Drucker School—Business Performance Basics

Get to Know the Drucker School of Business

• Peter F. Drucker was a management theorist and consultant, for whom the Drucker School of Management at Claremont Graduate University is named
  • This module examines management principles, applies them to real-world examples, links them to the role of an administrator, and shows how Salesforce can help
• Drucker’s philosophy focuses on management as a human enterprise, with an emphasis on being customer- and market-driven.
  • Believed in taking a deliberate approach to achieving the right objectives for the organization
  • He noted management is a “practice” that can be learned and mastered, which makes us better contributors at work, which ultimately makes us better managers.
  • “The purpose of a business is to create and keep a customer.”

Understand the Five Most Important Questions to Ask About Your Business

• “The most serious mistakes are not being made as a result of wrong answers. The true dangerous thing is asking the wrong question.” -Drucker
• This module examines Drucker’s five most important questions to help companies reflect deeply on the nature of their business and value proposition.
  

1. What is the purpose of the business?
   • Not “to make money” or “satisfy customers,” it why the company exists, the difference it makes in the eyes of its customers
   • High-performing organizations understand their purpose and use it to develop a compelling vision and mission, which aligns departments and resources, guides decision-making, and empowers and motivates individuals.
   • Green Mountain Coffee: “…an innovative, technology- and values-based, personal beverage system company.”
2. Who is our customer?
   • Describe the customer in more abstract terms to define a category or group of customers - these groups or categories of customers are called segments.
   • Customers are not fixed targets, but are constantly evolving and changing.
   • Edward Jones was originally honed in a target market segment that was “rural-based, conservative, long-term individual investors,” but realized their customers also lived in metropolitan areas too
3. What does our customer value?
   • Drucker understood that what customers value, and what a company thinks they value, are often very different.
   • There is danger when the company assumes it knows what customers value - people need to systematically work with customers to figure out what matters and how to deliver that value better than competition.
   • Interviews, surveys, focus groups, social media
4. What are our results?
   • Results should help measure the extent to which a company is meeting its purpose
   • A “Balanced Scorecard” can help guide efforts
   • Common areas for metrics and benchmarking:
     • Sales: Pipeline, Closed Business, Account Management
     • Customer: Satisfaction/Engagement, NPS, Retention
     • Market: Market Share, Share Growth, Brand
     • Financial: Revenue, Operating Profit, Return on Equity
     • People: Retention of Key People, Capabilities/Training, Ability to Attract Talent
     • Solutions: Quality, Innovation, Can Produce It Cost Effectively
     • Service: Responsiveness, Customer Ratings, Understanding of Customers
     • Social: Community Service, Global/National Efforts, Sustainability
   • To successfully measure results, need to carefully:
     • Set the right metrics: Example, setting a metric to be customer service hold time may result in services reps answering every phone call quickly, taking names and phone numbers, and then hanging up. “Average Hold Time” decreased, but “Time to Resolution” worsened.
     • Properly interpret results: Communicating insights and context alongside numbers generally helps everyone make better decisions.
   • “To obtained balanced efforts, the objectives of all managers on all levels should be keyed to both short-range and long-range considerations.” - Peter Drucker
   • Best practices is for performance metrics to follow a balanced approach, with measures in the following categories:
     • Customer Perceptions
     • Financial Performance
     • Operations (efficiency and effectiveness measures)
     • Organizational knowledge and capabilities
     • Social contribution
5. What is our plan?
   • “A goal without a plan is just a wish.” - Antoine de Saint-Exupéry
   • A plan describes where the organization wants to be, how it intends to get there, and the resources required to be successful. It needs to fit reality as well.
   • A good plan includes the mission and vision of the company, its goals and objectives, strategy, activities and action steps
   • Financial portion of the plan shows how the company will profitably do what it says it will do.
   • Plans need to be effectively executed, so the specifics need to be understood and embraced by everyone in the organization.
     • Management practice involves building a team all moving in the same direction.
       

• The Five Most Important Questions illuminate the core nature of an organization
• It is important to define and know the purpose of the company because it guides decisions, actions, and behaviors, it motivates the workforce, and it helps align departments.
• The best way to determine what customers value is to ask your customers

