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An Institution Which Is Financed By A Budget - Or Which Enjoys A Monopoly Which The Customer Cannot Escape - Is Rewarded For What It Deserves Rather Than What It Earns. It Is Paid For 'good Intentions' And 'programs'. It Is Paid For Not Alienating Important Constituents Rather Than Satisfying Any One Group. It Is Misdirected By The Way It Is Being Paid Into Defining Performance And Results As What Will Produce The Budget Rather Than As What Will Produce Contribution.

-Peter Drucker

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An Institution Which Is

Peter Drucker

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An Institution Which Is Financed By A Budget - Or Which Enjoys A Monopoly Which The Customer Cannot Escape - Is Rewarded For What It Deserves Rather Than What It Earns. It Is Paid For 'good Intentions' And 'programs'. It Is Paid For Not Alienating Important Constituents Rather Than Satisfying Any One Group. It Is Misdirected By The Way It Is Being Paid Into Defining Performance And Results As What Will Produce The Budget Rather Than As What Will Produce Contribution.

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One Either Meets Or One Works.

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Erroneous Assumptions Can Be Disastrous.

Conductors Do Not Know How The Oboe Does Its Work, But They Know What The Oboe Should Contribute.

We Can Say With Certainty - Or 90% Probability - That The New Industries That Are About To Be Born Will Have Nothing To Do With Information.

One Does Not Start With Facts. One Starts With Opinions.

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In The Political, The Social, The Economic, Even The Cultural Sphere, The Revolutions Of Our Time Have Been Revolutions "against" Rather Than Revolutions "for"... On The Whole Throughout This Period The Man--or Party--that Stood For Doing The Positive Has Usually Cut A Pathetic Figure; Well Meaning But Ineffectual, Civilized But Unrealistic, He Was Suspect Alike To [by Both] The Ultras Of Destruction And The Ultras Of Preservation And Restoration.

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Knowledge Workers

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People Alone Of All The Resources Can Grow And Develop.

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Trees Die From The Top”. No One Should Ever Become A Strategist Unless He Or She Is Willing To Have His Or Her Character Serve As A Model For Subordinates

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Vision Without Execution Is Delusion. The Joy Is In The Results

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Every Organization Has To Prepare For The Abandonment Of Everything It Does.

Results Is All That Separates One Company From Another.

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Don't Solve Problems. Pursue Opportunities.

Making Changes To Better Appeal To Customer Is Innovation.

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The Society Of Organizations Is New-only Seventy Years Ago Employees Were A Small Minority In Every Society.

A Primary Task Of Management In The Developed Countries In The Decades Ahead Will Be To Make Knowledge Productive.

Of Those Things That Would Make A Difference, Which Are Right For Me?

Making A Difference

No Institution Can Possibly Survive If It Needs Geniuses Or Supermen To Manage It. It Must Be Organized In Such A Way As To Be Able To Get Along Under A Leadership Composed Of Average Human Beings.

An Institution Which Is Financed By A Budget - Or Which Enjoys A Monopoly Which The Customer Cannot Escape - Is Rewarded For What It Deserves Rather Than What It Earns. It Is Paid For 'good Intentions' And 'programs'. It Is Paid For Not Alienating Important Constituents Rather Than Satisfying Any One Group. It Is Misdirected By The Way It Is Being Paid Into Defining Performance And Results As What Will Produce The Budget Rather Than As What Will Produce Contribution.

Any Time I Have Seen Someone Accomplishing Something Magnificent, They Have Been A Monomaniac With A Mission. A Single-minded Individual With A Passion.

Do Not Measure Your Life By Your Goals But What You Are Doing To Achieve Them.

Promotion Should Not Be More Important Than Accomplishment, Or Avoiding Instability More Important Than Taking The Right Risk.

Profit Is Not The Purpose Of A Business, But Rather The Test Of Its Validity

We Know Nothing About Motivation. All We Can Do Is Write Books About It.

As A Rule We Perceive What We Expect To Perceive... The Unexpected Is Usually Not Received At All.

