Clay Christensen
episode 39
We visit another titan of innovation on this show - Clay Christensen. He has written many books on and around the topic of innovation and is a Harvard Business School Professor. His most significant contribution is his theory of "disruptive innovation" - considered the most influential business idea of the early 21st century.
SHOW CLIPS
Disruptive Innovation Explainer
The Process Of Innovation And How Companies Kill It
Innovating While You Are Strong, Don’t Delay
Two Sides Of Disruption - Threat And Opportunity
Disruption isn’t Tech but Business Model
Examples of Disruptive Innovations
A Case Study For The Profit Formula Of Innovation - Walmart And Retail
Facebook And Google Are Not Innovation Companies
Tesla isn't Disruptive
Toyota vs Detroit
BOOK LINKS
How Will You Measure Your Life?
TRANSCRIPT
Hello and welcome to the moonshots podcast. It is episode 40. Yes, the big four zero. I'm your co-host Mike Parsons. And as always I'm joined by Chatto and from Brooklyn. Good evening. Good morning, Mike, how are you? Yes, it's a beautiful spring day here in Sydney. Um, is it a sort of, uh, uh, dry, wet and rainy here really already?
Yeah, it's, uh, we kind of skipped over some of the nice fall and just went, went straight to rain. Wow. Wow. Well that sounds, that sounds like some tough work after a hot humid summer, but I tell you what something that's also pretty Epic in the world is the subject of this show. This is like a granddaddy of a show.
Chad Owen. Yeah. We haven't quite gone this far back into a history yet. I don't think on this show into the archives is they say, yeah, Yeah. We've only had a few people on the show that that are no longer with us. And today's today's subject. Peter Drucker is he's been around since the thirties and forties espousing wisdom on innovation entrepreneurship.
He's kind of literally written the books on management. I think it's close to like. Or is it 40 bucks or 50 bucks? I think there's 39. The scale of his work is enormous. Many of his articles that he wrote for the Harvard business review are in there have sort of reached the hall of fame. If you will, for the Harvard business review, he, uh, he has, uh, Business schools named after him.
He, uh, is considered, uh, the inventor of the, of the concept of management. Uh, he created the idea of the knowledge worker, the very famous saying first things first. I mean, how, I mean, isn't this ridiculous, this guy is like the source, if you will. Yeah, it was really fun. To go back and revisit some of his books that I had been turned on to, you know, when I was just kind of starting my entrepreneurial journey and I kept flipping back to the front of the book to be like, when was this written?
Because it's still so prescient and applicable. Um, even, you know, the things that he wrote. In in, in the eighties. Yeah, he was prolific. Um, and you know, obviously people appreciated what he had to say because actually in 2002, he was awarded the presidential medal of freedom in the U S like, that is the highest civilian honor you can receive, you know, other than, you know, you need to actually be in the military to get any higher than that.
I mean, he, this guy is. Profound in what he wrote in how he thought. And the crazy thing is that despite, you know, his famous book, probably his most famous book, which was written in 66 called the effective executive much of what he wrote is massively relevant. Today. Um, and he, he was the guy who came up with the idea of the knowledge worker, which is essentially moving from the industrial age to the information age, and that it's all going to be about knowledge and creativity.
And as a result of that, he said, organizations are going to need to priority prioritize. April does that starting to sound familiar if you listen to any modern leader, it's, it's about the people. And the crazy thing is Chad. He even called, you know, what we see in Tom's Warby Parker and all of these mission driven companies.
He was foreseeing this decades ago that not only do companies need to put people at the center, they need to put. Purpose at the center said it's in his 1985 book innovation and entrepreneurship. Like I was just reading that. It's like, wait a minute. But, but, but this is how, the, the clarity of, by which he understood how teams.
In companies work is in, is so incredibly profound. And I think we have to be honest that not many companies have truly succeeded in the areas in which he wrote about, which is why we chose to do a show on Peter Drucker, because I think people are still struggling with concepts of. How to invest in talent, how to have a purpose, uh, how to increase knowledge, how to increasing engagement with staff.
Like all of these things are top of the list today, even though he wrote about them 40, 50 years ago. Mm yeah. And this is kind of not even acknowledging his, his personal life story of. Living in Germany at the turn of the century and dealing with the Weimar Republic and the rise of national socialism and the Nazi party, which brought him to England and eventually the States.
And another interesting thing, especially as we get into this authors series, it's fascinating to me to begin to turn our attention to people. They spent most of their careers actually kind of outside of business so that they can take a slightly different perspective. Now, like he, you know, he did a lot of consulting.
Inside of general motors. And that's kind of where his first famous book, the co one, is it a concept concept of the corporation, right? Where he essentially embedded himself for two years to learn how general motors operated. And I think that's kind of what birthed his theory of management and then kind of from there, NYU.
Saw how valuable his, his knowledge was. And they had him for over 20 years teaching in their business school. And then he had went to California, essentially kind of found his own, uh, NBA program. You, and that's where the schools are named after him. It's really, I've really enjoyed, kind of taking a more academic look at entrepreneurship and innovation.
So I'm actually kind of excited to jump into the clips here. Yeah, me too. I think, uh, just a couple of quick thoughts just to, to help all of the listeners. First of all, if you want to follow up on any of the books or the links that we referenced in, there's going to be a lot in this episode because he was so prolific go to moonshots.io and you'll get the show notes, all the links, all the goodies.
Can listen to old shows, send us emails. Chad loves the emails, just whatever you want to do. Jump on to moonshots.io. Second thing is we have the curse of history when we do a study of Peter Drucker. And I think it's two fold. Number one. Um, a lot of the, the interviews and talks that he gave were done in a pre YouTube era.
So sourcing content was a little tricky. And the second thing. Chad is, he's got a very thick Austrian accent, so he's not the most easy to listen to and understand. So, uh, how should we set everyone up for how we've pulled these clips together, Chad? Well, I think Mike, you did a great job of sourcing clips that help.
Convey much of, kind of his biggest ideas, you know, from some of his more popular works, like the essential Drucker and the effective executive, you know, you and I are going to be talking about his book, innovation and entrepreneurship, kind of in our book review section. So yeah, this is kind of our disclaimer and like, we really wanted to bring you some great clips from the horse's mouth himself, but, you know, I think for ease of understanding and clarity, We've kind of pulled some contemporaries and people talking about him and reflecting on, on his work.
