Read book and answer question.

AN INSPIRING TOOL FOR ORGANIZATIONS AND THE PEOPLE WHO LEAD THEM

The Five MOST IMPORTANT

Questions You Will Ever Ask

About Your Organization

Peter F. Drucker with Jim Collins,

Philip Kotler, James Kouzes, Judith Rodin, V. Kasturi Rangan, and Frances Hesselbein

LEADER TO LEADER INSTITUTE

"Nobody, not even Socrates, has ever asked better questions

than Peter Drucker. All the personality, all the wisdom is

here to make your work dramatically more effective. There's

nothing better. It's like having Peter at your side."

—Bob Buford, author, Halftime and Finishing Well,

and founding chairman, Peter F. Drucker Foundation

for Nonprofit Management

"Peter Drucker's penetrating and profound insights are more

relevant and needed today than when he originally produced

them. This helpful revision of his classic Self-Assessment Tool

offers managers and leaders in every sector—nonprofit, busi

ness, and government—a useful guide to figuring out what's

needed, why it matters, and how to make it work. At a time

when the need for more effective management and more

ethical leadership are the moral equivalent of global warm

ing, Drucker's common sense and courage should be mod

eled by everyone who cares about doing things right and

doing the right thing."

—Ira A. Jackson, dean, Peter F. Drucker and Masatoshi

Ito Graduate School of Management, and board

member, The Drucker Institute

"Peter Drucker's Five MostImportant Questions continue to

be the indispensable questions that an organization must ask

itself, regardless of size or sector, if it is determined to be an

organization of the future. When these questions are asked,

the journey begins. And as Peter Drucker reminds us in this

book, the answers are in the questions."

—Kathy Cloninger, CEO, Girl Scouts of the USA

"The Leader to Leader Institute has done a great service in

bringing us this monograph. Good leaders come up with an

swers, but the great leaders ask the right questions—and this

wonderful work helps all leaders do exactly that."

. —Jim Collins, author, Good to Great and the Social

Sectors and Built to Last

"An amazing resource that can help even the most success

ful organizations become more successful!"

—Marshall Goldsmith, author, What Got You Here

Won'tGet You There: How Successful People Become

Even More Successful, winner of Soundview Execu

tive Summaries' Harold Longman Best Business

Book of 2007 Award

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mmsmm mm WKBM IMPORTANT

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iiiillillli^ Jim Collins, Philip Kotler, James Kouzes,

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iSlllllfii^^ P:-) • • • ^:p-

Copyright © 2008 by Leader to Leader Institute. All rights reserved. www.leadertoleader.org

Published by Jossey-Bass A Wiley Imprint 989 Market Street, San Francisco, CA 94103-1741—www.josseybass.com

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Library of Congress Cataloging-in-Publication Data

Drucker, Peter F. (Peter Ferdinand), 1909-2005. The five most important questions you will ever ask about your

organization/Peter F. Drucker; [with] Jim Collins ... [et alj. p. cm. —(Leader to Leader Institute Series)

"Third edition"—Foreword.

Includes index.

ISBN: 978-0-470-22756-5 (pbk.) 1. Nonprofit organizations—Management—Evaluation. 2. Organizational

effectiveness—Evaluation. 3. Total quality management—Evaluation. I. Collins, James C. (James Charles). II. Title. HD62.6.D777 2008 658.4'013—dc22 2008009374

Printed in the United States of America FIRST EDITION

PB Printing 10 9 8 7 6 5

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LEADERTO LEADER INSTITUTE

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In Extremis Leadership, ThomasA. Kolditz

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Leadership Lessons from West Point, MajorDoug Crandall, Editor

Leading Organizational Learning: Harnessing the Power of Knowledge, Marshall Goldsmith, HowardMorgan, AlexanderJ. Ogg

Be*Know*Do: Leadership the Army Way, FrancesHesselbein, General Eric K. Shinseki, Editors

Hesselbein on Leadership, Frances Hesselbein

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Meeting the Collaboration Challenge Workbook, The Drucker Foundation

On Leading Change: A Leader to Leader Guide, Frances Hessel bein RobJohnston,, Editors

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Leader to Leader: Enduring Insights on Leadership from the Drucker Foundation, Frances Hesselbein, Paul Cohen, Editors

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The DruckerFoundation Self-Assessment Tool Process Guide, GaryJ. Stern

Excellence in Nonprofit Leadership (video), Featuring Peter F. Drucker, MaxDe Pree, Frances Hesselbein, Michele Hunt; Moder ated by Richard F Schubert

Excellence in Nonprofit Leadership Workbook and Facilitator's Guide, Peter F. Drucker Foundationfor Nonprofit Management Lessons in Leadership (video), Peter F. Drucker

Lessons in Leadership Workbook and Facilitator's Guide, PeterF. Drucker

The Leaderof the Future, Frances Hesselbein, Marshall Goldsmith, Richard Beckhard, Editors

Find additional resources, helpful tools, and

information on The Five Most Important Questions at

wwWofivequestionsbook.com

CONTENTS

Foreword xi

About Peter F. Drucker xvii

Why Self-Assessment? 1 Peter R Drucker

Question I: What Is Our Mission? 11 Peter R Drucker with Jim Collins

Question 2: Who Is Our Customer? 23 Peter R Drucker with Philip Kotler

Question 3: What Does the Customer Value? 37 Peter R Drucker with Jim Kouzes

Question 4: What Are Our Results? 49 Peter R Drucker with Judith Rodin

Question 5: What Is Our Plan? 63 Peter R Drucker with V. Kasturi Rangan

IX

Contents

Transformational Leadership 77 Frances Hesselbein

The Self-Assessment Process 83

Suggested Questions to Explore 87

Definitions of Terms 99

About the Contributors 103

About the Leader to Leader Institute 107

Acknowledgments 109

Additional Resources 111

Index 115

FOREWORD

It is often said that the simple questions are the hardest to an

swer. But how could this be? Doesn't logic tell us that simple

questions should also be the easiest to answer? No. Simple ques tions can be profound, and answering them requires us to make stark and honest—and sometimes painful—self-assessments.

We do a great disservice to our organizations—whether busi ness, nonprofit, or public sector-—and to our customers and to ourselves if we do not ask these five simple yet profound es

sential questions first posed by Peter F. Drucker. As Peter Drucker said in the first edition of The Five

Most Important Questions You Will Ever Ask About Your Nonprofit Organization, "The most important aspect of the Self-Assessment Tool is the questions it poses. Answers are

important; you need answers because you need action. But the most important thing is to ask these questions."1

More than fifteen years ago, the Leader to Leader Institute

set off on a journey. Then known as the Peter F. Drucker Foundation for Nonprofit Management, the mission was to

XI

Foreword

help the social sector achieve excellence inperformance and build responsible citizenship. The immediate and compelling question we heard from our customers when we began our work was, "You say we should achieve excellence, but how do we know when we get there?" That began our journey, together with our customer-partners, to develop a strategic organizational self-assessment tool.

Much excellent work was done by exuberant volunteers, staff, facilitators, and organizations—collaborating, develop ing, testing, publishing, and distributing the first edition of The FiveMost Important Questions. Yet at its core was the management philosophy of Peter F. Drucker. If Peter Drucker

were with you and your organization today, we believe he would ask the same questions of you that he asked more than fifteen years ago:

1. What is our mission?

2. Who is our customer?

3. What does the customer value?

4. What are our results?

5. What is our plan?2

These five simple—yet complex and compelling—questions are as essential and relevant today as they were then. These questions used as a self-assessment tool are unique, and though first developed in this framework for social sector or

ganizations, they can be applied to almost any organization today. This book is designed to be used for organizational

XII

Foreword

strategic self-assessment, not for program assessment or for an individual performance review. It starts with the fundamental question What is our mission? Itaddresses the question ofthe organization's reason for being—its purpose—not the how. The mission inspires; it is what you want your organization to be remembered for. The questions then guide you through the process of assessing how well you are doing, ending with a measurable, results-focused strategic plan to further the mission and to achieve the organization's goals, guided by the vision.

The ultimate beneficiaries of this very simple process are

the people or customers touched byyour organization and by others like you who have made the courageous decision to look within yourselves andyour organization, identify strengths andchallenges, embrace change, foster innovation, accept and respond to customer feedback, look beyond the organization for trends and opportunities, encourage planned abandon ment, and demand measurable results. Some organizations ofthe past rested on good deeds alone. Organizations of the future are relevant and sustainable with measurable results.

This self-assessment model is flexible and adaptable.

Walk this tool into any boardroom or CEO's office. Use it in any sector—public, private, orsocial. It does not matter whether the organization is a Fortune 500 multinational or a small en trepreneurial start-up; a large national government agency or one thatserves yourlocal townor regional heartland; a billion- dollar nonprofit foundation or a $100,000 homeless shelter. What matters is commitment to the future, commitment to

the customer, commitment to the mission, and commitment

XIII

Foreword

to the process. Self-discovery is an introspective and coura geous journey that gives organizations and leaders the en ergy and courage to grow.

Fifteen years ago, The Five Most Important Questions was powerful, relevant—the indispensable tool for organizations determined to be viable, the organization of the future. Peter Drucker and the then Drucker Foundation launched a self- assessment tool exactly right for the moment, written within the context of the times—the early 1990s.

Today, in the new edition of the indispensable tool, once again we have considered the context of our times.

As we are approaching a new decade—different context, different backdrop—The Five Most Important Questions, once again, is essential, relevant, and responsive to the needs of leaders and organizations in our own times. And, once again, the father ofmodern management leads the way into the future.

We could not be more grateful for the generous contri butions offive ofthe most respected and admired thought leaders of our time:

• Jim Collins, who describes how an organization's mission reflects the fundamental tension between

continuity and change, and how organizations particularly good at adapting to change know what should not change

• Philip Kotler, who implores us to do a better job of understanding who our target customers are, and then

XIV

Foreword

to deeply please them instead of trying to casually please everyone

• Jim Kouzes, who suggests that everything exemplary leaders do is about creating value for their customers

• Judith Rodin, who asserts that no plan can be considered complete—or satisfactory—until it produces measurable outcomes and incorporates mechanisms

that allow midcourse corrections based on results

• V. Kasturi Rangan, who describes what makes a good plan andthe importance of monitoring plan execution and closing the feedback loop for the next planning cycle

You will be inspired and enlightened by their thoughtful contributions, and we know you will be as appreciative of their generous gifts of wisdom, experience, and intellectual energy as we are. The original The Five Most Important Ques tions emerged from the wisdom of Peter Drucker. We once again share Peter's wisdom with you, and enrich the tool with the thoughts of these five great leaders. We are deeply grateful to you, our readers and supporters, fellow travelers on the journey to organizational self-discovery.

Frances Hesselbein

Chairman and founding president

President and CEO

Leader to Leader Institute

New York City

xv

Foreword

NOTES

1. Peter F. Drucker, The Five Most Important Questions You Will Ever Ask About Your Nonprofit Organization (San Francisco: Jossey-Bass, 1993), p. 3.

2. Drucker, The Five Most Important Questions, p. viii.

XVI

ABOUT PETER F. DRUCKER

Peter F. Drucker (1909-2005)—widely considered to be the

world's foremost pioneer of management theory—was a writer, teacher, and consultant specializing in strategy and pol icy for businesses and social sector organizations. Drucker's career as a writer, consultant, and teacher spanned nearly seventy-five years. His groundbreaking work turned modem management theory into a serious discipline. He has influ enced or created nearly every facet of its application, in cluding decentralization, privatization, empowerment, and understanding of "the knowledge worker." He is the author of thirty-one books, which have been translated into more than twenty languages. Thirteen books deal with society, eco nomics, and politics; fifteen deal with management. Two of his books are novels, one is autobiographical, and he is coau

thor of a book on Japanese painting. He has made four series of educational films based on his management books. He has

been an editorial columnist for the Wall StreetJournal and a

XVII

About Peter F.Drucker

frequent contributorto the Harvard Business Review and other periodicals.

Drucker was born in 1909 in Vienna and was educated

there and in England. He took his doctorate in public and international law while working as a newspaper reporter in Frankfurt, Germany. He then worked as an economist for an

international bank in London. Drucker moved to London in

1933 to escape Hitler's Germany and took a job as a securi ties analyst for an insurance firm. Fouryears later, he married Doris Schmitz, and the couple departed for the United States in 1937.

Drucker landed a part-time teaching position at Sarah Lawrence College in New York in 1939. He joined the faculty of Bennington College in Vermont as professor of politics and philosophy in 1942, and the next year put his academic career on hold to spend two years studying the management structure of General Motors. This experience led to his book Concept ofthe Corporation, an immediate best-seller in the

United States and Japan, which validated the notion that

great companies could stand among humankind's noblest in

ventions. For more than twenty years, he was professor of management at the Graduate Business School of New York

University. He was awarded the Presidential Citation, the uni versity's highest honor.