Learn Best Practices from The Financial Times

• Financial Times (FT), originally a newspaper, was founded more than 120 years ago and has thrived due to its management’s willingness to revisit the most important questions, ensuring its resources are aligned with its mission.
  • Advent of the internet was very disruptive to the core economics of its business model
• FT’s answer to the five questions:
  • Purpose? Provide high value financial and economic news, analysis, expert opinion
  • Customer? Organizations and individuals involved in banking, finance, wealth management, economics, politics, governance, policymaking, advertising
  • Customers' value? Timely, accurate financial and economic info, in digestible format, accessible across mediums
  • Our Results? a number of pillars, including: customers, financial, operations, organizational capabilities, social responsibility
  • Plan? implement Salesforce to drive greater customer growth, satisfaction, retention
• More articulated plan with Salesforce solution
  • Develop a deep understanding of who customers are, what they value: Sales Cloud/Marketing Cloud
  • Improve ability to service and retain customers: Service Cloud
  • Engage customers on a continuous basis to develop relationships and insights: Marketing Cloud / Social Studio
  • Improve economics to fit new business reality. Many of FT’s systems have been moved from legacy platforms into Salesforce, including contracts, directories, IT help desk, order management: Salesforce Platform
• Result? FT went through the process, now digital subscribers exceed global print circulation.
  • FT’s approach to success: “It all comes back to putting the customer at the heart of what we do.” - FT CIO Christina Scott
    
    
• First thing to do to survive and thrive in a changing market: Examined their core purpose to see if it had changed.
• To generate critical insights, FT’s second thing to do: Examine who customers were, what they valued
• When FT decided to engage on social media, they used Marketing Cloud

Apply the Five Questions

• Another example, for “Davidson Medical Supply Center:”
  • Purpose? Ensure health care providers have supplies needed to improve patients' lives
  • Customer? Heath care providers in Columbus Ohio
  • Customers' value? Reliable source of solutions that are safe, effective, affordable, easy to deliver, manage, and use
  • Our Results and Plan (question 4 and 5):

• Next, after identifying the areas that the admin believes Salesforce can help with, her next step is to prioritize the work that will contribute the most value
• Link to Drucker school diagnostic tools
  
  
• If purpose of a company is not clear, should look at an existing vision or mission statement
• What should you do if there is no defined organizational plan? Observe and listen to executive teams' priorities
• Next steps for an admin after completing the above:
  1. Learn more about organizational purpose, and vision or mission statements
  2. Research techniques for customer segmentation, understanding what customers value
  3. Learn more about performance metrics that drive results

Identify the Top Five Things Salesforce Admins Can Do

• Answering the “Five Most Important Questions” requires participation across the organization. But, Salesforce admins have a bigger role to pay than most.
  • Following defines how admins fit into answering the Five Questions

1. Determining Salesforce contribution to purpose
   • This question… What is our purpose?
   • Helps the organization… Develop its vision and mission to guide decisions, align resources, motivate individuals
   • Admins contribute by… Making sure key performance indicators (KPIs) on reports and dashboards align with the mission
   • Emphasizing these Salesforce solutions… Sales Cloud, Reports and Dashboards
2. Enabling Effective View of Customers
   • This question… Who is our customer?
   • Helps the organization… Clearly understand who the customers are and how they change over time
   • Admins contribute by… making sure customer info is usable and can be analyzed to determine customer characteristics
   • Emphasizing these Salesforce solutions… Sales Cloud, Marketing Cloud / Social Studio, Service Cloud
3. Ensuring Systems That Capture Customer Value
   • This question… What does the customer value?
   • Helps the organization… Understand exactly what the customers value so the company can provide it
   • Admins contribute by… Enable analysis of customer info that indicates what they value. Ex: purchase histories, survey feedback, social media listening
   • Emphasizing these Salesforce solutions… Sales Cloud, Marketing Cloud / Social Studio, Service Cloud, Reports and Dashboards, Einstein Analytics
4. Providing Measures to Track Key Results
   • This question… What are our results?
   • Helps the organization… Establish balanced performance measures to understand how well its meeting its purpose, vision, and mission
   • Admins contribute by… Generating reports and dashboards to enable effective decision making
   • Emphasizing these Salesforce solutions… Reports and Dashboards, Einstein Analytics
5. Incorporating Salesforce in the Plan
   • This question… What is our plan?
   • Helps the organization… Define what needs to be accomplished to meet its mission, deliver value, and achieve results
   • Admins contribute by… Making sure the system plan supports your organization’s strategic plans, so you are not reacting to changes. Seeking to enable the plan by knowing Salesforce solution capabilities that can enable initiatives.
   • Emphasizing these Salesforce solutions… Sales Cloud, Marketing Cloud, Service Cloud, Community Cloud, Social Studio, Chatter, Einstein Analytics, Salesforce Mobile App, AppExchange, Process Builder, Desk.com, Data.com

If you do not have a good systems plan, then you are reacting to the demands of managers instead of helping to drive the changes

• Admins play a key role in helping the executive team think through the questions by gathering information about customers and what they value
• Admins play an important rol in understanding customers' values by managing the customer information in the system
• Admins help their companies achieve management effectiveness by:
  • Staying up to date on the latest Salesforce capabilities
  • Acting as an internal subject matter expert on how Salesforce can be expanded to drive performance
  • Understanding and communicating how other companies use Salesforce to drive success