Yeah. All right. Well, why don't you, uh, let it rip, what's the first one you want to play for as check? Well, this is just a, you know, one of our typical intro clips, which is, you know, you've, you've heard of kind of like the four P's of marketing and whatnot. Well, Peter has his own, uh, concept called the four CS.
When you think about Peter is sort of like the babe Ruth and Ted Williams and baseball because of his longevity, his high standards, his sustained excellence. He was a giant in his field, a Renaissance man. He was more than I expected. More than I ever could have anticipated. He was a good man. You've probably heard of the poorest season diamonds.
Well, there are the four C's of Peter Drucker and these are the values and guiding principles that he considered important among others. Uh, one was competency. You have to have that. The other was character, compassion and community. Those are at the DNA effective organizations and effective leaders. The four CS, huh.
And what's so nice about those four CS is how you start to see Drucker has this deep focus on the Renaissance man or woman, the full row, the fully matured, uh, intuitive, empathetic, uh, leader. And this is a huge theme in his work. He really puts a focus on. Not only what you do, but how you work with the people around you, how you, how you hold yourself amongst your peers.
Um, and I think this starts to set up like a really exciting set of ideas from Drucker, but I kind of love the vintage classic nature. Of the, those four CS shared, I mean, it's so refreshing in this age of blockchain and artificial intelligence, this man wants people of character. Yeah. And really only one of those attributes is I think, tied to the bottom line of a business competency.
The other three character. Compassion and community get at culture w which, which is kind of the big C that's on top of all of those. And we have all these people so concerned with creating the right culture and fostering, fostering diverse and inclusive cultures. But, you know, here we have Peter looking inside a GM in the thirties and seeing, yep.
It's actually the culture that matters the most. And again, I think that's. I don't think that he came up with his theory of management just to improve business performance. I, I do think it is also to, as you're saying, really support the people and, and grow well-rounded, you know, people of character, if you will.
Yeah. Yeah. And, and this is, this is where everything comes full circle. It starts with people. And this next clip is, is really important because it starts to lay some of the, the. Key ideas that are behind, you know, the godfather of management, the godfather of the greatest books ever written that is still relevant now.
So let's have a listen now to this idea of how it's all about people. First, he, uh, left, left the lecture saying I didn't, I, I didn't hear anything, but, uh, from canes, but. Uh, things about commodities, particularly money. And I don't particularly care about money, which is interesting. Having written that, uh, you know, 36 management books, but, uh, I care about people.
And I think if I had to pick this, uh, the single one thing about, uh, Peter's whole career, it was about the interaction of people more than it was getting people rich. Hmm. So you, you realize he's just left a talk from John Maynard, Keynes him one of the greatest economists ever to have lived. And he's like, ah, that's all crap.
He never talked about people. He says talking about money and policy and drug is like, it's all about the people. I think that is so classically Drucker. He's confident in what he knows and what he thinks. But most importantly, he knows that everything starts. With people wouldn't you jab, wouldn't you say that when you look at great sports teams and great companies, you will often find that the culture that you talked about is led by this people.
First idea. There's some sort of culture and bond amongst men and women that when they're working in the right way, when people are heard and people are listened to when people are contributed and given the right sort of feedback. It's it's this idea of people first culture, isn't it, absolutely. Or a culture first organization.
And when one of my clients, you know, kind of has that as their, their motto. And most many of my other clients are very concerned and actively working towards, you know, fostering a co uh, putting culture first inside of their organizations. And you might think it's a new idea, but it's not, again, I think.
In many ways, Peter was ahead of his time in talking about this and it's kind of taken us 50 years plus to really process it and truly understand how important it is. And I think part of that is kind of tied to the business cycles that he talks about. You know, he, he kind of conceives of business cycles and like 50, 60 year.
Waves. And so, you know, for a long time, it was very much about efficiency and, you know, kind of like the, the last optimizations of the industrial age before we fully trend transformed into the, kind of the knowledge economies. Um, and so we're now kind of doing all this catch-up work to like, you know, repair the people side of the economics equation and not just make it so much about.
About money. And this is this, this gets us beautifully to this next thought around Drucker and his legacy and his work, which is, you know, look taking care of people is just the right thing to do. But when you do that, you can unlock enormous potential, not only in the people as individuals, but in teams and not only in teams building companies.
So let's have a listen now to some commentary on Drucker's thoughts around the power of people. In his 1946 book, which was the concept of the corporation that came out of the GM work. That the most durable organizations develop their people, both intellectually and morally. And that's focusing on strains that way.
Organizations really fly, focus on strength is a big deal and Drucker daddy deep for Peter because it comes out of his past. You know, he grew up in Austria, inside the Nazi potters. He saw what the Nazi philosophies did to people and, uh, he had a deep respect for. Individuals helping individuals to grow.
It was all very, very genuine. If you look at the classic, uh, economic view of, of, uh, of, uh, production or economic activity, right? You've got machines, you've got labor, you've got land, all that. Well, people are the only, actually the only infinitely expandable resource. So not only is it the right thing to do in terms of helping people grow.
For its own sake, but it turns out that it's a tremendous competitive advantage. If you can really unleash the power of people.
Yeah. It's, it's funny, you know, the point about people as kind of the infinitely expandable resource. So it's like, if you weren't already on kind of the bandwagon with him of like, yeah. You know, people are really important as well. Like just look at it, the machines aren't going to make the things themselves, at least not yet.
I mean, we're not quite there with AI and robotics, but you know, it's like, yeah, the, he's not saying it in, in kind of the trite way of, you know, Oh, well, people are our most important asset. I think that in many ways, I kind of hate that phrase because I don't think organizations actually. You know, they say that, but don't live it out.
Um, right. And if you need to say that, then you'd want to, it's like, trust me, trust me. If someone keeps saying, trust me, trust me. You're like, I can't trust this person that keeps saying I have to trust them. Yeah. Yeah, exactly. It's um, it's very interesting to me and hopefully, you know, in Mike and I introducing you the listener to, to Peter's thoughts and works, if you haven't been more exposed is you'll understand that it.
It's not this kind of a boring, bureaucratic. No, klugey kind of a theory of management. Like he puts people at the very part of it, and I think that's why it's so engaging and interesting. And it's so relatable to read because in all of this situations that he's talking about, it's like, Oh, I have felt that before I've been in that situation before, and you know, myself as I'm running and growing a business, it's still, again, you know, 50 years later, very practical.