Drucker came to California in 1971, where he was in strumental in the development of the country's first execu tive MBA program for working professionals at Claremont Graduate University (then known as Claremont Graduate

XVIII

About Peter F. Drucker

School). The university's management school was named the Peter F. Drucker Graduate School of Management in his

honor in 1987. He taught his last class at the school in the spring of 2002. His courses consistently attracted the largest number of students of any class offered by the university.

As a consultant, Drucker specialized in strategy and pol icyfor governments, businesses, and nonprofit organizations. His special focus was on the organization and work of top management. He worked with some of the world's largest businesses and with small and entrepreneurial companies. In

recent years, he worked extensively with nonprofit organiza tions, including universities, hospitals, and churches. He served as a consultant to a number of agencies of the U.S.

government and with the governments of Canada, Japan, Mexico, and other nations throughout the world.

Peter Drucker has been hailed in the United States and

abroad as the seminal thinker, writer, and lecturer on the

contemporary organization. Drucker's work has had a major influence on modern organizations and their management

over the past sixty years. Valued for keen insight and the ability to convey his ideas in popular language, Drucker has often set the agenda in management thinking. Central to his philosophy is the view that people are an organization's most valuable resource and that a manager's job is to pre

pare and free people to perform. In 1997, he was featured on the cover of Forbes magazine under the headline "Still the Youngest Mind/' and BusinessWeek has called him "the most enduring management thinker of our time."

XIX

About Peter F.Drucker

OnJune 21, 2002, Peter Drucker, author of The Effective Executive andManagement Challengesfor the 21st Century, received the Presidential Medal of Freedom from President George W. Bush.

Drucker received honorary doctorates from numerous

universities around the world, including the United States, Belgium, Czechoslovakia, Great Britain, Japan, Spain, and Switzerland. He was honorary chairman of the Leader to Leader Institute. He passed away on November 11, 2005, at age ninety-five.

xx

WHY SELF- ASSESSMENT?

Peter R Drucker

The ninety million volunteers who work for nonprofit institutions—America's largest employer—exemplify the Amer

ican commitment to responsible citizenship in the commu

nity. Indeed, nonprofit organizations are central to the quality of life in America and are its most distinguishing feature.1

Forty years ago management was a very bad word in nonprofit organizations. Management meant business, and the one thing a nonprofit was not was a business. Today, nonprofits understand that they need management all the more because they have no conventional bottom line. Now they need to leam how to use management so they can con centrate on their mission. Yet, there are few tools available

that address the distinct characteristics and central needs of

the many nonprofit organizations in America.2 Although I don't know a single for-profit business that is

as well managed as a few of the nonprofits, the great major

ity of the nonprofits can be graded a "C" at best. Not for lack

Why Self-Assessment?

of effort; most of them work very hard. But for lack offocus, and for lack of tool competence. I predict that this will change, however, and we at the Drucker Foundation [now Leader to Leader Institute] hope to make ourgreatest impact in these areas of focus and tool competence.3

For years, most nonprofits felt that good intentions were by themselves enough. But today, we know that because we don't have a bottom line, we have to manage better than for- profit business. We have to have discipline rooted in our mis sion. We have to manage our limited resources of people and money for maximum effectiveness. And we have to think

through very clearly what results are for our organization.4

THE FIVE MOST

IMPORTANT QUESTIONS The self-assessment process is a method for assessing what you are doing, why you are doing it, and what you must do to improve an organization's performance. It asks the five

essential questions: What is our mission? Who is our cus

tomer? What does the customer value? What are our results?

and What is ourplan? Self-assessment leads to action and lacks meaning without it. To meet growing needs and suc ceed in a turbulent and exacting environment, social sector organizations must focus on mission, demonstrate account

ability, and achieve results.5

The self-assessment tool forces an organization to focus on its mission. About eight out of ten nonprofits in the coun try are small organizations whose leaders find it very hard to

Why Self-Assessment?

say no when someone comes to them with a good cause. I advised some close friends of mine, working with a local

council of churches, that half the things they are doing they

shouldn't be doing—not because they're unimportant but

because they're not needed. I told them, "Other people can

do those activities and do them well. Maybe a few years ago

it was a good idea for you to help get this farmers' market started because those Vietnamese farmers in your area

needed a place to sell their produce; but it's going well now, and you don't have to run it anymore. It's time for organized abandonment."6

You cannot arrive at the right definition of results with

out significant input from your customers—and please do not get into a debate over that term. In business, a customer

is someone you must satisfy. If you don't, you have no re

sults. And pretty soon you have no business. In a nonprofit organization, whether you call the customer a student, pa

tient, member, participant, volunteer, donor, or anything

else, the focus must be on what these individuals and groups

value—on satisfying their needs, wants, and aspirations.7

The danger is in acting on whatyou believe satisfies the customer. You will inevitably make wrong assumptions.

Leadership should not even try to guess at the answers; it

should always go to customers in a systematic quest for

those answers. And so, in the self-assessment process, you

will have a three-way conversation with your board, staff,

and customers and include each of these perspectives in

your discussions and decisions.8

Why Self-Assessment?

PLANNING IS NOT AN EVENT

When you follow the self-assessment process through to its completion, you will have formulated a plan. Planning is fre quently misunderstood as making future decisions, but deci

sions exist only in the present. You must have overarching goals that add up to a vision for the future, but the immedi

ate question that faces the organization is not what to do to

morrow. The question is, What must we do today to achieve results? Planning is not an event. It is the continuous process of strengthening what works and abandoning what does not, of making risk-taking decisions with the greatest knowl edge of their potential effect, of setting objectives, apprais ing performance and results through systematic feedback,

and making ongoing adjustments as conditions change.9

ENCOURAGE CONSTRUCTIVE DISSENT

All the first-rate decision makers I've observed had a very simple rule: If you have quick consensus on an important matter, don't make the decision. Acclamation means nobody has done the homework. The organization's decisions are

important and risky, and they should be controversial. There

is a very old saying—it goes all the way to Aristotle and later

became an axiom of the early Christian Church: In essentials

unity, in action freedom, and in all things trust. Trust requires that dissent come out in the open.10

Nonprofit institutions need a healthy atmosphere for dis

sent if they wish to foster innovation and commitment. Non

profits must encourage honest and constructive disagreement

Why Self-Assessment?

precisely because everybody is committed to a good cause:

Your opinion versus mine can easily be taken as your good

faith versus mine. Without proper encouragement, people

have a tendency to avoid such difficult, but vital, discussions

or turn them into underground feuds.11

Another reason to encourage dissent is that any organi

zation needs its nonconformist. This is not the kind of per

son who says, "There is a right way and a wrong way—and

our way." Rather, he or she asks, "What is the right way for

thefuture?" and is ready to change. Finally, open discussion uncovers what the objections are. With genuine participa

tion, a decision doesn't need to be sold. Suggestions can be

incorporated, objections addressed, and the decision itself

becomes a commitment to action.12

CREATING TOMORROW'S

SOCIETY OF CITIZENS

Your commitment to self-assessment is a commitment to de

veloping yourself and your organization as a leader. You will

expand your vision by listening to your customers, by en

couraging constructive dissent, by looking at the sweeping

transformation taking place in society. You have vital judg

ments ahead: whether to change the mission, whether to

abandon programs that have outlived their usefulness and

concentrate resources elsewhere, how to match opportunities

with your competence and commitment, how you will build

community and change lives. Self-assessment is the first ac

tion requirement of leadership: the constant resharpening,

Why Self-Assessment?

constant refocusing, never being really satisfied. And the

time to do this is when you are successful. If you wait until things start to go down, then it's very difficult.13

We are creating tomorrow's society of citizens through

the social sector, through your nonprofit organization. And in that society, everybody is a leader, everybody is responsi ble, everybody acts. Therefore, mission and leadership are not just things to read about, to listen to; they are things to

do something about. Self-assessment can and should convert

good intentions and knowledge into effective action—not

next year but tomorrow morning.14

Notes

1. Peter F. Drucker, TheFiveMostImportantQuestions You Will EverAskAbout Your Nonprofit Organization (San Francisco: Jossey-Bass, 1993), SAT1: p. 2.

2. Drucker, The FiveMost Important Questions, p. 2. 3. Drucker, The FiveMost Important Questions, p. 2. 4. Drucker, The FiveMost Important Questions, p. 2. 5. Gary J. Stem, TheDrucker Foundation Self-Assessment Tool:

Process Guide (San Francisco: Jossey-Bass, 1999), SAT2PG: p. 4.

6. Drucker, The Five Most Important Questions, p. 3. 7. Stem, TheDrucker Foundation Self-Assessment Tool: Process

Guide, p. 4.

8. Stern, TheDrucker Foundation Self-Assessment Tool: Process Guide, p. 4.

9. Stem, TheDrucker Foundation Self-Assessment Tool: Process Guide, p. 4.

Why Self-Assessment?

10. Peter F. Dmcker, The Drucker Foundation Self-Assessment

Tool: Participant Workbook (San Francisco: Jossey-Bass, 1999), SAT2: p. 5.

11. Dmcker, The Drucker Foundation Self-Assessment Tool: Par

ticipant Workbook, p. 6. 12. Dmcker, TheDrucker Foundation Self-Assessment Tool: Par

ticipant Workbook, p. 6. 13. Dmcker, The Drucker Foundation Self-Assessment Tool: Par

ticipant Workbook, p. 6. 14. Dmcker, The Drucker Foundation Self-Assessment Tool: Par

ticipant Workbook, p. 6.

QUESTION I

♦

What Is Our

Mission?

♦ What is the current mission?

♦ What are our challenges?

♦ What are our opportunities?

♦ Does the mission need to be revisited?

ii

Dcial sector institution exists to make a distinctive differ-

^ice in the lives of individuals and in society. Making this dif-

JS&£Qe&is the mission—the organization's purpose and very reason for being. Each of more than one million nonprofit or

ganizations in the United States may have a very different

mission, but changing lives is always the starting point and

ending point. A mission cannot be impersonal; it has to have

deep meaning, be something you believe in—something you

know is right. A fundamental responsibility of leadership is to

make sure that everybody knows the mission, understands it,

lives it.

Many years ago, I sat down with the administrators of a

major hospital to think through the mission of the emer

gency room. As do most hospital administrators, they began

by saying, "Our mission is health care." And that's the wrong

definition. The hospital does not take care of health; the hos

pital takes care of illness. It took us a long time to come up

with the very simple and (most people thought) too-obvious

statement that the emergency room was there to give assur ance to the afflicted. To do that well, you had to know what

really went on. And, to the surprise of the physicians and

nurses, the function of a good emergency room in their com

munity was to tell eight out of ten people there was nothing

13

Question I

wrong that a good night's sleep wouldn't fix. "You've been

shaken up. Or the baby has the flu. All right, it's got convul

sions, but there is nothing seriously wrong with the child."

The doctors and nurses gave assurance.

We worked it out, but it sounded awfully obvious. Yet

translating the mission into action meant that everybody who

came in was seen by a qualified person in less than a

minute. The first objective was to see everybody, almost im

mediately—because that is the only way to give assurance.

IT SHOULD FIT ON AT-SHIRT

The effective mission statement is short and sharply focused.

It should fit on a T-shirt. The mission says why you do what

you do, not the means by which you do it. The mission is

broad, even eternal, yet directs you to do the right things

now and into the future so that everyone in the organization

can say, "What I am doing contributes to the goal." So it must

be clear, and it must inspire. Every board member, volunteer,

and staff person should be able to see the mission and say,

"Yes. This is something I want to be remembered for."

To have an effective mission, you have to work out an

exacting match of your opportunities, competence, and

commitment. Every good mission statement reflects all three.

You look first at the outside environment. The organization

that starts from the inside and then tries to find places to put

its resources is going to fritter itself away. Above all, it will

focus on yesterday. Demographics change. Needs change.

You must search out the accomplished facts—things that

14

What Is Our Mission?

have already happened—that present challenges and op

portunities for the organization. Leadership has no choice

but to anticipate the future and attempt to mold it, bearing in

mind that whoever is content to rise with the tide will also

fall with it. It is not given to mortals to do any of these things

well, but, lacking divine guidance, you must still assess

where your opportunity lies.

Look at the state of the art, at changing conditions, at

competition, the funding environment, at gaps to be filled.

The hospital isn't going to sell shoes, and it's not going into

education on a big scale. It's going to take care of the sick.

But the specific aim may change. Things that are of primary

importance now may become secondary or totally irrelevant

very soon. With the limited resources you have—and I don't

just mean people and money but also competence—where

can you dig in and make a difference? Where can you set a

new standard of performance? What really inspires your

commitment?

