Peter Drucker’s Five-Question Leadership Model
Peter Drucker’s five-question leadership framework is a tool for organizational self-assessment.
By answering these questions, the organization and its leaders must define what they are doing, why they are doing it, and what they need to do to improve performance to ensure the vitality and success of the organization.
Based on Peter Drucker’s Five Most Important Questions, I discuss a value-based leadership model centred on essential, yet simple evaluation areas.
Leadership Model Q1: What is your mission?
An organization’s mission is its purpose and reason for existing, and it is the leader’s purpose and responsibility to ensure all members of the organization know, understand, and follow the mission. An effective mission statement should be broad and directive, yet concise and focused. It should pinpoint the why of what the organization aims to do, rather than endeavor to explain how its members will accomplish that vision.
Every member of the organization should be able to see how what they are doing contributes to the goal.
Drucker cautions that a leader should never do anything that threatens the organization’s overall integrity. Never accept profit, reputation, or compromised conditions that discredit the organization’s core values.
Focus on the central question: What is your mission? It is a constant tug of war between ensuring continuity and reacting to change, preserving the core while making progress for the future.
The mission is the one piece of the organization that should remain constant while the operating practices, strategies, processes, and structures continuously respond to
both internal and external change.
Leadership Model Q2: Who is your customer?
To identify your customer most effectively, Drucker recommends asking yourself a simple, direct question: Who must be satisfied for the organization to achieve results? The answer to this question defines who most values your services and wants what you have to offer.
According to Drucker, there are always primary customers and supporting customers. The primary customer is the one whose life is changed through the organization’s services, while supporting customers are those who must also be satisfied, but have the freedom to accept or reject what you offer. This is especially true for social or nonprofit organizations. Identifying your primary as opposed to your supporting customers can help the organization to prioritize and make critical decisions.
Keep in mind that customers will always evolve. They may increase or decrease in number, become more diverse, or their needs, wants, and desires might shift.
Defining your customer is the starting point for determining what they value and clarifying your plan to achieve results. You must be prepared to adjust and pivot to their needs.
Leadership Model Q3: What does your customer value?
Answering the question – what a customer values, without direct input from the customer is a recipe for disaster. The answer to this question is so complex that it is best to directly ask the customers themselves. According to Drucker, there are no irrational customers. Customers always act rationally based on the circumstances of their own realities.
Drucker recommends gathering the answers to what customers value in a systematic way.
Even if you make assumptions based on what customers might want, be sure to compare those assumptions against what your research shows they actually desire. Identify the differences, and make adjustments accordingly.
Distinguishing between what primary and supporting customers value is also important. The primary customer’s stake in the organization is greatest. Listening to what these customers value and aligning the organization’s decisions to those desires not only increases customer satisfaction, but also contributes to the organization’s results and overall success.
Supporting customers should also be satisfied. They still gain value from what the organization offers, even though they are not the primary targets. Seek customer input thoroughly and as often as possible to continually ensure the organization is meeting the needs of its stakeholders.
Overall, customers will value an organization that actively asks for their feedback and is open and able to solve their problems and fill their needs.
Leadership Model Q4: What are your results?
Social sector organizations measure results based on external changes—changed lives, conditions, behaviors, health status, or other circumstances. Regardless of the type of product or service, all organizations exist to produce outcomes.
Failure to critically evaluate these outcomes puts an organization in jeopardy, and can lead to misunderstood assumptions and potential collapse.
Your achievement can be measured in both qualitative and quantitative ways. Qualitative measures address the depth of change within its particular context, while quantitative measures focus on defined standards.
You must also step back and assess what measures are sufficient and which need to be strengthened or redefined to align with your mission.
As a leader, you are accountable if your organization as a whole is not performing satisfactorily to meet customer needs. You must determine what needs to change to ensure the success of the organization and where to concentrate for future, meaningful growth.
Leadership Model Q5: What is your plan?
The final step of Drucker’s self-assessment process is to formulate your organization’s plan. A good plan should transform your intentions into action.
It should incorporate the mission, vision, goals, objectives, action steps, and budget. This is your opportunity to validate or redefine your mission statement and set your long-term goals.
A mission statement and goals are fundamental to a social or nonprofit organization, and are required strategic elements.
To inform the mission, you must have action steps not only for today but also specific intentions for the future.
The future is uncertain and you may need to make adjustments based on how your customers evolve with the changing landscape of their individual and shared environments.
Your objectives should be specific and measurable, and they should propel the organization toward its goals. The action steps will then create accountability for those objectives and establish who will do what bywhen.
The budget then commits the resources needed to take those actionable steps. Drucker recommends that the action steps be developed by the members of the organization who will carry them out. Everyone with a role should be given the opportunity to provide input. This builds understanding and a sense of ownership in the organization and its plan.
The last step in formulating a plan is the appraisal, which should be continuous for the life of the organization. The organization, specifically its leaders, should monitor its progress in meeting goals and objectives, and how it measures results.
When conditions change or results are insufficient, you must make adjustments to the plan. As a leader, self- assessment is never truly done. Leadership requires constant evaluating, refining, and refocusing based on changing circumstances.
Conclusion
These five defining questions require leaders to assess their mission, identify their customers and their values, define their results, and outline a plan. The process of self-assessment lays the groundwork for building success—leading to clear, actionable, and value-based steps that teach you the skills, concentration, and commitment to guide the organization through transformative change and towards a successful future.
“True self-assessment is never finished. Leadership requires constant resharpening, refocusing, and never really being satisfied. I encourage you especially to to keep asking the question: What do we want to be remembered for? It is a question intended for you to renew yourself—and the organization—because it pushes you to see what you can become.”
– Drucker