It's very practical because again, kind of, you know, humans and human nature is the, is the thread all the way through, like, I don't think fundamental human nature has changed that much in 50 years. And so, you know, the technologies have of course, but the underlying human nature hasn't and I think that's kind of the genius nature of how he kind of future-proofed his, his work.
Yeah. I totally agree. You know, he, he is the furthest thing from a detailed thesis on operational excellence at scale, he's all about people. And the great thing about that clip that we just played is there was a little clue. There was a little clue in there about how you do this whole people thing that they're talking about.
Oh, you got it. You got to come out with a clue mink and like, we're all about, you know, finding the insights and the nuggets here. All right. All right. All right. Okay, here we go. Now it was a subtle reference that he made, but this is the biggest thing that couples the idea of people. First, we get it. How do you do it?
Little bridge. There is focusing. On the strengths of the individual. Now, what this means is that there was a common, um, school of thought over the last few decades about trying to be well-rounded as an executive. Well, Drucker is quite contrarian to that thought. He's like, uh, maximize your time and attention towards the things that you do well.
And as a manager, Stop trying to make someone who's bad at say, details and math, stop forcing them to get better at that. Give that job to somebody else who it naturally fits. And it is your job as the manager to ensure that your people are spending more time doing things that relate to their strengths because when they do something they're good at.
They succeed. They get positive feedback. They grow, they contribute and they feel good about their work. Um, stop trying to force people out of their strengths, into their weaknesses. And this is the key bridge. Your job as a manager is to work out what your people are good at and maximize their time doing it.
That is probably one of the biggest, uh, practical ideas that Drucker has get into your strengths and get your people. Into their strengths. So obviously when you're recruiting, if you've got five people who are great at details, but poor at say big picture stuff, then the next one you hire is a big picture person and reorder it like that.
And if you look at great sports teams, this is where you see it all the time. Oh man, they graded offense defense, their transitions. Good. They're good. From three point shots. They're great. Under the net, you know, it's this. Is play to your strengths. Yeah. I think if you kind of, you know, mapped someone's capabilities, um, there's going to be some peaks and troughs.
And really what Peter's saying is amplify the peaks, make the peaks much higher as high as you can, and focus on that. And don't really worry about filling in the troughs because that's because when you begin to overlay. These graphs of different people, then you're, you're kind of hitting the top of the graph, you know, between different people and yeah, I think it's a little counterintuitive, but you know, there's a lot of, of writing and research and thought that's come out, you know, since I'm thinking of like StrengthsFinder and, and other.
Other things that really, again, just focus on, on strengths and it's kind of like delegating or partnering or hiring to kind of mitigate as opposed to, I mean, sure. If there's like a huge deficit that, you know, that must be filled, um, You know, kind of do the triage to do that, but you know, really spend your time and focus on your strengths because here's the thing.
When you, when you start getting people playing to their strengths, this is when you get organizational transformation and you move away from playing defense, you get into offense, you have the potential to do amazing things. And this, this next clip is just so perfect because this is setting up the Drucker idea of like, The way to get to greatness is through empowering your people and giving them a mission that they believe in.
And this is, so if you think about the turmoil and all the polarization right now that we live in, in this modern world, this thought is so relevant. So this is some commentary on how to achieve great things through mission and empowerment. Understood that organizations were imperfect at best and often largely misguided.
And at the same time we had this sense of if you could tap into the mission or, or create a mission or a purpose, a sense of. Focus and then get individuals who themselves had tremendous limitations, but have one area of genius and empower that area of genius and enable those individuals to work constructively together toward that unified purpose.
That great things could be. Hmm. This is really fascinating. Cause Mike, you and I are actually just kind of talking about something. That relates to me and my business right now, if you know how to bring people together to do great work. And there is right there. So you choose and focus on a mission. You empower people that have a specific area of genius, and then by bringing those people together around that mission, yes, you can then go and do great work.
It's very elegant. It is. It is. And, and, and. The, the art of empowerment starts with, you know, finding their strengths and letting them do more of that and making sure that whatever widgets you make day to day in your office, make sure it's done in the context of a mission that creates some sort of positive change in the world.
And, and I think that this is a great challenge to any business to ask themselves, like, why do we matter? You know, will people really miss us when we're gone? Uh, what are we really contributing here? And the neat thing is that when you put people first and you believe in them, you find their strings, you empower them and you give them a mission to go after is you get this magic thing that starts to happen.
It has starts to happen inside of your company. It starts to happen with your customers and your partners. And. You know your neighborhoods in which you operate. And this is this idea of community, and this is where all these different, uh, experts and their commentary on Drucker brings this whole Peter Drucker world together, which is this idea of community.
And he really sees. Company. And we're back to his famous, the letter C seems to come back all the time, but really you, you could see the company as, as a concept, just as part of a community. So let's dive into this clip, which is really getting into the essence of how Drucker thought about community and business.
Now a Harvard business review classic, uh, HBR has identified a few of these articles that, uh, over time have been the most popular ones. Um, when the article first ran, uh, now a bit more than 20 years ago, and it came out under the title of what businesses can learn from non-profits. A lot of folks thought it was actually a typo.
They thought that HBR had gotten the title backwards. And that, of course the title of the article was supposed to be. Uh, what can nonprofits learn from business? One of the core insights Peter had, and that I think very much to Mike's point was nonprofit organizations have figured out how to do something really extraordinary, which is they figured out how to rally talented individuals to voluntarily give their time, talent, and treasure toward a cause for no monetary reward.
And that in fact, the future of business belongs to the organizations that can learn from that. And we very much see that today. Uh, of course, as so often was the case. Peter was a generation or more ahead of his time in what he was, he was counseling businesses to attend to. And we now see the really successful businesses are the ones that can actually in effect create a kind of volunteer core around their products and services.
People who are so passionate about what they do, that they will volunteer their time for that. Uh, so that was really the heart of that article was that, Hmm. Listening to that mic, I can think of a few famous. Tech, you know, organizations that I think have achieved. This idea of community that, that Peter talks about.
I'm curious if you're thinking of the same ones I am. So we'll go back and forth and just maybe name a couple here. So I'm going to start with, with Google. I think Google is creating community. Ah, yeah, I'll go totally different type. Etsy is a community of creators and hobbyists. Yeah. I work across the street from them.