Look At Government Programs For The Past Fifty Years. Every Single One - Except Warfare - Achieved The Exact Opposite Of Its Announced Goal.

Strategic Planning Is The Continuous Process Of Making Present Entrepreneurial (risk-taking) Decisions Systematically And With The Greatest Knowledge Of Their Futurity; Organizing Systematically The Efforts Needed To Carry Out These Decisions; And Measuring The Results Of These Decisions Against The Expectations Through Organized, Systematic Feedback.

Quality Of Character Doesn't Make A Leader, But The Lack Of It Flaws The Entire Process.

One Reason For The Tremendous Increase In Health-care Costs In The U.s. Is Managerial Neglect Of The "hotel Services" By The People Who Dominate The Hospital, Such As Doctors And Nurses.

The Successful Person Places More Attention On Doing The Right Thing Rather Than Doing Things Right.

No Executive Has Ever Suffered Because His Subordinates Were Strong And Effective.

Information Is The Manager's Main Tool, Indeed The Manager's Capital, And It Is He Who Must Decide What Information He Needs And How To Use It.

Institutions Mistake Good Intentions For Objectives. They Say "health Care"; That's An Intention, Not An Objective.

Good Intentions

True Marketing Starts...with The Customer, His Demographics, His Realities, His Needs, His Values. It Does Not Ask, "what Do We Want To Sell?" It Asks, "what Does The Customer Want To Buy?"

It's More Important To Do The Right Thing Than To Do Things Right.

In The Next Economic Downturn There Will Be An Outbreak Of Bitterness And Contempt For The Supercorporate Chieftains Who Pay Themselves Millions. In Every Major Economic Downturn In Us History The Villains Have Been The Heroes During The Preceding Boom.

The Real Development I've Seen Of People In Organizations, Especially In Big Ones, Comes From Their Being Volunteers In A Nonprofit Organization - Where You Have Responsibility, You See Results, And You Quickly Learn What Your Values Are. There Is No Better Way To Understand Your Strengths And Discover Where You Belong Than To Volunteer In A Nonprofit. That Is Probably The Great Opportunity For The Social Sector - And Especially In Its Relationship To Business.

Luck Never Built A Business. Prosperity And Growth Come Only To The Business That Systematically Finds And Exploits Its Potential.

There Is One Qualification The Manager Cannot Acquire But Must Bring To The Task. It Is Not Genius; It Is Character.

For New Technology To Replace Old, It Has To Have At Least Ten Times The Benefit.

Innovation Is The Specific Tool Of Entrepreneurs, The Means By Which They Exploit Change As An Opportunity For A Different Business Or A Different Service.

To Make Knowledge Productive, We Will Have To Learn To See Both Forest And Tree. We Will Have To Learn To Connect.

The Best Plan Is Only A Plan... Unless It Degerates Into Work.

Managing Innovation Will Increasingly Become A Challenge To Management, And Especially To Top Management, And A Touchstone Of Its Competence.

[entrepreneurship] Is By No Means Hunch Or Gamble. But It Also Is Not Precisely Science. Rather, It Is Judgment.

Entrepreneurship

You Cannot Predict The Future, But You Can Create It.

Communication Is Always "propaganda." The Emitter Always Wants "to Get Something Across."

In A Rural Society Communities Are "given" For The Individual. Community Is A Fact, Whether Family Or Religion, Social Class Or Caste.

Because Its Purpose Is To Create A Customer, The Business Enterprise Has Two - And Only These Two — Basic Functions: Marketing And Innovation. Marketing And Innovation Produce Results; All The Rest Are 'costs'.

In The Managerial Organization, The Top People Sit In Judgment; In The Innovative Organization It Is Their Job To Encourage Ideas, No Matter How Unripe Or Crude.

In Business School Classrooms They Construct Wonderful Models Of A Non- World.

For The First Four Years, No New Enterprise Produces Profits. Even Mozart Didn't Start Writing Music Until He Was Four.