MAKE PRINCIPLED DECISIONS

One cautionary note: Neversubordinate the mission in order to

get money. If there are opportunities that threaten the integrity

of the organization, you must say no. Otherwise, you sell your

soul. I sat in on a discussion at a museum that had been of

fered a donation of important art on conditions that no self-

respecting museum could possibly accept. Yet a few board

members said, "Let's take the donation. We can change the

conditions down the road." "No, that's unconscionable!" others

15

Question I

responded, and the board fought over the issue. They finally

agreed they would lose too much by compromising basic prin

ciples to please a donor. The board forfeited some very nice

pieces of sculpture, but core values had to come first.

KEEPTHINKING IT THROUGH

Keep the central question What is our mission? in front of you

throughout the self-assessment process. Step by step you will

analyze challenges and opportunities, identify your customers,

learn what they value, and define your results. When it is

time to develop the plan, you will take all that you have

learned and revisit the mission to affirm or change it.

As you begin, consider this wonderful sentence from a

sermon of that great poet and religious philosopher of the

seventeenth century, John Donne: "Never start with tomor

row to reach eternity. Eternity is not being reached by small

steps." We start with the long range and then feed back and

say, "What do we do today?" The ultimate test is not the

beauty of the mission statement. The ultimate test is your

performance.

Note

The preceding text is from Peter F. Drucker, TheDrucker Founda

tion Self-Assessment Tool: Participant Workbook (San Francisco:

Jossey-Bass, 1999), SAT2, pp. 14-16.

16

Question I

WHAT IS OUR MISSION?

Jim Collins

sion? Such a simple question—but it goes right

td^tfh&ktfof the fundamental tension in any great institu- tiol/the SfFnamic interplay between continuity and change. Every truly great organization demonstrates the characteris

tic of preserve the core, yet stimulate progress. On the one

hand, it is guided by a set of core values and fundamental

purpose—a core mission that changes little or not at all over

time; and, on the other hand, it stimulates progress: change,

improvement, innovation, renewal. The core mission re

mains fixed while operating practices, cultural norms, strate

gies, tactics, processes, structures, and methods continually

change in response to changing realities. Indeed, the great

paradox of change is that the organizations that best adapt

to a changing world first and foremost know what should

not change; they have a fixed anchor of guiding principles

around which they can more easily change everything else.

17

Question I

They know the difference between what is truly sacred and

what is not, between what should never change and what

should be always open for change, between "what we stand

for" and "how we do things."

The best universities understand, for example, that the

ideal of freedom of inquiry must remain intact as a guiding

precept while the operating practice of tenure goes through

inevitable change and revision. The most enduring churches

understand that the core ideology of the religion must remain

fixed while the specific practices and venues of worship

change in response to the realities of younger generations.

Mission as Drucker thought of it provides the glue that holds

an organization together as it expands, decentralizes, global

izes, and attains diversity. Think of it as analogous to the prin

ciples of Judaism that held the Jewish people together for

centuries without a homeland, even as they scattered through

out the Diaspora. Or think of the truths held to be self-evident

in the U.S. Declaration of Independence, or the enduring

ideals of the scientific community that bond scientists from

every nationality together with the common aim of advancing

knowledge.

Your core mission provides guidance, not just about

what to do, but equally what not to do. Social sector leaders

pride themselves on "doing good" for the world, but to be of

maximum service requires a ferocious focus on doing good

only if it fits your mission. To do the most good requires say

ing no to pressures to stray, and the discipline to stop doing

what does not fit. When Frances Hesselbein led the Girl

18

What Is Our Mission?

Scouts of the USA, she pounded out a simple mantra: "We

are here for only one reason: to help a girl reach her highest

potential." She steadfastly steered the Girl Scouts into those

activities—and only those activities—where it could make a

unique and significant contribution of value to its members.

When a charity organization sought to partner with the Girl

Scouts, envisioning an army of smiling girls going door to

door to canvass for the greater good, Hesselbein com

mended the desire to make a difference, but gave a polite

and firm no. Just because something is a "once-in-a-lifetime

opportunity"—even a once-in-a-lifetime funding opportunity—

is merely a fact, not necessarily a reason to act. If a great op

portunity does not fit your mission, then the answer must be

"Thank you, but no."

The question of mission has become, if anything, even

more important as our world becomes increasingly disrup

tive and turbulent. No matter how much the world changes,

people still have a fundamental need to belong to something

they can feel proud of. They have a fundamental need for

guiding values and sense of purpose that give their life and

work meaning. They have a fundamental need for connec

tion to other people, sharing with them the common bond

of beliefs and aspirations. They have a desperate need for a

guiding philosophy, a beacon on the hill to keep in sight

during dark and disruptive times. More than any time in the

past, people will demand operating autonomy—freedom

plus responsibility—and will simultaneously demand that the

organizations of which they are a part stand for something.

19

QUESTION 2

♦

Who Is Our Customer?

♦ Who is our primary customer?

♦ Who are our supporting customers?

♦ How will our customers change?

23

ot 16%, agp, the word customer was rarely heard in the so- facial se"(f#|. Nonprofit leaders would say, "We don't have icustomei^ That's a marketing term. We have clients ... re cipients . . . patients. We have audience members. We have students." Rather than debate language, I ask, "Who must be

satisfied for the organization to achieve results?" When you

answer this question, you define your customer as one who values your service, who wants what you offer, who feels it's important to them.

Social sector organizations have two types of customers.

The primary customer is the person whose life is changed through your work. Effectiveness requires focus, and that means one response to the question, Who is our primary customer? Those who chase off in too many directions suf

fer by diffusing their energies and diminishing their perfor mance. Supporting customers are volunteers, members, partners, hinders, referral sources, employees, and others who must be satisfied. They are all people who can say no,

people who have the choice to accept or reject what you offer. You might satisfy them by providing the opportunity

for meaningful service, by directing contributions toward re sults you both believe in, by joining forces to meet commu

nity needs.

25

Question 2

The primary customer is never the onlycustomer, and to satisfy one customer without satisfying the others means there is no performance. This makes it very tempting to say there is more than one primary customer, but effective orga nizations resist this temptation and keep to a focus—the pri mary customer.

IDENTIFYTHE PRIMARY CUSTOMER

Let me give you a positive example of identifying and con centrating on the primary customer in a complex setting. A mid-sized nonprofit organization's mission is to increasepeo ple's economic and social independence. They have twenty- five programs considered to be in four different fields, but for thirty-five years they have focused on only one primary customer: theperson with multiple barriers toemployment. In the beginning, this meant the physically handicapped. Today, it still means people with disabilities but also single mothers who want to be finished with welfare, older workers

who have been laid off, people with chronic and persistent mental illness living in the community, and those struggling against long-term chemical dependency. Each belongs to a single primary customer group: the person with multiple barriers to employment. Results are measured in every pro gram by whether the customer can now gain and keep pro ductive work.

The primary customer is not necessarily someone you can reach, someone you can sit down with and talk to di

rectly. Primary customers may be infants, or endangered

26

Who Is Our Customer?

species, or members of a future generation. Whether or not you can have an active dialogue, identifying the primary cus tomer puts your priorities in order and gives you a reference point for critical decisions on the organization's values.

IDENTIFYING SUPPORTING CUSTOMERS

The Girl Scouts of United States of America is the largest girls'

and women's organization in the world and a nonprofit that exemplifies service to one primary customer—the girl—bal anced with satisfaction of many supporting customers, all of whom change over time. A long-held Girl Scouts priority is offering equal access to every girl in the United States. This has not changed since 1912 when the Girl Scouts founder said, "I have something for all the girls." Frances Hesselbein, at the time she was national executive director (1976-1990),

told me, "We look at the projections and understand that by the year 2000, one-third of this country will be members of minority groups. Many people are very apprehensive about the future and what this new racial and ethnic composition

will mean. We see it as an unprecedented opportunity to

reach all girls with a program that will help them in their growing-up years, which are more difficult than everbefore."

Reaching a changing primary customer means a new

view of supporting customers. Frances explained, "In a hous ing project with no Girl Scout troop there are hundreds of young girls really needing this kind of program, and families wanting something better for their children. It is important as we reach out to girls in every racial and economic group to

27

Question 2

understand the veryspecial needs, the culture, the readiness of each group. We work with many supporting customers; with the clergy perhaps, with the director of that housing project, with parents—a group of people from that particu larcommunity. We recruit leaders, train them right there. We have to demonstrate ourrespect for that community, our in terest in it. Parents have to know it will be a positive experi ence for their daughters."

KNOWYOUR CUSTOMERS

Customers are never static. There will be greater or lesser numbers in the groups you already serve. They will be come more diverse. Their needs, wants, and aspirations will evolve. There may be entirely newcustomers you must satisfy to achieve results—individuals who really need the service, want the service, but not in the way in which it is available today. And there are customers you should stop serving because the organization has filled a need, because people can be better served elsewhere, or because you are not producing results.

Answering the question Who is our customer? provides the basis for determining what customers value, defining your results, and developing the plan. Yet, even after careful

thought, customers may surprise you; then you must be pre pared to adjust. I remember one of my pastoral friends say ing of a new program, "Great, a wonderful program for the newly married." The program was indeed a success. But to the consternation of the young assistant pastor who de-

28

Who Is Our Customer?

signed it and ran it, not a single newly married couple en rolled. All the participants were young people living together and wondering whether they should get married. And the senior pastor had a terrible time with his brilliant young as sistant, who became righteous and said, "We haven't de signed it for them!" He wanted to throw them out.

Often, the customer is one step ahead of you. So you

must know your customer—or quickly get to know them. Time and again you will have to ask, "Who is our customer?"

because customers constantly change. The organization that is

devoted to results—always with regard to its basic integrity—

will adapt and change as they do.

Note

The preceding text is from Peter F. Drucker, The Drucker Founda tion Self-Assessment Tool: Participant Workbook (San Francisco: Jossey-Bass, 1999), SAT2, pp. 22-24.

29

Question 2

WHO IS OUR CUSTOMER?

Philip Kotler

frucker told us over forty years ago, "The purpose of a :>mpany is to create a customer. . . . The only profit center

le customer."Jack Welch, former CEO of General Electric,

drove the same point home to his employees: "Nobody can guarantee your job. Only customers can guarantee your job."

In the Internet age, when customers have so much more

information and are daily exchanging opinions with each

other, companies are finally waking up to the idea that they have a new boss: the customer. A perceptive Ford executive

at one time said, "If we're not customer driven, our cars

won't be either." Apparently the Ford company didn't listen

to this executive.

If Peter Drucker were here today, he would amend his

observation. He would say, "The best companies don't cre

ate customers. They create fans." He would say that it is less

important to report better profits this year than to check on

31

Question 2

whether you improved your share of the customer's mind and heart this year.

We must do a better job of understanding who the cus tomer is. The old thinking was that customers would hear

about us and, we hope, choose our products. The new thinking is that we, the company, choose our customers. We even may refuse to do business with certain customers. Our

business is not to casually please everyone, but to deeply please our target customers.

So the first job is to define our target customers. This de finition will affect everything: the designing of our product and its features, the choice of our distribution outlets, the

crafting of our messages, the choice of our media, and the setting of our prices.

In order to define our customer, we must take a broader

view of the buying process. The purchase of anything is the result of several roles being played. Consider the purchase of a new family automobile. The initiator might have been a family friend who mentioned an impressive new car. The teenage son might have been an influencer of the type of car to consider. The decider might be the wife. The buyer might be the husband.

The marketer's job is to identify these roles and use

the limited marketing resources to reach the most influ

ential people involved in the final decision. Marketers and

salespeople need skills in mapping the perceptions, prefer ences, and values of the different players in the decision making process.

32

Who Is Our Customer?

Many companies have adopted customer relationship management, meaning that they collect loads of information about transactions and encounters with their customers. Most

pharmaceutical firms, for example, have deep information on individual physicians and their values and preferences. In creasingly, however, we are recognizing that this information is not enough. It doesn't capture the quality of the customer experience. Simply managing data about customers is no sub stitute for ensuring that the customers are satisfied with their experience of the company. An old Chinese proverb says, "If you cannot smile, do not open a shop."

So in the end, we must master our knowledge of who are

the target customers, who and what influences them, and how to create highly satisfying customer experiences. Recog

nize that today's customers are increasingly buying on value,

not on relationship. Your success ultimatelydepends on what

you have contributed to the success of your customers.

33

QUESTION 3

♦

What Does

the Customer

Value?

♦ What do we believe our primary and

supporting customers value?

♦ What knowledge do we need to gain

from our customers?

♦ How will I participate in gaining this

knowledge?