In fact, they have, yeah. Cool. I've been to their offices and can say that. Yes, it is. It is a wonderful community there. All right. Who else on your own yours, I'm going to say. Oh, yeah. See, this is tough now. I think Lyft has, yeah, certainly a stark comparison to Uber. Right? The whole thing of sitting in the front seat, like it's so simple on it.
I think it just embodies that idea of community. Does it? Does what about, um, like Khan Academy and code.org? Oh yeah. Yeah. Well, I think it's this fascinating. This can be abused. Yes. Um, and this is kind of where I was going, at least leading off with Google, because I think you can over optimize the community to extract.
It becomes about extracting more value and time and talent. From your people as opposed to having them graciously and without thought, you know, giving it back. Cause they're rallying around this. Cause yes. I'm thinking about things like, uh, you know, company perks and those sorts of things. It's really.
Kind of, it's got the veneer of community, but it's not real community. That's, that's, that's absolutely right. And I think you can go a couple of ways with this. I mean, there's a number of classic, uh, selling schemes. Uh, what's the, what's the famous vitamin is it? I think it's a vitamins company in the U S which uses the Amway model where you buy in and then you sell to others and they're always getting in trouble.
Oh, I can't remember the name. But, I mean, you could, I don't know. Yeah. I can think of if you can, but you can even expand this thinking to, are you creating community? And this is where I think Facebook is in a very tight situation. Are they creating community or exploiting the community? And, um, this has been at the heart of the challenges they've had this year, because I think the line is so fine with them.
I think Google is actually in somewhat of a safer place because maybe. Unwittingly their failure in social media has meant that they really don't play an active role in that space. Whereas Twitter obviously, and Facebook are much closer to that. And I think that really what we can take from this is that.
Having purpose energizes not only your staff, it's your customers and your partners. And I think of a great successes. Like Tom's a charity water, or we partner be like, these are companies that put, you know, you know, giving back at the core of their, their, their mission and proposition. And you think about what will be, has gone on to do.
They took on Luxotica. Luxotica literally makes most sunglasses in the world. They distribute most sunglasses and they retail most sunglasses. And they came in and said, well, this totally sucks. And they challenged the status quo and I think they've done fabulously well as a result of it. And, uh, apart from being, yeah, and it's not just, it's not just, you know, what they're doing.
It's also their company cultures as well. You know, th they are all known for creating a community within the organization, as well as, without, and, you know, if you're really interested in, in this idea of community, I would really encourage everyone to. Uh, explore the idea of a benefits corporation. So these are for profit companies, but the most important thing that they do, where they, where they differentiate is that they choose not to put profits before everything else.
They choose to put the community. And people and the environments in which people are living before their profits. So they're perfectly free to make profit, but to do so very much Yvon Chouinard style, you know, Patagonia style, which I think can. Can bring great value and benefit to the people around. And so if you are interested in this idea of building a company that is really designed to contribute positivity and value into a community, I would really research the benefits corporation idea and, and we'll put a link in the show notes to that, cause I'm really interested in that stuff.
Sure. To check out our episode on Patagonia, founder, Yvon Chouinard, Patagonia is a B. Corp. And they're probably one of the most profitable, if not the most profitable B Corp out there. So if you don't think that putting people in purpose ahead of profits will make you money, just, yeah. Look at, look at totally.
And this, this all really kind of fits into this bigger picture of doing business is more than just dollars and cents. It's it's really about the full picture of. Working with people, understanding them, serving the pains that they have trying to solve those, trying to create gains for them and trying to think of not just the binary nature of business of transactions, but thinking of it as a whole spectrum of human behaviors, thoughts, ideas, and, uh, this, this last clip that we have.
Is the, is, is some great thinking around how Drucker really saw, uh, the practice of management as being all about the liberal arts. I think that, um, is a part of the genius of Drucker event. That he gets you thinking about issues. He throws out things like management is a liberal art, the practice of management, which really did codify the practice of men.
And he just threw that out. Well, it turns out that there's a whole lot behind that. It's true. It starts your thinking. One of the, I think important insights of Peter's was his recognition that that management is a liberal arts, that it's not simply learning how to do productivity or how to do marketing, but the really effective leader needs to understand the psychology needs to understand or religion needs to understand science.
Um, the whole series of, of what make up the liberal arts that informed the, um, I'm going to play devil's advocate here, Mike, because we spent a lot of time talking about focusing on your strengths. And then here they're saying, well, management is much more like a liberal art, which in that statement kind of implies a little bit more breadth in what you're learning.
All right. I'm just kind of curious how has that, how that sits with you, how we might integrate those, those ideas. Okay. So if I want to try and make the ideas work together, I would say the strength is about your area of practice, but. The worldview should be much broader than just that. So for example, let's say you're a basketball coach and you're expert at defense.
That's your strength. However, you should, you should understand the broader game, uh, itself that there's offense and transition, and then there's like special teams, but then there's also. Club culture, giving back to the community, going and training kids, all of which may be a broader, more liberal view of your practice, but your inherent strength is being the defense coach.
I don't know. Does that work? Yeah, I know that's a good one. And I would almost go back to an earlier clip where they're talking about Peter saying that it's, it's kind of the organization's job to not only develop someone intellectually. But also morally, morally. Yeah. It's like, it's you don't think that that's like that more morality and management?
It just, again, it's just like, Whoa, oil and vinegar. Like, I don't know how they integrate, but interesting is Yvon Chouinard. Uh, you remember when we did his show, he was like, who wants to be an executive? They're like. Scoundrels and thieves, right? Yeah. I'll be a dirt bag for life. Yeah, I remember that. And I think if we look at a lot of what we are exposed to is, uh, the failings of executives and we've seen a lot of that over time, but what's, what's interesting is that the great, the greatest companies of all time have usually behind it?
This great culture, dedication from the founder, putting people first finding their strengths, but just look at, um, some of the, the greatest people that we've had on the show. There's definitely a pattern in humility, hard work, listening to others, serving others. That's a massive theme in, uh, longevity and success.
And I think what we're hearing here. Is that in the end, the good guys win bright short-term opportunist, selfish companies always come undone because they just don't have community around them. And I think, you know, you only need to have a look at when you see successful companies, you see these patterns and you see in, uh, failures.