Successful Careers Are Not Planned. They Develop When People Are Prepared For Opportunities Because They Know Their Strengths, Their Method Of Work, And Their Values. Knowing Where One Belongs Can Transform An Ordinary Person - Hardworking And Competent But Otherwise Mediocre - Into An Outstanding Performer.

Time Is The Scarcest Resource And Unless It Is Managed Nothing Else Can Be Managed.

Charisma Becomes The Undoing Of Leaders. It Makes Them Inflexible, Convinced Of Their Own Infallibility, Unable To Change

Objectives Are Not Commands; They Are Commitments.

No Other Area Offers Richer Opportunities For Successful Innovation Than The Unexpected Success.

Successful Leaders Don't Start Out Asking, 'what Do I Want To Do?' They Ask, 'what Needs To Be Done?' Then They Ask, 'of Those Things That Would Make A Difference, Which Are Right For Me?'

Successful People Know They Need To Get Many Things Done-and Done Effectively. Therefore, They Concentrate Their Time And Energy On Doing One Thing At A Time-and On Doing First Things Firs.

To Be A Manager Requires More Than A Title, A Big Office, And Other Outward Symbols Of Rank. It Requires Competence And Performance Of A High Order.

The Paradox Of The Prophet: His Very Success Is His Failure. The Prophet Whose Time Has Come No Longer Shocks; He Entertains.

The Leader Sees Leadership As Responsibility Rather Than As Rank And Privilege.

"value Added" Is A Meaningless Concept For A Retail Business , For A Bank, For A Life Insurance Company, And For Any Other Business Which Is Not Primarily Engaged In Manufacturing.

Insurance Companies

Profit For A Company Is Like Oxygen For A Person. If You Don't Have Enough Of It, You're Out Of The Game. But If You Think Your Life Is About Breathing, You're Really Missing Something.

To Satisfy The Customer Is The Mission And Purpose Of Every Business.

Leadership Is All Hype. We've Had Three Great Leaders In This Century-hitler, Stalin, And Mao.

Results Are Obtained By Exploiting Opportunities, Not By Solving Problems.

Production Is Not The Application Of Tools To Materials, But Logic To Work.

Few Companies That Installed Computers To Reduce The Employment Of Clerks Have Realized Their Expectations... They Now Need More, And More Expensive Clerks Even Though They Call Them 'operators' Or 'programmers.'

(waste = Loss): The First Rule Of Business Is To Survive And The Guiding Principle Of Business Economics Is Not The Maximisation Of Profit, It Is The Avoidance Of Loss

Guiding Principles

The Only Things That Evolve By Themselves In An Organization Are Disorder, Friction And Malperformance.

There Are Only Two Things In A Business That Make Money - Innovation And Marketing, Everything Else Is Cost.

The Essence Of Management Is To Make Knowledge Productive.

Nobody In The World Is As Good At Making Decisions As The Japanese.

Making Decisions

There Are Usually Half A Dozen Right Answers To What Needs To Be Done. Yet, Unless A Person Makes The Risky And Controversial Choice Of Only One, He Will Achieve Nothing.

The More Successful The Unit, The More Difficult It Is To Make Sure That The Large Company Doesn't Put The Same Expectations On It As It Does For The Rest Of The Company. When It's A New Venture, Whether It's Outside Or Inside The Business, It's A Child. And You Don't Put A 40-pound Pack On A 6-year-old's Back When You Take Her Hiking.

Entrepreneurship Rests On A Theory Of Economy And Society. The Theory Sees Change As Normal And Indeed As Healthy. And It Sees The Major Task In Society – And Especially In The Economy – As Doing Something Different Rather Than Doing Better What Is Already Being Done. This Is Basically What Say, Two Hundred Years Ago, Meant When He Coined The Term Entrepreneur.

You Cannot Prevent A Major Catastrophe, But You Can Build An Organization That Is Battle-ready, Where People Trust One Another. In Military Training, The First Rule Is To Instill Soldiers With Trust In Their Officers - Because Without Trust, They Won't Fight.

Executives Owe It To The Organization And To Their Fellow Workers Not To Tolerate Nonperforming Individuals In Important Jobs.