37

la h4|̂ uestion, What do customers value?—what satisfies their n6jl|ls, wants, and aspirations—is so complicated that it can QJlLbe answered by customers themselves. And the first rule is that there are no irrational customers. Almost without

exception, customers behave rationally in terms of their own

realities and their own situation. Leadership should not even

try to guess at the answers but should always go to the cus

tomers in a systematic quest for those answers. I practice

this. Each year I personally telephone a random sample of

fifty or sixty students who graduated ten years earlier. I ask,

"Looking back, what did we contribute in this school? What

is still important to you? What should we do better? What

should we stop doing?" And believe me, the knowledge I

have gained has had a profound influence.

What does the customer value? may be the most impor

tant question. Yet it is the one least often asked. Nonprofit

leaders tend to answer it for themselves. "It's the quality of

our programs. It's the way we improve the community."

People are so convinced they are doing the right things and

so committed to their cause that they come to see the insti

tution as an end in itself. But that's a bureaucracy. Instead of

asking, "Does it deliver value to our customers?" they ask,

39

Question 3

"Does it fit our rules?" And that not only inhibits performance

but also destroys vision and dedication.

UNDERSTAND YOUR ASSUMPTIONS

My friend Philip Kotler, a professor at Northwestern Univer

sity, points out that many organizations are very clear about

the value they would like to deliver, but they often don't un

derstand that value from the perspective of their customers.

They make assumptions based on their own interpretation.

So begin with assumptions and find out what you believe

your customers value. Then you can compare these beliefs

with what customers actually are saying, find the differences,

and go on to assess your results.

WHAT DOES THE PRIMARY

CUSTOMERVALUE?

Learning what their primary customers value led to signifi

cant change in a homeless shelter. The shelter's existing be

liefs about value added up to nutritious meals and clean

beds. A series of face-to-face interviews with their homeless

customers was arranged, and both board and staff members

took part. They found out that yes, the food and beds are

appreciated but do little or nothing to satisfy the deep aspi

ration not to be homeless. The customers said, "We need a

place of safety from which to rebuild our lives, a place we

can at least temporarily call a real home." The organization

threw out their assumptions and their old rules. They said,

"How can we make this shelter a safe haven?" They elimi-

40

What Does the Customer Value?

nated the fear that comes with being turned back on the

street each morning. They now make it possible to stay at

the shelter quite a while, and work with individuals to find

out what a rebuilt life means to them and how they can be

helped to realize their goal.

The new arrangement also requires more of the cus

tomer. Before, it was enough to show up hungry. Now, to

get what the customer values most, he must make a com

mitment. He must work on his problems and plans in order

to stay on. The customer's stake in the relationship is greater,

as are the organization's results.

WHAT DO SUPPORTING

CUSTOMERS VALUE?

Your knowledge of what primary customers value is of ut

most importance. Yet the reality is, unless you understand

equally what supporting customers value, you will not be

able to put all the necessary pieces in place for the organi

zation to perform. In social sector organizations there have

always been a multitude of supporting customers, in some

cases each with a veto power. A school principal has to sat

isfy teachers, the school board, community partners, the tax

payers, parents, and above all, the primary customer—the

young student. The principal has six constituencies, each of

which sees the school differently. Each of them is essential,

each defines value differently, and each has to be satisfied at

least to the point where they don't fire the principal, go on

strike, or rebel.

41

Question 3

LISTEN TO YOUR CUSTOMERS

To formulate a successful plan you will need to understand

each of your constituencies' concerns, especially what they

consider results in the long term. Integrating what customers

value into the institution's plan is almost an architectural

process, a structural process. It's not too difficult to do once

it's understood, but it's hard work. First, think through what

knowledge you need to gain. Then listen to customers, ac

cept what they value as objective fact, and make sure the

customer's voice is part of your discussions and decisions,

not just during the self-assessment process, but continually.

Note

The preceding text is from Peter F. Drucker, TheDrucker Founda

tion Self-Assessment Tool: Participant Workbook (San Francisco: Jossey-Bass, 1999), SAT2, pp. 32-34.

42

Question 3

WHAT DOES THE

CUSTOMER VALUE?

Jim Kouzes

«#iing exemplary leaders do is about creating value for

}ieir customers.

ll^Jflp^t is exactly the perspective Patricia Maryland took when she came on board as president of Sinai-Grace Hospi

tal, in Detroit, Michigan. When Patricia arrived, she found a

hospital in distress. Sinai-Grace was the one hospital re

maining after a series of mergers, and all the "slashing and

burning" had left the staff feeling angry and distrustful. But

even after all the cuts, the hospital was still losing money.

Sinai-Grace was an organization not only looking for new

leadership but also searching for a new identity.

One of the first things Patricia noticed was that employ

ees mostly related to the way things had been done in the

past, and that breaking this deep-seated paradigm would be

43

Question 3

one of the first tasks Patricia and her team needed to tackle.

For example, one obvious challenge was the long waits that

patients—the hospital's customers—experienced in the emer

gency room. "When I first came here, it took people an av

erage of eight hours to be seen and admitted to a hospital

bed," Patricia said, "and this was clearly unacceptable."

Another challenge was the way the hospital was per

ceived by the community. According to Patricia, the percep

tion was that "it was a dirty hospital. There were individuals

who lived within a block of us who tended to go to other

hospitals. It was clear that the physical environment was a

big part of the problem." These kinds of issues demanded

immediate action, and because they had existed for so long

and were accepted by hospital staff as normal, resolving

them required experimenting with some fundamentally new

approaches.

To address the unacceptable ER wait times, Patricia

challenged the long-standing tradition of how the depart

ment was organized. The team accepted the challenge and

responded with an innovative new service. "One of the

changes we wanted to make was a separate area for chest

pain patients so they would be triaged immediately, and our

urgent care population could be moved to another area

called Express Care." In Express Care, the hospital built ex

amination rooms with walls, improving privacy and confi

dentiality. These simple changes reduced wait time by more

than 75 percent.

44

What Does the Customer Value?

Building on this success was a $100,000 foundation grant

to upgrade hospital decor. Fresh paint, new carpets, and

new furniture can do wonders for the morale of both pa tients and staff. Patricia got the doctors to donate artwork,

and the environment took an immediate turn for the better,

beginning to look like a contemporary medical center. "I re

ally felt it was important to create an environment here that

was warm, that was embracing, that would allow patients

coming in the door to feel some level of trust and comfort,"

Patricia explained.

Patricia also challenged staff to take a look at the way

they related to patients: "If this was your mother you were treating, if this patient was your father, how would you work

with them? How would you talk to them? How would you feel if someone was cold, unfriendly, and treated you like you're a piece of machinery rather than a human being?"

These first few changes at Sinai-Grace Hospital started an

outstanding turnaround. Customer service scores went up dramatically—from mostly ones and twos on a five-point scale to mostly fours and fives. Today staff morale is high, and there's a new vitality and enthusiasm at Sinai-Grace. And

the hospital is now doing quite well financially. Most impor tant, said Patricia, "There's confidence from the community, and they are feeling more comfortable coming back here."

All these improvements were driven by an unyielding commitment to listening to and creating value for the cus

tomer. It was Patricia's dedication to first understanding how

45

Question 3

the hospital's customers experienced Sinai-Grace and then

responding to their needs—and enabling staff to do the

same—that supported each innovation to restore the health

and well-being of the organization, and the morale and pride

of the staff. All of this was possible because Patricia and her

team had one fundamental purpose in mind: to create extra

ordinary value for the customer.

So, what does the customer value? Clearly customers

value an organization that seeks their feedback and that is

capable of solving their problems and meeting their needs.

But I would also venture to guess that customers value a

leader and a team who have the ability to listen and the

courage to challenge the "business-as-usual" environment,

all in service of the yearnings of the customer.

46

QUESTION 4

♦

What Are

Our Results?

♦ How do we define results?

♦ Are we successful?

♦ How should we define results?

♦ What must we strengthen or abandon?

49

h^esults of social sector organizations are always mea- sufigjd outside the organization in changed lives and changed cdliaitions—in people's behavior, circumstances, health, hopes, and above all, in their competence and capacity. To further the

mission, each nonprofit needs to determine what should be ap

praised and judged, then concentrate resources for results.

LOOK AT SHORT-TERM ACCOMPLISH

MENTS AND LONG-TERM CHANGE

A small mental health center was founded and directed by a

dedicated husband-and-wife team, both psychotherapists.

They called it a "healing community," and in the fifteen years

they ran the organization, they achieved results others had

dismissed as impossible. Their primary customers were peo

ple diagnosed with schizophrenia, and most came to the

center following failure after failure in treatment, their situa

tion nearly hopeless.

The people at the center said, "There is somewhere to

turn." Their first measure was whether primary customers and

their families were willing to try again. The staff had a number

of ways to monitor progress. Did participants regularly attend

group sessions and participate fully in daily routines? Did the

51

Question 4

incidence and length of psychiatric hospitalizations decrease?

Could these individuals show new understanding of their dis

ease by saying, "I have had an episode," as opposed to citing

demons in the closet? As they progressed, could participants

set realistic goals for their own next steps?

The center's mission was to enable people with serious

and persistent mental illness to recover, and after two or

more years of intensive work, many could function in this

world—they were no longer "incurable." Some were able to

return to a life with their family. Others could hold steady

jobs. A few completed graduate school. Whether or not

members of that healing community did recover—whether

the lives of primary customers changed in this fundamental

way—was the organization's single bottom line.

In business, you can debate whether profit is really an

adequate measuring stick, but without it, there is no business

in the long term. In the social sector, no such universal stan

dard for success exists. Each organization must identify its

customers, learn what they value, develop meaningful mea

sures, and honestly judge whether, in fact, lives are being

changed. This is a new discipline for many nonprofit groups,

but it is one that can be learned.

QUALITATIVE AND

QUANTITATIVE MEASURES

Progress and achievement can be appraised in qualitative

and quantitative terms. These two types of measures are

interwoven—they shed light on one another—and both are

52

What Are Our Results?

necessary to illuminate in what ways and to what extent

lives are being changed.

Qualitative measures address the depth and breadth of

change within its particular context. They begin with specific

observations, build toward patterns, and tell a subtle, indi

vidualized story. Qualitative appraisal offers valid, "rich"

data. The education director at a major museum tells of the

man who sought her out to explain how the museum had

opened his teenage mind to new possibilities in a way he

knew literally saved his life. She used this result to support

her inspiration for a new initiative with troubled youth. The

people in a successful research institute cannot quantify the

value of their research ahead of time. But they can sit down

every three years and ask, "What have we achieved that con

tributed to changed lives? Where do we focus now for re

sults tomorrow?" Qualitative results can be in the realm of

the intangible, such as instilling hope in a patient battling

cancer. Qualitative data, although sometimes more subjective

and difficult to grasp, are just as real, just as important, and

can be gathered just as systematically as the quantitative.

Quantitative measures use definitive standards. They

begin with categories and expectations and tell an objective

story. Quantitative appraisal offers valid "hard" data. Exam

ples of quantitative measures are as follows: whether overall

school performance improves when at-risk youth have in

tensive arts education; whether the percentage of welfare re

cipients who complete training and become employed at a

livable wage goes up; whether health professionals change

53

Question 4

their practice based on new research; whether the number

of teenagers who smoke goes up or down; whether inci

dences of child abuse fall when twenty-four-hour crisis care

is available. Quantitative measures are essential for assess

ing whether resources are properly concentrated for results,

whether progress is being made, whether lives and com

munities are changing for the better.

ASSESS WHAT MUST BE

STRENGTHENED ORABANDONED

One of the most important questions for nonprofit leader

ship is, Do we produce results that are sufficiently outstand

ing for us to justify putting our resources in this area? Need

alone does not justify continuing. Nor does tradition. You

must match your mission, your concentration, and your re

sults. Like the New Testament parable of the talents, your job

is to invest your resources where the returns are manifold,

where you can have success.

To abandon anything is always bitterly resisted. People

in any organization are always attached to the obsolete—the

things that should have worked but did not, the things that

once were productive and no longer are. They are most at

tached to what in an earlier book (Managing for Results,

1964) I called "investments in managerial ego." Yet aban donment comes first. Until that has been accomplished, little

else gets done. The acrimonious and emotional debate over

what to abandon holds everybody in its grip. Abandoning

anything is thus difficult, but only for a fairly short spell. Re-

54

What Are Our Results?

birth can begin once the dead are buried; six months later,

everybody wonders, "Why did it take us so long?"

LEADERSHIP IS ACCOUNTABLE

There are times to face the fact that the organization as a

whole is not performing—that there are weak results every

where and little prospect of improving. It may be time to

merge or liquidate and put your energies somewhere else.

And in some performance areas, whether to strengthen or

abandon is not clear. You will need a systematic analysis as

part of your plan.