Such as the 2008 wall street crash, such as Enron, such as great failures, such as blockbuster, such as Kodak, they lost touch with who they were. They got off track and sometimes people just make mistakes. But in the case of Enron, they actually failed that morality test that, that Drucker has established, you know, Make people great, um, and make, make great things that solve problems, but you also have a, having an explicit role in making the people better off.
I mean, they use the word morality. I think, uh, if you look at what we mentioned with mission-driven socially driven companies, people want to do more than just make some stuff. They want to know that there's some sort of legacy, some sort of something they can be proud about to go home and tell their friends and family say, look what I contributed to.
You know, and I think that's what Drucker taps into don't you. Yeah. And I think there's a fundamental drive. Like if, if you're alive, you want to grow and develop as an individual and that's, there's many different facets to that. It's not just, how can I get better? Banging out widgets, you know, there's so much more and that's what Peter is pointing us.
Yeah. Uh, I am absolutely. So what just keeps coming? Th the, the first scope was perfect. Mike, you picked it for the perfect first clip. You know, it, it comes down to the four CS of competency, character. Compassion and community. Yeah. It's very elegant and very simple. So I don't think if you're not going to take anything away from today's show, take away those four things.
Yes. Yes. And, um, we're really lucky to have the chance to dig into the work of Peter Drucker, which really meets the test. Of being absolutely the timeless. Um, those four CS are such a great way to sort of encapsulate the first half of the show. But before we, and, and this next section, what we're going to do is we're going to go like total life hacking Ninja deep on.
The principles of his biggest book, uh, and we're gonna really get into some, some hacks that you can use to be a better executive, to be a better manager, uh, before we get into all of that good stuff, if there was ever a time for a chat Owen book review, I think now's the time Chad. Yeah. So I went a little off the beaten path here with the book, innovation and entrepreneurship.
I picked it up because of the title, not even really knowing who Peter Drucker was. I was like, Oh, it's a book on innovation, entrepreneurship. Like I'm starting my own business. This seems like a pretty, uh, it seems like a pretty good thing to pick up, but yeah, good place to start. But yeah, it was 10 years ago almost.
And, um, it's a hefty tome and I didn't quite make it all the way through, but I revisited it in preparation for the show. And I was just really struck. It was written in 1985. I was really struck with how. Timely and relevant it is to today. And there's just a few simple ideas that, you know, we can take from the book and I would highly encourage you all to at least Google kind of summary or a slide deck or something for this book, because I think you can get a lot of good information from just some summaries, but it's very interesting to me how he ties innovation and entrepreneurship together.
One kind of slap in the face to me when I was first starting out is, as I was reading, it is, I was essentially, Peter was telling me that I wasn't an entrepreneur and I wasn't innovating. I was just a small business owner. It's like, Oh, that kind of hurts. You know, I want to be a navigator. I want to be an entrepreneur, but, uh, it's, uh, It's interesting.
The distinction he makes, you know, small business is not entrepreneurship. He's very clear in saying that, you know, so starting, uh, starting another restaurant or another gas station or another, uh, what's on the block here that that's, that's opening up. There's always seen as something new opening up this, you know, not opening up the next Starbucks or another franchise.
Um, and it's also not a personality trait. Which again was a very interesting realization to me, especially now as I'm kind of reflecting on 10 years, um, it's entrepreneur, an entrepreneur. Searches for change and inside that change opportunities to exploit it. And that expectation is the innovation. Um, and so innovation and entrepreneurship are kind of very intricately linked in that way.
Yeah. It's yeah. They're, they're, they're intertwined. Um, So I'm kind of curious, Mike, from, from your experience and point of view, you know, how do you, uh, connect to relate these ideas of, of innovation and entrepreneurship? Yeah. So as soon as you were saying that, what came to mind is Musk and, and, and brands, and especially as the hunters of change, right.
Of all the people that. We've done shows on. It feels like those two are the greatest searches of change and looking for the gaps inside of that, where they can produce new products and services. So they certainly strike me as being the real entrepreneurs. Um, and, and definitely when I think about Yvon Chouinard, who had mentioned that he was sort of an accidental, uh, entrepreneur, if you will, um, So, so there's this certain, uh, shrewdness, uh, that he applies to it, which I really like, and it's quite a calculating way to look at it, particularly because he's someone who places, people so much at the center.
So I kind of liked that tension if you will, between, between the two things. Um, I definitely think. You know, what speaks to me is innovation is coming with something that's really different to the status quo. I think, you know, approaching an unmet need in a very unusual, very different way. This is the, the excitement that we all feel, uh, about something that feels like it's the next big thing.
And I think. My quest is always, what I try to do is to be open minded to what the, the radical new approach to solve a problem or an unmet need in the market. That that truly is. I love that moment of, Oh my gosh. Maybe if we did it this way, that little aha can, that, that really is, that gets me out of bed in the morning.
If that makes any sense. Yeah, this idea of kind of like entrepreneurship is like a carrier or a vehicle for the innovation. That's, that's one way to see it. You know, innovation is kind of burst out of the entree, like out of those opportunities, it's the entrepreneurs are capitalizing on and that innovation doesn't necessarily have to be technological.
That's another big point. That he makes in this book is that, you know, actually most of the, the new quote unquote technologies, aren't high tech and the innovations in the broader marketplace, aren't high tech, you know, that's kind of what the media focuses on and that's what's most popular. But that there are many kind of unsung innovation giants.
Now, as we've seen, as we profiled individuals way outside of Silicon Valley, it's not just limited to, to those seconds. Yeah. Yes. And I think, I think the reason that, uh, technology. Take so much of the limelight is that technology and particularly things such as the internet software data and all that kind of good stuff has the ability to move so fast and to get to such enormous scale.
And, and that's, what's the mind blowing element is to think that, you know, 20%, 30% of the world's population is on Facebook. Um, you know, this, the. To have achieved that scale in just over a decade is just pure, ridiculous. And that's what, why technology gets us so excited? What a fantastic book. So that one was innovation and entrepreneurship.
I know that obviously we've talked about the effective executive. That was another great book. What else are some of the must, must reads on the Drucker list? As far as you're concerned, Chad? Uh, I think to round it out, I would put the essential Drucker on there that is. Something that he wrote himself as kind of looking back.
