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Principles of Professional Leadership

Principles of Professional Leadership

Week 11, Dated 11.11.21

This week on Peter F Drucker’s leadership coaching we will focus on Senior leadership especially around the Governance and Board of Directors

Drucker also had great difficulty, which he never overcame, with what he believed were nonperforming boards of directors in business. In a powerful early article published in the Wharton Magazine (1976), there is a tongue-in-cheek advertisement that he wrote, recruiting a board member for a private corporation : Major Multibillion dollar corporation seeks professional member on board of directors. We have a job enrichment plan to convert position from rubberstamping to active policy making. Requires 40–50 days per year intensive work. Salary high. Rare opportunity. Corporation Presidents and attorneys need not apply. Though most of the boards fail to perform, he thought for-profit corporations could learn a lot from functioning boards of certain social sector organizations

Leadership Principles (for CEO and the Board)

Peter puts the following principles for every form of leadership for its effective functioning


  • A leader sets the vision and sees what can be done, the opportunities for the organization.
  • Defining mission is one of the most difficult things organizations have to do. The obvious answer is usually wrong. A common tendency is to develop a statement that looks good, but is not operational. It becomes a motto mission.
  • A leader makes the fit between resources and needs, bringing those together, like a tailor . . . making a suit.
  • A leader takes responsibility, willingly absorbs criticism, and accepts the loneliness of command.
  • Decision-making is central to the role of the leader. Decision-making takes courage as well as intelligence. Not everyone is constituted to make tough decisions. But everyone can learn effectiveness for her position.
  • Popularity is not a criterion for leadership. Nor is a charismatic personality.
  • A leader must sometimes infuse conflict / create controversy to prevent satisfaction and a bureaucratic mindset from setting into an organization.
  • The [CEOs are] responsible for making their boards effective.

Charisma is “hot” today. There is an enormous amount of talk about it, and an enormous number of books are written on the charismatic leader. But the desire for charisma is a political death wish. No century has seen more leaders with more charisma than the twentieth century, and never have political leaders done greater damage than the four giant leaders of the twentieth century—Stalin, Mussolini, Hitler, and Mao. What matters is not charisma. What matters is [that] the leader leads in the right direction. If they don’t do this they misleads.

The constructive achievements of the twentieth century were the work of completely uncharismatic people. The two military men who guided the Allies to victory in World War II were Dwight Eisenhower and George Marshall. Both were highly disciplined, highly competent, and deadly dull.

Decision making

The most important function of the executive is decision making. Effective leaders and executives make effective decisions. They follow a disciplined process, first defining the problem they face. If the problem is not defined properly, there is no way to tell if a decision move one closer to a solution to the real problem. The situation is similar to that of a physician who is trained in diagnosis. If he or she diagnoses a problem incorrectly, the prescribed remedy will fail to cure the patient, and the physician will not learn anything from the process. The feedback from diagnosis to results does not provide any help in getting closer to the cure. If the problem is diagnosed correctly, and the treatment comes up short, then the physician knows what won’t work and goes on to another alternative that moves closer to a cure. Learning takes place. For this reason, Drucker insisted that executives first correctly define the problem they are facing. Once the problem is defined correctly, the next step is to establish the boundary conditions the decision has to meet. For a decision to be an effective decision, what purposes must it fulfill, and what is the range within which acceptable solutions must fall?

Every decision must satisfy the boundary conditions if it is to be effective. It must be adequate to its purpose. It should answer the following vital questions :

  • What must this decision accomplish?
  • What objectives must the decision achieve?


There are actually three different tasks for which a company, and especially a large one, needs a functioning board.


First : Every enterprise, Does Need a Review Body It needs a group of experienced people, people of integrity and stature, people of proven performance capacity and proven willingness to work, who counsel and advise and deliberate with top management. It needs people who are not part of top management but who are available to it, and who can act with knowledge and decision in a crisis.


  • Somebody has to make sure that top management thinks through what the company’s business is and what it should be.
  • Somebody must make sure that objectives are being set and strategies are being developed. Somebody has to look critically at the planning of the company, its capital-investment policy, and its managed-expenditures budget.
  • Somebody has to watch the organization’s spirit, has to make
  •  sure that it succeeds in utilizing the strengths of people and in neutralizing their weaknesses, that it develops tomorrow’s managers and that its rewards to managers, its management tools and management methods strengthen the organization and direct it towards objectives.
  • It is an informed, intelligent outsider to talk and confer with. Having someone to talk to is especially important in a small company where top management otherwise tends to be isolated.

Second, An Effective and Functioning Board Is Needed to Remove a Top Management That Fails to Perform A board capable of removing incompetent or nonperforming top managements has real power. But only a weak top management is afraid of it. No society can tolerate top-management incompetence in its large businesses. If top managements do not build boards that will remove weak and incompetent chief executives, government will take over the job

Third, The Enterprise Needs a “Public and Community Relations” Organ It needs easy and direct access to its various “publics” and “constituents.” It needs to hear from them and to be able to talk to them. The need is readily apparent for the big company, of course. But it may be even greater for the small or fair-sized company which is a major employer in a small or medium-sized community.

In today’s context, the term stakeholders represent the broader community that every enterprise should be mindful of. There are consumers, suppliers, and distributors, and public at large. All of them need to know what goes on in a major business, what its problems, its policies, and its plans are. The business needs to be understood by them. Top management needs to be known by them, respected by them, accepted by them. Top management needs even more, perhaps, to understand what these constituencies want, understand, misunderstand, see, question. A board involving these different constituencies could serve this two-way public relations need.


  1. Is the mission of your organization both clear and operational?
  2. What resources and competencies does your organization possess?
  3. Do these resources and competencies match the opportunities available to your organization? If not, what resources and competencies must you acquire or develop to capitalize on these opportunities?
  4. Do you overvalue charisma rather than the right results in your leaders?
  5. Do you avoid hard decisions in order to be popular?
  6. Do you follow the procedures for effective decision-making process?
  7. Do you readily assume responsibility for your people as well as for results in your organization? If not, why not?
  8. Do you have a well-functioning board that serves the mission and stakeholders of your institution?

Adapted from: Maciariello, Joseph A. A Year with Peter Drucker (pp. 91-92). Harper Business. Kindle Edition.





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