At this point in the self-assessment process, you deter

mine what results for the organization should be and where

to concentrate for future success. The mission defines the

scope of your responsibility. Leadership is accountable to

determine what must be appraised and judged, to protect

the organization from squandering resources, and to ensure

meaningful results.

Note

The preceding text is from Peter F. Drucker, TheDrucker Founda tion Self-Assessment Tool: Participant Workbook (San Francisco:

Jossey-Bass, 1999), SAT2, pp. 40-44.

55

Question 4

WHAT ARE OUR RESULTS?

Judith Rodin

frucker wrote nearly fifteen years ago that the "most ^citing" development in his half century of work with non-

)fits was that they had begun to talk not of needs but of results. This was progress of a very important sort—and Drucker, typically, understated his own role in helping in

spire the change.

Drucker's explication of Question 4 clearly and cogently lays out some of the most important subordinate questions

in the evaluation of outcomes in the nonprofit sector: What

are the prerequisites for our success? How do our partners

and beneficiaries experience our work? What are our quali

tative as well as quantitative goals? How do we define our results? Do we have the courage to admit failure and let oth

ers learn from our mistakes?

I would submit, however, that Drucker's insights in this

matter are now sufficiently well understood that he would

57

Question 4

want us today to go further. The contemporary discussion around evaluation is no longer whether it is worthwhile—it

surely is; nor is it around whether quantitative measurements

alone are sufficient—surely they are not; nor is it confined to

whether failure is admissible—surely we must admit that

human efforts, no matter how well intended, must fall short, and that refusal to admit failure and share the knowledge with others only compounds that failure.

Instead, the next question—Question 4A, if you will— asks us how we use our results to play a role in Drucker's Question 5, "What is our plan?"

The FiveMost Important Questions proceeds on the im plicit premise that our plan is fixed and that the results

must flow from it. But the program work of a nonprofit is more iterative than linear. Our plan needs to be designed not only to further our mission but also toyield measurable results, so that we can know whether or not the plan is succeeding. Just as Drucker is correct in observing that needs are not enough, that intentions are insufficient, so it

is also true that a plan should not be considered complete, or even satisfactory, until it has been constructed in such a

way as to produce some measurable outcomes and to build

mechanisms, a priori, that allow midcourse corrections

based on these results. This work is not like conducting a clinical trial or a randomized controlled experiment, how ever, where we do not break the code until the end. The

goal is to achieve real impact; thus, measuring results is a

58

What Are Our Results?

tool for learning, for self-correcting, in order to reach in tended, specified outcomes.

In saying this, we must sail between two shoals, what we might think of as the Scylla and Charybdis of nonprofit plan ning. On the one hand, we must ensure that our plans are de signed in such a way that results can be measured. If necessary to guarantee this, we must even be willing to alter our choices of specific interventions to undertake, avoiding those where, for instance, the defined impact is so unclear and immeasur

able as to be beyond our reach. On the other hand, we must also avoid the other shoal—the temptation to undertake only

that work most easily quantified, to choose the sort of task that produces outputs, but fails to alter the most important out comes. In this way, to pursue the metaphor just one phrase further, our voyage is an artistic and not just scientific endeavor.

Drucker begins his discussion of Question 4 by observing,

with emphasis in the original, that "results are the key to our survival" as institutions. If results are our goal, they must also

be our test. What endures from the work of nonprofits is not

how hard we try or how clever we may be or even how much we care. Hard work is indispensable to success, of course, in

this as in any other field; intelligence is prized in our sector as

in all others involving intellectual endeavor; and caring is what has drawn the best people into this line of work. But ulti matelywhat is remembered is how we have been able to im prove lives. Peter Drucker understood this profoundly. This is why his question, "What are our results?" resonates today.

59

QUESTION 5

♦

What Is

Our Plan?

♦ Should the mission be changed?

♦ What are our goals?

63

hejstelf-assessment process leads to a plan that is a concise sufi|mation of the organization's purpose and future direc- tidfaLThe plan encompasses mission, vision, goals, objec tives, action steps, a budget, and appraisal. Now comes the

point to affirm or change the mission and set long-range

goals. Remember, every mission statement has to reflect

three things: opportunities, competence, and commitment. It

answers the questions, What is ourpurpose? Why do we do

what we do? What, in the end, do we want to be remembered

for?The mission transcends today but guides today, informs today. It provides the framework for setting goals and mobi

lizing the resources of the organization for getting the right

things done.

The development and formal adoption of mission and

goals are fundamental to effective governance of a nonprofit

organization and are primary responsibilities of the board.

Therefore, these strategic elements of the plan must be ap

proved by the board.

To further the mission, there must be action today and

specific aims for tomorrow. Yet planning is not mastermind

ing the future. Any attempt to do so is foolish; the future is

unpredictable. In the face of uncertainties, planning defines

65

Question 5

the particular place you want to be and how you intend to

get there. Planning does not substitute facts for judgment nor

science for leadership. It recognizes the importance of analy sis, courage, experience, intuition—even hunch. It is respon

sibility rather than technique.

GOALS ARE FEW, OVERARCHING, AND

APPROVED BYTHE BOARD

The most difficult challenge is to agree on the institution's

goals—the fundamental long-range direction. Goals are

overarching and should be few in number. If you have more

than five goals, you have none. You're simply spreading yourself too thin. Goals make it absolutely clear where you will concentrate resources for results—the mark of an orga

nization serious about success. Goals flow from mission, aim

the organization where it must go, build on strength, address opportunity, and taken together, outline your desired future.

An option for the plan is a vision statement picturing a

future when the organization's goals are achieved and its

mission accomplished. The Drucker Foundation's vision is A

society thatrecognizes thesocialsector as theleadingforce in creatinghealthy communities and improving the quality of life. I have worked with groups who became intensely mo

tivated by these often-idealistic and poetic statements,

whereas others say, "Let's not get carried away." If a vision

statement—whether a sentence or a page—helps bring the

plan to life, by all means include it.

66

What Is Our Plan?

Here is an example of the vision, mission, and goals for

an art museum.

Vision: A city where the world's diverse artistic heritage

is prized and whose people seek out art to feed their

mind and spirit.

Mission: To bring art and people together.

Goal 1: To conserve the collections and inspire partner

ships to seek and acquire exceptional objects.

Goal 2: To enable people to discover, enjoy, and under

stand art through popular and scholarly exhibitions,

community education, and publications.

Goal 3: To significantly expand the museum's audience and

strengthen its impact with new and traditional members.

Goal 4: To maintain state-of-the-art facilities, technolo

gies, and operations.

Goal 5: To enhance long-term financial security.

Building around mission and long-term goals is the only

way to integrate shorter-term interests. Then management

can always ask, "Is an objective leading us toward our basic

long-range goal, or is it going to sidetrack us, divert us, make

us lose sight of our aims?" St. Augustine said, "One prays for

miracles but works for results." Your plan leads you to work

for results. It converts intentions into action.

67

Question 5

OBJECTIVES ARE MEASURABLE,

CONCRETE,ANDTHE RESPONSIBILITY

OF MANAGEMENT

Objectives are the specific and measurable levels of achieve

ment that move the organization toward its goals. The chief

executive officer is responsible for development of objec

tives and action steps and detailed budgets that follow. The

board must not act at the level of tactical planning, or it in

terferes with management's vital ability to be flexible in how

goals are achieved. When developing and implementing a

plan, the board is accountable for mission, goals, and the al

location of resources to results, and for appraising progress

and achievement. Management is accountable for objectives,

for action steps, for the supporting budget, as well as for

demonstrating effective performance.

FIVE ELEMENTS OF

EFFECTIVE PLANS

Abandonment: The first decision is whether to abandon

what does not work, what has never worked—the things

that have outlived their usefulness and their capacity to con

tribute. Ask of any program, system, or customer group, "If

we were not committed to this today, would we go into it?"

If the answer is no, say "How can we get out—fast?"

Concentration: Concentration is building on success,

strengthening what does work. The best rule is to put your

68

What Is Our Plan?

efforts into your successes. You will get maximum results.

When you have strong performance is the very time to

ask, "Can we set an even higher standard?" Concentration

is vital, but it's also very risky. You must choose the right

concentrations, or—to use a military term—you leave your

flanks totally uncovered.

Innovation: You must also look for tomorrow's success,

the true innovations, the diversity that stirs the imagina

tion. What are the opportunities, the new conditions, the

emerging issues? Do they fit you? Do you really believe

in this? But you have to be careful. Before you go into

something new, don't say, "This is how we do it." Say,

"Let's find out what this requires. What does the cus

tomer value? What is the state of the art? How can we

make a difference?" Finding answers to these questions

is essential.

Risk taking: Planning always involves decisions on where

to take the risks. Some risks you can afford to take—if

something goes wrong, it is easily reversible with minor

damage. And some decisions may carry great risk, but you

cannot afford not to take it. You have to balance the short

range with the long. If you are too conservative, you miss

the opportunity. If you commit too much too fast, there

may not be a long run to worry about. There is no formula

for these risk-taking decisions. They are entrepreneurial and uncertain, but they must be made.

69

Question 5

Analysis: Finally, in planning it is important to recognize

when you do not know, when you are not yet sure

whether to abandon, concentrate, go into something new,

or take a particular risk. Then your objective is to conduct

an analysis. Before making the final decision, you study a

weak but essential performance area, a challenge on the

horizon, the opportunity just beginning to take shape.

BUILD UNDERSTANDING

AND OWNERSHIP

The plan begins with a mission. It ends with action steps and

a budget. Action steps establish accountability for objec

tives—who will do what by when—and the budget com

mits the resources necessary to implement the plan. To

build understanding and ownership for the plan, action

steps are developed by the people who will carry them

out. Everyone with a role should have the opportunity to

give input. This looks incredibly slow. But when the plan is

completed, the next day everyone understands it. More

people in the organization want the new, are committed to

it, are ready to act.

The Assessment Team will prepare the final plan for re

view by the board. Following presentation and discussion, the

board chairman will request approval of the mission, goals,

and supporting budget. The chairman may request adoption

of a vision statement, if one has been developed, as part of

the plan. As soon as approval is given, implementation begins.

70

What Is Our Plan?

NEVER REALLY BE SATISFIED

This is the last of the self-assessment questions, and your in

volvement as a participant soon draws to a close. Appraisal

will be ongoing. The organization must monitor progress in

achieving goals and meeting objectives, and above all, must

measure results in changed lives. You must adjust the plan

when conditions change, results are poor, there is a surprise

success, or when the customer leads you to a place different

from where you imagined.

True self-assessment is never finished. Leadership re

quires constant resharpening, refocusing, never really being

satisfied. I encourage you especially to keep asking the ques

tion, What do we want to be rememberedfor? It is a question

that induces you to renew yourself—and the organization—

because it pushes you to see what you can become.

Mission Goals

Appraisal Objectives

Budget - fe. Steps Action

71

Question 5

Note

The preceding text is from Peter F. Dmcker, TheDrucker Founda tion Self-Assessment Tool: Participant Workbook (San Francisco:

Jossey-Bass, 1999), SAT2, pp. 52-56.

72

Question 5

WHAT IS OUR PLAN?

V Kasturi Rangan

fg is the process of translating the organization's strate-

jic or mission goals to a set of actionable programs, and :ing the path of how those within the organization would

meet the goals. In a nutshell, strategy formulation is an ex

ercise in setting goals for the organization and developing a

model of how achieving the goals would advance the strate

gic purpose of the organization. A plan, by contrast, is the

action agenda that is aimed at reaching the goal. The biggest

mistake organizations make about a "plan" is to cast it in

stone as a tactical document, much like a construction draw

ing with all details filled in for perfect implementation. A

business plan is quite different. It is an execution process

that feeds back to better strategy making and goal setting.

Managers shape it, guide it, adapt it, and learn from it. The

following are the central elements to an effective plan.

73

Question 5

A Strong Focus on Goals: Organizations of all kinds—

whether private or nonprofit—need to have a strong focus

on their strategic goals. For a private organization, goals

could be about such things as market penetration, new prod

uct development, and customer satisfaction. For a nonprofit,

the organization's overarching mission must be first trans

lated into something that has operational traction, before

strategic goals can be set. Whereas the overarching mission

might be broad and inspirational, the operating mission must

be narrow enough to allow the organization to measure its

progress against goals.

Steadfast in Direction^ Flexible in Execution: A museum

that aims to boost attendance, for example, might plan a series

of special exhibitions to attract new or repeat visitors. But an

effective plan must go further. It must detail the nature of the

planned special exhibitions, their timing, and the promotional

programs to draw in the audience. The pitch may differ de

pending on whether it is new or repeat audiences that the mu

seum wishes to attract. But here lies an important caveat.