This is later in life, you know, he was looking back on all of his theories and trying to kind of combine them into a singular work. So trying to condense 38 books into his 39, no, no mean feat. Um, okay. So we'll have links to all of those books. And we mentioned benefits, corpse and links to, to some of these HB are articles.
All of those will be on moonshots. D I O but now Chad, now we're going to do, uh, I have a, an audible to call here, Mike, and see, see if you'll go. Okay. How would you like to do a lightning round? Totally with you? Where, so what we have here are five clips talking about the five ideas from. Effective executive here's most famous book.
So I'll see if we can do this mic. So we're going to, we're going to play these clips that, that talks about each of them. And then I want you and I to try and come up with like what, the one thing we're going to do to try and work towards that one thing. Okay. Let, let me build on that show. We make it, if there was one essential tip, we could give each other.
On those five, for example, the first one we'll get into know where your time goes in order order to do that. If you can only give me one advice to know where my time goes. So give me the essential tip for each of the five and we'll do one each one from you, one from me. So hopefully our audience gets like 10.
Like essential advices on how to be the effective exec. All right. Well, you've already teed up time. So let's learn about how Peter views an executives best use of his or her time. The first practice of the effective executive is time Drucker mix. The important point that time is our most precious asset.
You can lose a lot of different things in your life and you can get that back, right? You can lose some resources or cash. You can get that back. You can even lose your health a bit. You can get that back. Once time is gone, it's gone, period. So he says, the first thing we have to do is, uh, optimize our time.
There are three. Components to optimizing your time. Peter Drucker style here they are. The first thing is to track, which we're going to talk about in a moment. The second thing is to manage. And then the third thing is to consolidate. All right. What's your tip for me, Chad ha how, if, if I need to know where my time goes.
What's your essential Drucker advice for me? What should I do? Two words. Pullman. Doro technique. Oh, classic. Yeah. Okay. Now explain to our listeners the Pomodoro technique. Yeah. So we'll, we'll link to this in our show notes, but essentially. I'm I'm reducing the idea, but you traditionally you'd like you would take a tomato timer, you know, a little kitchen timer that looks like a tomato.
You would set it for 25 minutes and choose just one thing that you're working on. And that's the only thing you can do for those 25 minutes. If you get distracted and stop, you have to restart again. You know, set the timer back and try it again. The idea is to break down your work into manageable bite-sized chunks and you choose that one thing.
So again, you, at the end, you take a five minute break and you kind of repeat the process, you know, and every three or four, you can take a longer break and, you know, in a day you can get. You know, between probably 10 and 16, depending on how, how productive are these little Pomodoros completed. And then at the end of the day, you'll have a list of the one thing that you worked on for each of those.
And so that's, that's my one. Uh, that's my one tip. Okay. Spirit of the lightening around is write down how you spend your time. The biggest aha for me, Drucker style here is action capturing in my calendar application, how I've actually spent my time so that I'm able to go back and ask myself the following day.
I can say, how did I spend my time yesterday? This is the single biggest thing that helps me understand am I being effective? Which is how I'm, how I'm putting my attention and time somewhere. So write down your, your time. So that's the first chapter on what Drucker has says to be an effective executive is to know where your time goes.
Now, the next thing, this one's a little bit more subtle. This is all about your contribution. So have a listen to this, this clip, and we're going to talk a lot about a contribution in the sort of subtleties and nuances in that, but be ready, Chad, because I'm going to need some advice on contribution. The second thing is you need to know what contribution is expected of you.
So if you want to be effective, Rather than merely busy. The first question to ask is effective at what, what is the contribution that's being asked of me by my organization in a professional environment or by my life in a broader sense. So for example, the way I answered that question is first and foremost, I'm the only one who can be an extraordinary husband and father to my wife and to my kids.
There's a contribution that's being asked of me that I prioritize significantly and then creatively my decision. And what I believe is being asked of me is to help people optimize their lives, give them more wisdom in less time, short form digital content that helps them become better human beings.
That's the contribution being asked of me. Okay. With that Drucker says the most important thing you get out of that. In addition to clarity on, uh, what you're supposed to be doing to be effective is it basically forces you to step up. He says, it's really a call of a self-improvement. Who do you need to be in order to make that contribution?
It's really cool thing to think about. You want to do this? Well, what's the gap and how are you going to close that gap? That's the second thing here. Contribution. Hmm. So I've got a, I've got a post-it note for you. Okay. This post-it note has been on my desk for quite some time now, and it just simply says what's the next action to get me closest to the next dollar.
Ooh. Okay. So, okay. As you know, someone that's running my own creative studio, that's asking myself that question. Um, I think is really getting at this idea of contribution and it's, it's been transformative. How about yourself? Very good. Okay. Okay. So that one was like, what's the closest action to getting me next dollar.
My thing about contribution, I interpreted as being. About role and expectation. And my suggestion to you and to the audience is ask yourself, what would your role model do now? So let's say bill Bellacheck is your. Absolute hero role model for who you want to be in your role, what would he do right now?
Let's say Oprah Winfrey was your ramen. What would, how would she handle this WW? O J w w w w J D w w O D WWBD. Yeah. Kind of idea.
Exactly, exactly. But why I find that so powerful. Is it gets you out of what you. Uh, thinking to do, and it creates a new frame where you go, Oh man, I gotta man up. I gotta step up. Um, and I find that really powerful in defining what your contribution can be. So that's number two. So we've done time. We've now talked about contribution.
Now we're going to get into something we mentioned earlier, which is strengths and this, this next part of this, uh, Drucker deconstruction is all about how you can build your strengths and those in others. The third practice of the effective executive is to, as he says, make your strengths productive.
He's got some great wisdom here. He says, look, all strong. People have strong weaknesses and they have strong. I'm sorry. They have strong strengths and they have strong weaknesses. He says, uh, Hey, have peaks and valleys. There's just how it works. Right. And the people who try to be well-rounded to use his language, the whole person, as he describes it are basically committing themselves to mediocrity.
He says, don't focus on your weaknesses, focus on your strengths and lean into them so hard that you make your weaknesses irrelevant. Hm. Hm. Chad, how do, how do I lean into my strengths? Tell me the answer is, is giving you a reading assignment, a cop-out. Uh, go on. You can give it to them. I'm trying to this idea of strength.
