his teenage mind to a new world of possibilities. This sparked a new museum campaign to draw in more at-risk teens.
Quantitative outcomes, on the other hand, are concerned with statistics and numerical data.
Profit and earnings are the most critical indicators for many firms. However, for a nonprofit business, key figures may include the percentage of welfare clients who acquire jobs after finishing the company’s job training program or whether child abuse rates have decreased since the implementation of 24-hour crisis care. These metrics provide a clear picture of your organization’s effectiveness and the impact it is making.
Appraising your performance will also aid you in answering the final question.
A robust action plan keeps you focused on your goals and lays out a strategy for achieving them.
The final question that every business must address is, “What is our plan?”
Any excellent plan should consider everything necessary, including your purpose, vision, goals, objectives, action stages, budget, and results. Planning should also account for the current business climate’s volatility, as well as the exact direction you want to take your corporation and how you want to get there.
An excellent strategy will outline your overarching goals in a way that translates into tangible actions, which will lead to specific objectives.
So, what sorts of objectives should you create for yourself? A good set of goals should match your ideal future and outline the long-term path you must take to get there. On the other hand, an effective strategy should have no more than five targets; otherwise, your attention and efforts would be split too thin.
Let’s have a peek at a museum: A well-thought-out set of objectives would be consistent with their mission of bringing art and people together. The museum’s four goals could be to seek and acquire extraordinary works of art, preserve collections and encourage partnerships, develop the museum’s audience and strengthen ties with new and old members, and achieve long-term financial security.
Once you have goals, they must be transformed into objectives – preferably ones with measurable action steps that allow you to record your progress.
For example, the museum’s goal of increasing its audience can be transformed into growing memberships by 10%. You can now take steps toward this goal, such as selling cheap membership gift packs during the forthcoming holidays.
Plans, objectives, and action stages should not be set in stone. You should conduct monthly performance reviews to assess the success of your project, and if things aren’t going well, you should change your plan accordingly. Perhaps circumstances have changed, or new knowledge about the marketplace or your target clients has come to light. Or maybe you’ve discovered a better method, such as focusing on sales through your website.
Assume the museum opens a new exhibition, and it rapidly becomes clear that it is attracting a large number of first-time visitors. This is an unexpected opportunity to convert these new visitors into paying subscribers. Even if it wasn’t part of the original plan, your company should be adaptable enough to redirect resources to this new strategy.
Now that you’ve learned the five questions, it’s time to put them to use for you and your company.