"Planning is not masterminding the future. Any attempt to do

so is foolish; the future is unpredictable," wrote Peter Drucker

in the last edition of this self-assessment tool. That's why it is

crucially important to keep an open mind regarding the sev

eral potential alternative ways of getting to the goal, even

while staying steadfast regarding the strategic direction.

For example, in the midst of its promotion, if the pro

gram team discovers that its exhibits seem to be attracting

74

What Is Our Plan?

much higher numbers of new-to-the-museum visitors than

expected, then it must show enough flexibility in its plans to

allocate a higher proportion of its resources to convert these

new visitors to members. Fresh initiatives may have to be

constructed midstream to solidify this opportunistic gain in

new visitors. At the same time, it is very important to under

stand the underlying reasons for this unexpected gain. Only

by learning why and absorbing the lessons will the team be

able to transfer the gains to future special exhibition pro

grams. By the same token, by learning about plans that have

gone awry, an organization will avoid expensive future mis

takes. Flexibility and a learning attitude have to be two im

portant characteristics of an effective plan.

Ownership and Accountability Placed with Individu

als: The persons responsible for executing a program

should be primarily involved in constructing the plan of ac

tion. The team could receive inputs from any number of

sources, but ultimately the authority for its execution, and

ownership for its success or failure should rest with named

individuals. That's why it is not useful to impose a detailed

planning blueprint from a central station. Once the imple

mentation team has internalized the strategic goals and

direction (perhaps some of its members playing a part in formulating them in the first place), they should be given

leeway to develop the action plan. This is the only way mo

tivated managers will experience the freedom to scale suc

cessful programs, and introspective managers will exercise

75

Question 5

judgment in reorienting or scaling down not-so-successful

programs.

Monitoring That Leads to Better Strategy: The main

purpose of monitoring the execution is to understand the

logic of each program and its connections to other programs

in delivering the strategic goals of an organization. Even

when the overall goals of an organization are being met, it

is not at all unusual for some programs to be wildly suc

cessful and others to fall short. That's why it is not sufficient

to monitor the overall attainment of the strategic goals by

themselves, but to dig in to find out which programs really

contributed to its success and which ones did not, and why.

Only through reflection can there be improvements to the

next round of strategy development. Such an exercise

should be conducted continuously over the planning cycle

and always involve the program managers as well as those

at a level higher than the individual program teams. The

team that was the architect of the strategic direction and

goals should be responsible for closing this final feedback

loop. This will then serve as a platform for the next plan

ning cycle.

76

TRANSFORMATIONAL LEADERSHIP

Frances Hesselbein

M a world where the rules are constantly changing, millions Ilk!|jt people in every sector of the economy are wrestling with pie new demands of leadership. I hear managers everywhere

discussing the same fundamental challenge: the journey to transformation, moving from where we are to where we

want to be in the tenuous future that lies before us. Around

the world—in universities, the community of faith, corpora tions, government, and the burgeoning social sector—leaders

are working to shape the transformation of their institutions.

A few years ago, I ventured to China with a team of four

thought leaders to deliver a series of seminars at the invita

tion of the Bright China Management Institute. As we talked with our Chinese colleagues, we used the same language to describe the power of mission that we use when we work

with the Salvation Army, the United States Army, Chevron,

77

Transformational Leadership

or the American Institute of Architects: vision, mission, goals.

The actual words are different in every language, but the

power of those words is universal. And with a common lan guage, people in every sector, in every culture, can have di

alogues of great meaning that help transform organizations.

In sharing experiences across the public, private, and so

cial sectors, I have found that organizations usually pass

eight milestones to reach their destination: a relevant, viable,

effective organization. These milestones are as relevant to a

small community group or the Girl Scouts as they are to a

large business or government agency.

/. Scan the environment. Through reading, surveys, in

terviews, and so on, we identify the major trends likely to

affect the organization. The essence of strategy is to define the implications of those trends. Sometimes we can catch a straw in the wind and have a responsive program or

project ready as the trend emerges—not after. This assess ment of emerging trends and implications, supplemented

by internal data, provides essential background for plan ning change—and offers a better basis for action than our own preconceptions. Flying on assumptions can be fatal.

2. Revisit the mission. At the Leader to Leader Institute,

we review our mission every three years, and refine it if nec

essary. The foundation is now more than fifteen years old, and we've revisited and refined our mission twice—not be

cause we couldn't get it right the first time, with Peter F.

78

Transformational Leadership

Drucker in the room, but because the environment and the

needs of our customers had changed.

The mission statement should simply explain why we do what we do, our reason for being—our purpose. Knowing that management is a tool, not an end, we manage not for the sake of managing in its own right, but for the mission. And

one's mission does not define how one operates, but simply why. It must be clear, powerful, compelling, and to the point. The mission of the International Red Cross—"To serve the

most vulnerable"—is a perfect example of clarity and power. When we revisit the mission, we ask ourselves the first

three of the five most important questions that Peter Drucker helped organizations answer for more than fifty years:

• What is our mission?

• Who is our customer?

• What does the customer value?

When we answer these, we are well on our way to manag ing for the mission.

3- Ban the hierarchy. Transformation requires moving peo ple out of their organizational boxes into flexible, fluid man agement systems. We cannot continue to put people into little

squares on a structure chart. Psychologicallyit boxes them in.

I prefer circles—concentric circles of functions and posi tions in a staffing design that looks almost organic. Job rota tion becomes an enriching reality. People move in circular

79

Transformational Leadership

ways—learning new skills, expanding positions. We need

to ban a hierarchy not suited to today's knowledge work

ers, "who carry their toolkits in their heads."

4. Challenge the gospel There should be no sacred cows as we challenge every policy, practice, procedure, and as

sumption. In transforming themselves, organizations must

practice "planned abandonment"—discarding programs, policies, and practices that work today but have little rele vance to the future and to the organization we are building

to meet that future.

5. Employ the power of language. Leaders must beam a few clear, consistent messages over and over. They must

lead by voice, communicating with all their customers, all their constituents, a few powerful messages that connect

and illuminate. When, for example, Max De Pree led his

company, Herman Miller, to world leadership, he spoke about workers needing "a covenant, not a contract." Such powerful aspirations—and the language to go with them— are essential to guide an organization into transformation.

6. Disperse leadership across the organization. Every organization must have not one but many leaders. Some speak of "empowerment"; others of "sharing the tasks of leadership." I think of it as dispersing leadership—with leaders developed and performing across every level of the organization. Leadership is a responsibility shared by all members of the organization.

80

Transformational Leadership

7. Leadfrom the front, don't push from the rear. The

leader of the future does not sit on the fence, waiting to see

which way the wind is blowing. The leader articulates clear

positions on issues affecting the organization and is the em

bodiment of the enterprise, of its values and principles.

Leaders model desired behaviors, never break a promise,

and know that leadership is a matter of how to be, not how

to do it.

8. Assess performance. Self-assessment is essential to

progress. From the beginning of the change process, we

are clear about mission, goals, and objectives. Well-defined

action steps and a plan for measuring results are essential

to planning any organizational change. We then can em

bark on the journey with goals and measures in place. At

the end of the process, the most exuberant phase of the

journey, we evaluate our performance and celebrate the

transformation. We do this by asking the next two of Peter

Drucker's five critical questions discussed earlier:

• What are our results?

• What is our plan?

♦

Across the globe, for leaders aware of the tenuous times

ahead, the journey to transformation is a journey into the fu

ture. These leaders are taking today's organization and trans

forming it into tomorrow's productive, high-performance

81

Transformational Leadership

enterprise. Although the milestones on the journey are known,

the destinations are uncharted, and for each organization the

destination will be determined not only by the curve of the

road ahead but also by the quality of the mission and the lead

ership it inspires.

82

THE SELF-ASSESSMENT PROCESS

Peter F. Drucker

h^^lf-Assessment Tool was intentionally developed as a flex- ibjfiresource. How you use this book will depend on your seHig and the particular purpose for which self-assessment isJSing undertaken. The Workbook has not arrived on your doorstep on its own. It is in your hands because you have an

interest in it or an Assessment Team, an instructor, a manager,

or leader has thought through a self-assessment process de

sign, identified a role for you, and asked you to participate. It

is the responsibility of that team or individual to explain the

purpose for self-assessment and to orient you to specific time

and task expectations.

The self-assessment process calls for broad participa tion to ensure understanding, ownership, and readiness to

act. Certain adaptations of the self-assessment process are

discrete and may be completed within a matter of weeks.

83

The Self-Assessment Process

Comprehensive self-assessment for an organization takes

place in three phases over a number of months. A detailed

Process Guide shows those leading self-assessment how to

properly organize and direct it.

This Workbook has a twofold purpose: (1) toguide your

individual thinking and (2) to prepare you and others for

productive discussion and decision making. To make the

most of what is offered here, you will do three things:

1. Thoroughly review the information that is provided

on your organization, its customers, trends in its op

erating environment, and other self-assessment ma

terials or reports.

2. Sit down with this Workbook and, in one or more

sessions, take the necessary time to read it through

and give a thoughtful response to the important

questions it asks.

3. Actively participate in a retreat, group discussions,

a one-to-one depth interview, or in other self-

assessment meetings.

My final word on how to use this book: Please don't

rush through it at the last minute. The five questions appear

simple, but they are not. Give them time to sink in; wrestle

over them. Properly carried through, self-assessment devel

ops skill, competence, and commitment. Active and attentive

84

The Self-Assessment Process

participation is an opportunity to enhance your vision and to

shape thefuture.

Note

The preceding text is from Peter F. Drucker, TheDrucker Founda

tion Self-Assessment Tool: Participant Workbook (San Francisco:

Jossey-Bass, 1999), SAT2, pp. 7-8.

85

SUGGESTED QUESTIONS TO

EXPLORE

The most important aspect of the Self- AssessmentTool is the questions it poses. Answers are important; you need answers because you need action. But the most important thing is to ask these questions.

—Peter F. Drucker1

QUESTION I:WHAT IS OUR MISSION?

As you work through the overarching question "What is our

mission?" consider the following additional questions—they

may help you find the answers you seek:

What are we trying to achieve?2

• What is your organization's current understanding of

the organization's mission?3

87

Suggested Questions to Explore

• What is your organization's reason for being?4

• Why do you do what you do?5

• For what, in the end, do you want to be remembered?6

What are the significant external or internal

challenges, opportunities, and issues?

• What significant challenges is the organization facing—

changing demographics, legislation or regulations,

emerging technologies, competition?

• What significant opportunities are presenting

themselves—partnerships and collaborations, leading-

edge practices or approaches, social or cultural trends?

• What are the emerging critical issues for the

organization—need for multilingual employees,

community-based issues, market share, rising cost of

health care, changing distribution channels?

Does our mission need to be revisited?7

• Does the mission statement need to be redefined? If

not, why not? If yes, why is that?8

• In what ways, if any, would you rewrite or refocus the

mission statement for your organization?9

• What would be the major benefits of a new mission?

Why do you say that?10

• What problems, if any, would you be likely to

encounter with the new mission? Among whom? Why

is that? What steps, if any, may need to be taken to

effect this change?11

88

Suggested Questions to Explore

QUESTION 2: WHO IS OUR CUSTOMER?

As you work through the overarching question "Who is our

customer?" consider the following additional questions—

they may help you find the answers you seek:

Who are our customers?

• Create a list of those who use the organization's products

or services. For nonprofits, from that list identify who

is the primary customer—the people whose lives are

changed through the organization's work. For businesses,

from the list identify who the primary customer is

currently and determine if that customer can and will

sustain the organization based on demographic potential

and so on. For public institutions, often the primary

customer is determined through legislation or by the

government authority establishing the organization.

• Create a list of supporting customers—the volunteers,

members, partners, funders, referral sources,

employees, and others—both inside and outside the

organization who must be satisfied.

• What value do we provide each of these customers?12

• Do our strengths, our competencies, and resources

match the needs of these customers? If yes, in what

way? If not, why not?13

Have our customers changed?14

• In what ways, if any, have your customers changed?

Think in terms of . . ,15

89

Suggested Questions to Explore

• Demographics? (age, sex, race, ethnicity)16

• Primary needs? (training, shelter, day care, and

so on)17

• Number? (greater, fewer)18

• Physical and psychological well-being? (such as

drug dependence, family dysfunction)19

• Other ways? (for example, location, workplace)20

• What are the implications of these changes for your

organization?21

Should we add or delete some customers?22

• What othergroups of customers, if any, should the

organization be serving? Why is that?23

• What special competencies does the organization have

to benefit them?24

• What groups ofcurrent customers, if any, should the

organization no longer serve?25

• Why is that? (Their needs have changed? Your

resources are too limited? Other organizations are more

effective? Their needs do not fit your organization's

mission? Its competencies?)26

QUESTION 3:WHAT DOES

THE CUSTOMERVALUE?