There's a great book out there called unique ability. Bye. Ooh. Um, okay. Dan Sullivan and others, we will, we'll put a link in the, uh, in the show notes, but the core idea is like to, to be effective and Peter and Peter's terminology, like you should be operating and working inside of your unique ability as much.
As possible, like 90% of your time, plus you should be operating in, in your unique ability. So, you know, depending on what your best strength is, you know, it's just optimizing for that. So I, again, it's kind of like this question of what's my unique ability and how can I spend the most time in that? That's a, you want to learn more?
You can, you can read the book, but at that's how I'm interpreting it. Okay. I love that. And in various much in a similar vein, I'm going to recommend to you. You've mentioned it before strength find a, uh, 2.0 or a free service. That's available to all of our listeners, which is 16 personalities.com, where you can do a 10 minute survey and it will give you very sharp interpretation of your personality and where your strengths might lay.
And I can not. Uh, undersell strengths finder, 2.0 and 16, 16 personalities. These tools have helped me really understand where my strengths are, indefinitely, where my weaknesses are. And. I, I found this incredibly liberating. I really remember reading strengths, find a 2.0 way back, like almost 10 years ago.
And it was like a serious, ah, ha moment in my, in my career. And this is, this is the way that you can not only build your own strengths, but, you know, get your friends, peers, and colleagues to do these with you as well. And talk about, yeah. The sort of strings that you discover the sort of archetype behaviors that you have, because then you can all get on the same page about where the strengths lay.
So that's number three, build on yours and other strengths. Now, uh, an idea that that Drucker coined, which has taken off, which is first things first, and this is all about. Making and sticking to priority. So let's have a listen to the thoughts on Drucker's first things. First, the idea here is concentration.
So when we manage our time, we consolidate it ultimately and Drucker makes the point. That there will always be more good ideas than there is time to actually execute them. So what does that mean? It means we need to go back to the four disciplines of execution. Get clear on our wildly important goal.
Say that's important to me and then concentrate all of our energy into that particular activity run out of space here, but here's what he says. He says first things first. Stephen Covey's seven habits of highly effective people. One of them is first things. First, he wrote a whole book called first things first, you know, where he got that phrase from Peter Drucker.
First things first Drucker says, guess what? He says about second things. Second things. Not at all. First things first. Yeah, I think I got to go back to, to post its care. Mike, I, here we go. Yeah. I don't have like big notebooks and sheets of paper on my desk that I, that I use to plan my day. It's one post-it.
Whoa, Whoa. Fit. Because I can only fit one thing on it. So if I only, yeah, I write the one thing that I must do on that. Post-it and when it's done, I crumple it up and I throw it in the trash. Love it. My one is do the most important thing at the beginning of the day. All right. If you, if you're got to write a script or make an edit, I do that between eight and 11 in the morning.
I really have this thing in my mind. Uh, I don't, I avoid, like, I really do everything in my human power to avoid any meetings. Uh, before lunch, anyone who's had a meeting with me, knows invariably, it's either lunch or later, and that's because. First things first. And I, I take that quite literally. I try and do my writing in the morning.
My thinking, uh, the most important work comes in the morning and, uh, amazing to think that Drucker coined that whole idea of first things first. Huh? Yeah, there's this interesting or funny, a quote that I think might be miss attributed to Mark Twain, but supposedly he said that if the first thing you do every morning is to eat a frog.
You can go through the rest of the day with a satisfaction, knowing that that was the worst thing that you had to do that day.
Well, yeah, that's just like tight, the obstacle first and everything after that is good. Right? Yeah. All right, so we've got four down. One left. Yeah. Yeah. Come on, hit us. What's the fifth. It's really just about decision-making. So of course, as you know, to be an executive that comes with a lot of decision-making, so, uh, here's the fifth discipline of effective executives.
So the fifth practice of effective executives is they make effective decisions and he says, you need to have a systematic way to approach making decisions. The effective executive makes less decisions, not more than the ineffective executive. How is that possible? Because they step back and they see what's important and they make one decision.
That takes care of hundreds of decisions. They don't have to make the same decision again and again, and again and again. Right? So, uh, he describes that as boundary conditions. One of the facets of good effective decision-making is you need to know your boundary conditions. You've got to know what qualifies as a good decision.
And the example he uses is the New York times. So the New York times back in the mid 20th century, There was a huge blackout in New York city, right? So all the power went out in the only paper in New York city that was published. The following morning was the New York times. Everybody else missed a day, but they hustled over to New Jersey and they were able to get in on the printing presses of another, um, newspaper that had some extra space, but they only had a couple hours.
But it was enough time for them to print a million copies of the New York times for the next day, which is what they needed to get out with. Right. So they have these two hours, but in the middle of the production, actually the production cycle was delayed by something like 46 minutes because the editors got in an argument about the hyphenation of one word, the entire newspaper, one word they argued for nearly an hour about how to properly hyphenate it.
And Drucker says that one of their boundary conditions was impeccable grammar that the New York times needed to be perfect in every single line of every single, uh, issue of their newspaper. They needed to be the standard for grammar in America. So long story, a little shorter, they only printed a fraction less than half of those million copies went to market.
The next day, Drucker says, did they make the right decision? It is absolutely their boundary condition was clear. Their boundary condition was no errors ever. Therefore, the measure wasn't the number of sales or copies printed events sold. It was whether they adhered to that standard. They made an effective decision.
All right. I got one for you, Mike. All right, hit me with it. I picked up this idea in a couple of different places. Just wanted to give a shout out to one of my clients August for really driving it at home. To me is this idea of kind of creating rules or strategies for yourself that are phrased in the following way blank, even over blank.
So for the New York times, in this example, it would be. Impeccable grammar, even over meeting printing deadlines. Yes. Like that's, that's, it's carved in stone and that's, you know, that's the commandment. And like, I would start with maybe two or three of these, um, for yourself. But as you apply them to different areas of your life, it's really great.
So, you know, things like. Uh, quality, even over speed or clarity, even over conciseness or you can create them for anything. Oh. And best of all they fit on post-its. Mm man, this is like the post-it show, Chad. Um, my, my post-it for you is. Write down, discuss and agree your values as an organization. Now it's so ridiculously simple, but I think the twist on my thing is write it down.