Ideas Are Like Frog Eggs: You've Got To Lay A Thousand To Hatch One.

Understanding Our Strengths, Articulating Our Values, Knowing Where We Belong -- These Are Also Essential To Addressing One Of The Great Challenges Of Organizations: Improving The Abysmally Low Productivity Of Knowledge Workers.

Mission Defines Strategy, And Strategy Defines Structure.

It's Amazing How Many Things Busy People Are Doing That Never Will Be Missed.

In Book Subjects A Student Can Only Do A Student's Work. All That Can Be Measured Is How Well He Learns, Rather Than How Well He Performs. All He Can Show Is Promise.

Morale In An Organization Does Not Mean That "people Get Along Together"; The Test Is Performance Not Conformance.

Inside An Organization There Are Only Cost Centers. The Only Profit Center Is A Customer Whose Check Has Not Bounced.

What You Have To Do And The Way You Have To Do It Is Incredibly Simple. Whether You Are Willing To Do It Is Another Matter.

Will And Determination

We Spend A Lot Of Time Teaching Leaders What To Do. We Don't Spend Enough Time Teaching Leaders What To Stop. Half The Leaders I Have Met Don't Need To Learn What To Do. They Need To Learn What To Stop

The Company Is Not And Must Never Claim To Be Home, Family, Religion, Life Or Fate For The Individual. It Must Never Interfere In His Private Life Or His Citizenship. He Is Tied To The Company Through A Voluntary And Cancellable Employment Contract, Not Through Some Mystical Or Indissoluble Bond.

Knowledge Has Become The Key Resource Of The World Economy.

All Earlier Pluralist Societies Destroyed Themselves Because No One Took Care Of The Common Good. They Abounded In Communities But Could Not Sustain Community, Let Alone Create It.

The Corporation Is The "master", The Employee Is The "servant". Because The Corporation Owns The Means Of Production Without Which The Employee Could Not Make A Living, The Employee Needs The Corporation More Than Vice Versa.

Everything Must Degenerate Into Work If Anything Is To Happen.

Whenever Anything Is Being Accomplished, It Is Being Done, I Have Learned, By A Monomaniac With A Mission.

There's No Such Thing As Knowledge Management; There Are Only Knowledgeable People. Information Only Becomes Knowledge In The Hands Of Someone Who Knows What To Do With It.

The Entrepreneur Always Searches For Change, Responds To It, And Exploits It As An Opportunity.

The Person Who Will Make The Greatest Contribution To A Company Is The Mature Person-and You Cannot Have Maturity If You Have No Life Or Interest Outside The Job.

There Is Every Indication That The Period Ahead Will Be An Innovative One, One Of Rapid Change In Technology , Society , Economy , And Institutions .

The Greatest Change In Corporate Culture - And The Way Business Is Being Conducted - May Be The Accelerated Growth Of Relationships Based... On Partnership.

Accept The Fact That We Have To Treat Almost Anybody As A Volunteer.

The Building Of A Personality Beyond Its Normal Limitations.

We've Spent The Last 30 Years Focusing On The T In It, And We'll Spend The Next 30 Years Focusing On The I.

The Arts Alone Give Direct Access To Experience. To Eliminate Them From Education - Or Worse, To Tolerate Them As Cultural Ornaments - Is Antieducational Obscurantism. It Is Foisted On Us By The Pedants And Snobs Of Hellenistic Greece Who Considered Artistic Performance Fit Only For Slaves.

The Single Most Important Thing To Remember About Any Enterprise Is That There Are No Results Inside Its Walls. The Result Of A Business Is A Satisfied Customer.

Innovation Is The Specific Instrument Of Entrepreneurship. The Act That Endows Resources With A New Capacity To Create Wealth.

The Single Most Important Thing To Remember About Any Enterprise Is That Results Exist Only On The Outside.the Result Of A Business Is A Satisfied Customer. The Result Of A Hospital Is A Satisfied Patient. The Result Of A School Is A Student Who Has Learned Something And Puts It To Work Ten Years Later. Inside An Enterprise There Are Only Costs.

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