As you work through the overarching question 'What does the

customer value?" consider the following additional questions—

they may help you find the answers you seek:

90

Suggested Questionsto Explore

What do our customers value?27

• Think about value in terms of what your organization

does that fills a specific need, provides satisfaction, or

offers a benefit to your primary customers that they do not receive from another source. For each group of primary customers . . . briefly describe what each

values about your organization.28

• Think about value in terms of what your organization

does that fills a specific need, provides satisfaction, or

offers a benefit to your secondary customers that they do not receive from another source. For each group of

supporting customers . . . briefly describe what each

values about your organization.29

• What are our customers' long-term aspirations, and

what is our capacity and competency to deliver on

those aspirations?

• How well does your organization provide what each of

your customers considers value?30

• How can the knowledge you have about what your

customers consider value be used to make decisions

in areas like those listed?31

• Products or services

• Recruitment

• Training

• Innovation

• Fund development

• Marketing

• Other

91

Suggested Questionsto Explore

• What resources—internal and external—can you use to

determine your customers' level of satisfaction? For

example, do you need to conduct a survey of current

customers as well as those who no longer use your

service?32

• What do our supporting customers consider value?33 • If they are donors, do they value recognition or a sense

that their contribution is helping solve a community

problem?

• If they are volunteers, do they give of their time

because they seek to learn new skills, make new

friends, feel that they are helping to change lives?

• If they are related to the primary customer, do we

know what their expectations are, as related to their

family member?

• If they are distributors or members of the supply chain

for our product or service, what are their needs and

constraints related to their mission, profitability,

and goals?

QUESTION 4: WHAT ARE OUR RESULTS?

As you work through the overarching question "What are

our results?" consider the following additional questions—

they may help you find the answers you seek:

How do we define results for our organization?34

• Having thought through the first three Drucker

questions on Mission, Customers, and Value . . .

92

Suggested Questionsto Explore

would you define "results" any differently? Why or why not?35

• How would you define results in the future?

To what extent have we achieved these results?36

• Considering your responses [to the questions in the

previous section], to what extent has your organization

achieved these results?37

• What are the major activities or programs that have

helped (or hindered) the achievement of these results?38

• How will you measure results in the future, both

qualitatively and quantitatively?

How well are we using our resources?39

• How well is your organization using its human

resources—its volunteers, board, staff, and so on?

How do you know that? What should the organization be doing?40

• How well is your organization using its financial

resources—such as its money, buildings, investments,

gifts? How do you know that? What should the

organization be doing?41

• How effectively are we attending to the value and

positioning of our brand and our brand promise? • What have been the results of your organization's

efforts to attract and keep donors? Why is that?42

• How does the organization define and share its results

with the donors? In what ways, if any, should it change its procedures? Why or why not?43

93

Suggested Questions to Explore

• Are other, similar organizations doing a better job of

using their human and financial resources? Of attracting

and satisfying donors? Of using their board? If yes, why

is that? What can you learn from them?44

QUESTION 5:WHAT IS OUR PLAN?

As you work through the overarching question "What is our

plan?" consider the following additional questions—they

may help you find the answers you seek:

What have we learned, and what do

we recommend?45

• List the most important lessons and summarize the

actions they suggest.46

• Think about information that will help not only in the

area for which you have responsibility but also in

planning for the future direction and activities of the

organization.47

Where should we focus our efforts?48

• List those areas where you believe your group or area

ofresponsibility should be focused. Briefly state your reasons and how each one fits the mission.49

• Given what you have learned, list those areas where

you believe your organization should be focused. Next, briefly state your reasons and how each one fits

the mission.50

94

Suggested Questions to Explore

What, if anything, should we do differently?51

• Are there programs, activities, or customer needs that

the organization should add?52

• Abandon?53

• Refer to other organizations, that is, "outsource" if it is

unable to handle them effectively or efficiently in- house?54

• Why is that?55

What is our plan to achieve results for

the organization?56

• What are the goals that will enable us to achieve the

desired results?

• For nonprofits, what are the goals (fundamental aims)

that will change lives and help us further the mission?

• What are the measurable objectives that will enable us to achieve our goals?

• What are the measurable action steps that will enable us to achieve our objectives?

• What are the budget implications of the resources

required to achieve these goals, objectives, and action steps?

• What are the target dates for completion?

• Who will be responsible and accountable for achieving each goal, objective, and action step?

• What staffing will be needed to support this plan? • How do we evaluate and measure the desired results?

95

Suggested Questions to Explore

What is my plan to achieve results for my group or

responsibility area?57

• Make a list of action items you have the authority to

enact as well as those recommendations that need to

be approved by appropriate board and staff teams.58 • Then establish a target date for approval and

implementation.59

• Identify staff support needed.60

Notes

Where indicated with endnotes, the preceding text is from

Peter F. Drucker, TheFiveMostImportantQuestions You Will

EverAskAbout Your Nonprofit Organization (San Francisco:

Jossey-Bass, 1993), SATl. The endnotes specify the source

page numbers. See facing page.

96

Suggested Questions to Explore

1. p. 3. 21. p. 26. 41. p. 46. 2. p. 15. 22. p. 27. 42. p. 47.

3. p. 15. 23. p. 27. 43. p. 47. 4. p. 15. 24. p. 27. 44. p. 48.

5. p. 15. 25. p. 28. 45. p. 54.

6. p. 15. 26. p. 28. 46. p. 54. 7. p. 18. 27. p. 33. 47. p. 54.

8. p. 18. 28. p. 33. 48. p. 55.

9. p. 18. 29. p. 34. 49. p. 55. .0. p. 19. 30. p. 35. 50. p. 56.

1. p. 19. 31. p. 36. 51. p. 57. 2. p. 24. 32. p. 37. 52. p. 57.

L3. p. 24. 33. p. 34. 53. p. 57. 14. p. 26. 34. p. 44. 54. p. 57. L5. p. 26. 35. p. 44. 55. p. 57. 6. p. 26. 36. p. 45. 56. p. 60. .7. p. 26. 37. p. 45. 57. p. 58. L8. p. 26. 38. p. 45. 58. p. 58. L9. p. 26. 39. p. 46. 59. p. 58.

20. p. 26. 40. p. 46. 60. p. 58.

The text not attributed to Peter F. Drucker in the form of

an endnote was contributed by trainers Maria Carpenter Ort

and Tamara Woodbury—who have worked extensively with

Drucker's TheFive Most Important Questions You WillEver

Ask About Your Nonprofit Organization—along with project editor Peter Economy to address common situations not cov

ered in Drucker's original text.

97

DEFINITIONS OF TERMS

Action steps: Detailed plans and activities directed toward

meeting an organization's objectives.

Appraisal: Process for monitoring progress in meeting ob

jectives and achieving results; point at which the plans for

meeting objectives may be modified, based on experience

or changed conditions.

Budget: The commitment of resources necessary to im

plement plans—the financial expression of a particular plan

of work.

Customers: Those who must be satisfied in order for the

organization to achieve results. The primary customer is

the person whose life is changed through the organization's

work. Supporting customers are volunteers, members, part ners, hinders, referral sources, employees, and others who

must be satisfied.

Customer value: That which satisfies customers' needs

(physical and psychological well-being), wants (where,

99

Definitions ofTerms

when, and how service is provided), and aspirations (de

sired long-term results).

Depth interviews: One-on-one interviews used to high

light the insights of a select group of individuals inside

the organization. Interview findings provide a touchstone

for group discussions and decision making.

Goals: A set of three to five aims that set the organization's

fundamental, long-range direction.

Mission: Why you do what you do; the organization's rea

son for being, its purpose. Says what, in the end, you want

to be remembered for.

Objectives: Specific and measurable levels of achievement.

Plan: Your proposed approach to achieving the organiza

tion's goals, objectives, and action steps. To be effective,

plans must contain firm target dates for completion; specific

individuals who will be responsible and accountable for

achievement and completion of goals, objectives, and ac

tion steps; and necessary human (people) and financial

(money) resources.*

Results: The organization's bottom line. Defined in

changed lives—people's behavior, circumstances, health,

hopes, competence, or capacity. Results are always out

side the organization.

Vision: A picture of the organization's desired future.

100

Definitions ofTerms

Note

Except for (*), the preceding text is from Peter F. Drucker, The Drucker Foundation Self-Assessment Tool: Participant Workbook

(San Francisco: Jossey-Bass, 1999), SAT2, pp. 9-10.

ABOUT THE CONTRIBUTORS

Jim Collins is one of the greatest thought leaders of his

generation. He is a student and teacher of enduring great

companies—how they grow, how they attain superior perfor

mance, and how good companies can become great compa

nies. He is the author of such business classics as Good to

Great and Built toLast and the monograph Goodto Great and

the Social Sectors. Visit his Web site at www.jimcollins.com.

♦

Philip Kotler is the S. C.Johnson & Son Distinguished Pro

fessor of International Marketing at the Northwestern Uni

versity Kellogg Graduate School of Management in Chicago

and the coauthor with Nancy Lee of the book CorporateSo

cial Responsibility: Doing the Most Goodfor Your Company

and Cause. Visit the Kotler Marketing Group Web site at

www.kotlermarketing.com.

103

About the Contributors

♦

Jim Kouzes is the coauthor with Barry Posner of the award-

winning and best-selling book The Leadership Challenge,

with over one million copies sold. He is also an executive

fellow at the Center for Innovation and Entrepreneurship,

Leavey School of Business, Santa Clara University. Visit the

Kouzes-Posner Web site at www.kouzesposner.com.

♦>

Judith Rodin has served as president of the RockefellerFoun

dation since March 2005. A groundbreaking research psychol

ogist, Dr. Rodin was previously the president of the University

of Pennsylvania, the first woman to lead an Ivy League insti tution, and earlier the provost of Yale University. Visit the

Rockefeller Foundation Web site at www.rockfound.org.

♦

V. Kasturi Rangan is the Malcolm P. McNair Professor of Mar

keting at the Harvard Business School and coauthor with

Marie Bell of Transforming Your Go-to-Market Strategy: The Three Disciplines ofChannelManagement. Until recently the chairman of the Marketing Department (1998-2002), he is

now the cochairman of the school's Social Enterprise Initiative.

Visit the Harvard Business School Web site at www.hbs.edu.

104

About the Contributors

♦

Frances Hesselbein is the founding president and chairman

of the Leader to Leader Institute, formerly the Peter F. Drucker

Foundation for NonprofitManagement. She served as CEO of the Girl Scouts of the USA and was awarded the Presidential

Medal of Freedom. She is the author of Hesselbein on Leader

ship; coeditor of twenty other books, including Be, Know, Do; and the editor in chief of the award-winning journal Leaderto

Leader.

105

ABOUT THE LEADER TO LEADER

INSTITUTE

Established in 1990 as the Peter F. Drucker Foundation for

Nonprofit Management, the Leader to Leader Institute fur thers its mission—to strengthen the leadership of the social

sector—by providing social sector leaders with essential leadership wisdom, inspiration, and resources to lead for in novation and to build vibrant social sector organizations. It

is this essential social sector, in collaboration with its part

ners in the private and public sectors, that changes lives and builds a society of healthy children, strong families, good schools, decent housing, safe neighborhoods, and work that

dignifies, all embraced by the diverse, inclusive, cohesive community that cares about all its people.

The Leader to Leader Institute provides innovative and

relevant resources, products, and experiences that enable leaders of the future to address emerging opportunities and

challenges. With the goal of leading social sector organiza

tions toward excellence in performance, the Institute has

brought together more than four hundred great thought

107

About the Leader to Leader Institute

leaders to publish twenty-three books available in twenty- eight languages, and the quarterly journal, Leader toLeader. This Apex Award-winning journal is the essential leadership resource for leaders in business, government, and the social sectors—leaders of the future.

The Leader to Leader Institute engages social sector lead ers in partnerships across the sectors that provide new and significant opportunities for learning and growth. It coordi nates unique, high-level summits for leaders from all three

sectors and collaborates on workshops and conferences for social sector leaders on leadership, self-assessment, and cross-sector partnerships.

Building on its legacy of innovation, the Leader to Leader Institute explores new approaches to strengthen the leadership of the social sector. With sources of talent and in

spiration that range from the local community development corporation to the U.S. Army to the corporate boardroom, the Institute helps social sector organizations identify new leaders and new ways of managing that embrace change and abandon the practices of yesterday that no longer achieve results today.