Talk about it and agree your values, because I believe that that is the lens through which you should make your decisions. And I think most companies don't really know their values. And so they don't really have a North star or a moral compass as Drucker would say. And what we see is why, why we're so compelled by the Warby parkers and the charity waters is that their values are so clear and that they can just make sense clear decisions from that.
I mean, that's the ultimate, it's like the playbook that you can always go back to for an effective decision. The way you get to blank over blank is knowing what your values are. Great. Well, I, I liked that a lightning round. That was fun. That was fun, man. The show notes are getting massive cause we're, cross-referencing Pomodoro techniques and books and, uh, this is fantastic and we'll be the biggest show notes ever.
Um, wow. What a, what a, what a Epic DRA, uh, Drucker's show. I, I mean, to be honest, we could almost have gone Steve jobs on this one and like, If those five things, we could've done a show just on time, a show just on contribution. I mean, that's how Epic this guy guy really is. I mean, Peter Drucker, uh, you know, I.
I'm looking at the body of his work and all the things we've talked about. Chad and I, I think for my liking, he earned his presidential medal of honor. I don't know. What do you think? Yeah, definitely. Right. Yeah. What profound can the fact that it's still so hard to do now. And so few people can do it.
That's the most ridiculous twist on all of this. Like we're all still trying, right. Yeah. And again, I'm, I'm really struck at just the timeliness of all of this. It's just like, again, because he's dealing with the fundamental human natures that drives all of us. Like this advice is going to be great for as well into the 23rd or 24th century.
I know, I know. I know. Um, and uh, everybody listening can, can go and grab all of these links, books, show notes. Mo Pomodoro techniques, you name it. You'll find all of that@moonshots.io. And how fun Chad, how fun has this been to get into our author series? It's such a nice, not over yet. No, no. I'm so I'm so happy.
We still have Simon Sineck to talk about in the next episode. And then beyond that we have, uh, we have Eric Reese. Yeah, it's I think, uh, taking a step back and taking a look at some authors that have written some very important and influential works in the, in the entrepreneurship and innovation space. I mean, Peter did write a book called innovation and entrepreneurship.
It's been, it's been a lot of fun. Well, I mean, you can, I mean, think we've had clay and Peter who are like the granddaddies of innovation and management, and then we've got almost the young upstart, Simon Sinek and Eric Reese for the second half of this, this riotous series. And, and what's really interesting is just the body of work.
The, these guys produce. I mean, it almost makes you feel a little bit inadequate and you're like clay Christiansen produced innovator's dilemma. How will you measure your life Drucker? I mean, we've just talked about, and then we've got coming Simon city. He had start with why great leaders eat last. I mean, We're in for another big one on the scenic show.
Um, I'm very excited about that. And Eric Reese, I mean every, every lodge and small corporation at the moment is trying to adopt a lean, right. They're trying to be a new form of themselves. They're trying to self disrupt. So boy, have we got some action coming down the track? Yeah, the, the good news is that it's slightly lighter reading.
Uh, Simon Sineck and Eric Reese then, um, then Drucker in Christianson. Yes. That's that's for sure. Way more digestible, but, but, uh, no less potent. I might, I might suggest. Yeah. Yeah, I, yeah, I'm, I'm really looking forward to it and. You know, I wanted to put the question to you and the listeners, if there's any authors that you feel like we have grossly overlooked, shoot us an email@helloatmoonshots.io, and maybe we'll come back and revisit some more authors later down the track.
We could definitely do another series of authors and we should point out to our listeners that once we finished the author series, I think we're going to do. The greatest investor series. Yep. So who, who, which of course we can't fit into like just three or four episodes. No, but, but we're gonna, we're going to try, we got to go.
We're going to have the two granddaddies. We're going to get a Charlie Munger, Warren buffet. But, uh, there's so many, I've been talking about Peter teal and Paul Graham and yeah. Many others and something close to both of our hearts after that, going on another tension after that, what's the next series, uh, Chad, we're going to do after the investor one.
Oh, you're you're you're ahead of me in the, uh, the spreadsheet, Mike you'll have to you'll have to come on the architect series. Oh, that's right. That's right. Holy smoke. And you're, you've brought, you've suggested a mountains to Mike. I was like a classics guy. So Geary Franklin rides did. And you went like Bjork angles.
So you to like, who is this Bjarke angles? Well, he's, uh, he's kind of hard to describe, like if you, uh, he's, he's, he's in some, he's in some Netflix shows, I think it's, uh, abstract. There's a, there's a show on him and his firm big. So that tells you a little bit about his personality because he named, uh, his, his from big, but, uh, yeah, they, they hail from Copenhagen, the Danes and yeah, they.
They have some really fascinating, interesting buildings here in New York city. But yeah, I mean, you'll just have to stay tuned in about three months, four months, 2018 is done. You know, this leads, we at chocolate block and we're going to have some special episodes to break it up a bit. We have Gary back for the history of disruption.
We'd love to hear some ideas about another special episode. Yeah, and we, we, we might try and, uh, do another live show before the year's out. What do you reckon about that, Chad in 2018? That sounds nice. We got to set some, you're a busy guy. We got to try and squeeze it in your agenda, but I might start working on that idea.
All right. What a great show, Chad. I mean, man, Drucker. Timeless. Okay. Timeless is just the word. Isn't it? Yeah. Don't, don't go anywhere. We've got two more, uh, authors coming up and episodes. All right. Well, Chad, thank you to you. I know it's probably time to cook yourself a wonderful meal and relax for the evening.
Have you got anything big planned? You're going to jump down with a bit of Netflix or the Kindle. What do you, what are you thinking? So my big project this last weekend was building my own computer, which I hadn't done in probably 15 years. Uh, or maybe even more so, yeah. You know, going to enjoy my, enjoy my new, uh, my new computer.
Oh, wow. That sounds really, really cool. Well, um, I'm going to, uh, upload, uh, my show recording to you, and then I'm just going to head straight to the gym and grab some lunch after that. So how lucky am I? My, you know, took my, my son to school came here, recorded the show with you, and then I'm going to go the gym and workout.
I mean, life doesn't get much better than that. Does it? Sounds like a great Thursday to me, Mike. Exactly. All right, Chad, thank you to you. Thank you to our audience has been wonderful. You can check us out@moonshots.io. We've been digging deep into the world of, uh, none other than Peter Drucker. We wish you all well, and that's a wrap from the moonshots podcast.