108

ACKNOWLEDGMENTS

We at the Leader to Leader Institute wish to express our

deepest appreciation to all those who helped bring this work to fruition: Peter Drucker, Jim Collins, Philip Kotler, Jim

Kouzes,Judith Rodin, V. Kasturi Rangan, Frances Hesselbein,

Peter Economy, Jeong Bae, Jeannie Radbill, Maria Carpenter

Ort, Tamara Woodbury, Peggy Outon, Bruce and Anne Tur-

ley, Dr. Denice Rothman Hinden, and the attendees of the 2006 Self-Assessment Tool revision planning retreat and of

the 2007 Self-Assessment Tool review, and to Constance

Rossum for her contributions to the writing of the first edi

tion of The FiveMost Important Questions tool in 1993. And we are deeply grateful to three very close and

trusted friends and colleagues of the late Peter Drucker who

contributed funding to publish and promote this edition of the Self-Assessment Tool: Bob Buford, Bill Pollard, and David

Jones. From the bottom of our hearts we thank you. We

could not have accomplished this important undertaking

without your support and friendship, and your generositywill have an impact on lives around the world for years to come.

109

ADDITIONAL RESOURCES

The Leader to Leader Institute

• www.leadertoleader.org

• Frances Hesselbein & Alan Shrader, Leader to Leader 2:

EnduringInsights on Leadershipfrom theLeader to Leader Institute'sAward-Winningfournal. San

Francisco: Jossey-Bass, 2007

• Frances Hesselbein & Marshall Goldsmith, The Leader

of theFuture 2: Visions, Strategies, and Practicesfor the New Era. San Francisco: Jossey-Bass, 2006

The Leader to Leader Self-Assessment Tool

• Visit the tool at www.fivequestionsbook.com

• James G. Dalton, Jennifer Jarratt, & John Mahaffie,

From Scan to Plan: Integrating Trends into the Strategy

Making Process. Washington, D.C.: ASAE and the Center for Association Leadership, 2003

• www.asaecenter.org/files/FileDownloads/FromScanto

Plan.pdf

Additional Resources

Peter F. Drucker

• www.druckerarchives.net

• Peter F. Drucker & Joseph A. Maciarello, The

Effective Executive in Action: Afournalfor Getting theRight Things Done. New York: HarperBusiness, 2005

• Peter F. Drucker, The Essential Drucker: The Bestof Sixty Years ofPeter Drucker's Essential Writings on Management. New York: HarperBusiness, 2003

• Peter F. Drucker, Managing in a Time ofGreat Change. New York: Truman Tally Books, 1995

• Peter F. Drucker, Management: Tasks, Responsibilities, Practices. New York: HarperBusiness, 1993

• Peter F. Drucker, Managing theNon-Profit Organization: Practices and Principles. New York: HarperCollins, 1992

Jim Collins

• www.jimcollins.com

• Jim Collins, Good to Great and the Social Sectors. New

York: HarperCollins, 2005

• Jim Collins, Good to Great: Why Some Companies Make the Leap . . . and Others Don't. New York:

HarperBusiness, 2001

• Jim Collins &Jerry Porras, Built to Last: Successful Habits of Visionary Companies. New York:

HarperBusiness, 1994

112

Additional Resources

Philip Kotler

• www.kotlermarketing.com

• Philip Kotler & Kevin Lane Keller, Marketing

Management, 12th Edition. Upper Saddle River, N.J.:

Prentice Hall, 2005

• Philip Kotler, According to Kotler: The World's Foremost

Authority on Marketing Answers YourQuestions. New

York: AMACOM, 2005

• Philip Kotler& Nancy Lee, Corporate SocialResponsibility:

Doing theMostGoodfor Your Companyand Cause.

Hoboken, N.J.: Wiley, 2004

• Philip Kotler, Kotleron Marketing: How to Create, Win,

and Dominate Markets. New York: Free Press, 2001

Jim Kouzes

• www.kouzesposner.com

• James M. Kouzes & Barry Z. Posner, TheLeadership

Challenge, 4th Edition. San Francisco: Jossey-Bass,

2007

• James M. Kouzes & Barry Z. Posner, A Leader's Legacy.

San Francisco: Jossey-Bass, 2006

• James M. Kouzes & Barry Z. Posner, Encouraging the

Heart: A Leader's Guide to Rewarding and Recognizing

Others. San Francisco: Jossey-Bass, 2003

13

Additional Resources

Judith Rodin

• www.rockfound.org

• Judith Rodin, The University and Urban Revival: Out oftheIvory Tower and into theStreets. Philadelphia: University of Pennsylvania Press, 2007

• Judith Rodin & Stephen P. Steinberg, editors, Public

Discourse in America: Conversation and Community in

the Twenty-First Century. Philadelphia: University of Pennsylvania Press, 2003

V. Kasturi Rangan

• http://hbswk.hbs.edu/faculty/vrangan.html • V. Kasturi Rangan & Marie Bell, Transforming Your

Go-to-Market Strategy: The Three Disciplines ofChannel Management. Boston: Harvard Business School Press,

2006

• Rajiv Lai, John Quelch, & V. Kasturi Rangan, Marketing Management: Textand Cases. New York: McGraw-Hill,

2004

114

INDEX

A Abandonment

decisions regarding program, 68

practicing "planned," 80 Accountability

established for objectives, 70 leadership, 55 placed with individual team

members, 75-76 American Institute of Architects,

78

Analysis, 70 Aristotle, 4 Assessment Team, 70

Assumptions customer satisfaction, 3 relying on information instead

of, 78 about what customers value,

40

Augustine, St., 67

B

Bright China Management Insti tute, 77-78

Buyers, 32

c Changing lives

as nonprofit organization's purpose, 13-14

self-assessment role in, 5-6 See also Organizational change

Chevron, 77 Collins, J., 17 Communication

constructive dissent, 4-5 listening element of, 5, 42 power of consistent and clear,

80

Community building, 5 Concentration concept, 68-69 Constructive dissent, 4-5 Customer experience, 33 Customer satisfaction assump

tions, 3

Customers

description of nonprofit, 3 identifying identity of your,

31-33

knowing your, 28-29 listening to your, 5, 42 managing relationship with, 33 primary, 25, 26-27 supporting, 25, 27-28, 41

15

Index

See also Programs; What cus tomers value

D

De Pree, M., 80

Deciders, 32 Decision making

conducting an analysis prior to, 70

encouraging constructive dis sent during, 4-5

importance of principled, 15-16 on where to take risks, 69 on whether to abandon what

ever isn't working, 68 Donne, J., 16 Drucker Foundation, 2, 66 Drucker, P. F, 1, 31-32, 57, 59,

74, 79, 83

Empowerment, 80

G

General Electric, 31 Girl Scouts of the USA, 18-19, 27,

78

Goals

continual appraisal of, 71 creating few and overarching,

66-67

examples of an art museum, 67 planning focus on, 65-66, 74

H

Herman Miller, 80 Hesselbein, F., 18-19, 27-28 Hierarchy fallacy, 79-80

Influencers, 32 Initiators, 32

Innovation, 69 International Red Cross, 79

J Judaism Diaspora, 18

K

Kotler, P., 31, 40 Kouzes, J., 43

Leader to Leader Institute, 2 Leadership

change accountability of, 55 core mission as providing

guidance to, 18-19 self-assessment requirement

of, 5-6 transformational, 77-82

Listening to customers, 42 expanding vision by, 5

M

Management as nonprofit requirement, 1 objectives as responsibility of,

68

Managing for Results (Drucker), 54

Marketers/marketing, 32 Maryland, P., 43-44, 45 Mission

116

Index

changing lives as, 13-14 examples of an art museum, 67 making principled decisions in

line with, 15-16 matching nonprofit opportuni

ties to, 14-15 nonprofit question regarding

essence of our, 17-19 organization plan that encom

passes, 65-66 revisiting the, 78-79 self-assessment process ap

plied to the, 16 Mission statement

characteristics of an effective,

14-15, 79 International Red Cross, 79

Monitoring, 76

N

Nonprofit organization questions 1. What Is Our Mission?

13-16, 17-19 2. Who Is Our Customer?

25-29, 31-33 3. What Does the Customer

Value? 39-42, 43-46 4. What Are Our Results?

51-55, 57-59 5. What Is Our Plan? 65-71,

73-76

Nonprofit organizations banning the hierarchy in, 79-80 changing lives mission of,

13-14

customers of, 3, 25-29 encouraging constructive dis

sent within, 4-5 scanning the environment of,

78

short-term

accomplishments/long-term change for, 51-55

See also Organizational change; Programs

Northwestern University, 40

o

Objectives continual appraisal of, 71 creating measurable and con

crete, 68 establishing accountability for,

70

organization plan that encom passes, 65-66

Organizational change assessing what needs to un

dergo, 54-55 leadership accountability for,

55

planning role in, 4, 58-59 qualitative and quantitative

measures of, 52-54 short-term accomplishments

and long-term, 51-52 See also Changing lives;

Nonprofit organizations; Transformational

leadership Ownership

building, 70 placed with individual team

members, 75-76

Performance assessment, 81 "Planned abandonment" practice,

80

17

Index

Planning/plans building understanding and

ownership of, 70, 75-76 as continuing process, 4 description, 65-66, 73 five elements of effective, 68-70 Scylla and Charybdis of non

profit, 59 steadfast in direction but flexi

ble execution, 74-75 strong focus on goals, 65-66, 74 to yield measurable results,

58-59

Primary customers described, 25 identifying the, 26-27

Programs assessing what needs to be

changed, 54-55 conducting analysis of, 70 decisions on whether to aban

don, 68 monitoring in order to im

prove, 76 practicing "planned abandon

ment" of, 80 See also Customers; Nonprofit

organizations

Qualitative measures, 52-54 Quantitative measures, 52-54 Questions. See Nonprofit organi

zation questions

Rangan, V. K., 73 Results

assessing resource allocation based on, 54-55

importance of assessing, 57-59

leadership accountability for, 55

qualitative and quantitative measures of, 52-54

short-term

accomplishments/long-term change, 51-52

Risk taking, 69 Rodin, J., 57

Sacred cows, 80 Salvation Army, 77 Self-assessment process

applied to the mission, 16 assessing performance

through, 81 benefits of commitment to,

5-6

broad participation required for, 83-84

description and functions of, 2-3

five essential questions asked during, 2

formulating a plan using the, 4 to identify the customer,

25-29, 31-33 to identify what the customer

values, 39-42, 43-46 leading to an effective plan,

65-71, 73-76 to measure results, 51-55,

57-59

as ongoing and continuous, 71

118

Index

Self-Assessment Tool, 83 Sinai-Grace Hospital (Michigan),

43-46

Society creating citizens of tomor

row's, 5-6 Drucker Foundation's vision

of, 66 Supporting customers

described, 25 identifying, 27-28 identifying what they value,

41

Transformational leadership ban the hierarchy task of,

79-80

challenge the gospel task of, 80

disperse organizational leader ship task of, 80

employ the power of lan guage task of, 80

lead from the front task of, 81 performance assessment task

of, 81 revisiting the mission task of,

78-79

scanning the environment task of, 78

See also Organizational change Trust, 4

u

United States Army, 77 U.S. Declaration of Indepen

dence, 18

V Vision

examples of an art museum, 67 expanding through customer

feedback, 5 organization plan that encom

passes, 65-66 Vision statement

adoption of, 70 which includes goals and mis

sion, 66

w

Welch, J, 31 What customers value

importance of understanding, 39-40

listening in order to under stand, 42

Sinai-Grace Hospital case study on, 43-46

understanding primary cus tomer, 40-41

understanding supporting cus tomers, 41

understanding your assump tions about, 40

See also Customers

119

With Peter Drucker's five essential questions and the help of five of today's thought leaders, this little book will challenge readers to take a close look at the

very heart of their organizations and what drives them. A tool for self-assessment

and transformation, answering these five questions will fundamentally change

the way you work, helping you lead your organization to an exceptional level of

performance.

PRAISE FOR The FIVE MOST IMPORTANT QUESTIONS

YOU WILL EVER ASK ABOUT YOUR ORGANIZATION

"The Leader to Leader Institute has done a great service in bringing us this mono graph. Good leaders come up with answers, but great leaders ask the right ques tions—and this wonderful work helps all leaders do exactly that."

—Jim ColHnS, author, Good to Great and the Social Sectors

"An amazing resource that can help even the most successful organizations become more successful!"

-Marshall Goldsmith, author, What Got You Here Won't Get You There, winner of the Harold Longman Best Business Book of 2007

"Peter Drucker's Five Most Important Questions continue to be the indispensable questions an organization must ask itself, regardless of size or sector, if it is deter mined to be an organization of the future."

-Kathy Cloninger, ceo, Girl scouts ofthe usa

"At a time when the need for more effective management and more ethical lead ership is the moral equivalent of global warming, Drucker's common sense and courage should be modeled by everyone."

—Ira A. JaCKSOn, dean,Peter F. Drucker and Masatoshi Ito Graduate School of Management, and board member, The Drucker Institute

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