Drucker Foundation Self-Assessment Tool: Content
The First Action Requirement of Leadership
By Peter F. Drucker
What is our mission?
Who is our customer?
What does the customer value?
What are our results?
What is our plan?
A Time to Shape the Future
Nonprofit institutions are central to the quality of life in America and central to citizenship; indeed, they carry the values of American society and the American tradition. The social sector organization has been America’s resounding success in the last fifty years, whether we talk of institutions like the American Heart Association, which has taken leadership on major health issues, or of youth services such as the Girl Scouts of U.S.A., or of the recovery techniques of Alcoholics Anonymous, or of the fast-growing synagogues, churches, and mosques, or of the community developers that have revitalized urban neighborhoods, or of outstanding museums and colleges, or of the many other nonprofit groups that have emerged as the center of effective social action in a rapidly changing and turbulent America.
We are living through a period of sharp transformation. People born fifty years from now will not be able to imagine the world into which their own grandparents were born. Society is rearranging itself — its worldview, its basic values, its social and political structure, its arts, its key institutions. Social sector organizations will be needed even more urgently in the next decades as needs grow in two areas. First they will grow in what has traditionally been considered charity — helping the poor, the disabled, those who suffer deprivation, the victims of violence or disaster. And they will grow, perhaps even faster, in services that aim to change the community and to change people.
What new questions will arise and where the big new issues will lie, we can, I believe, already discover with some degree of probability. In many areas we can also describe what will not work. But answers to most questions are still largely hidden in the womb of the future. What the future society will look like depends on leaders in all sectors, but above all on each of us in our work and life. This is a time to shape the future — precisely because everything is in flux. This is a time for self-assessment, clear-minded decisions, and, above all, a time for action.
The Search for Community, Commitment, and Contribution
Every other American adult — 90 million people all told — works at least three hours a week as “unpaid staff,” that is, as a volunteer with a nonprofit organization. By the year 2010, the number of such unpaid staff people should have risen to 120 million, and their average hours of work to five per week. The main reason for this upsurge of volunteer participation in the United States is not the increase in need. The reason is the search for community, for commitment, and for contribution. Again and again when I talk to volunteers, I ask, “Why are you willing to give all this time when you are already working hard?” Again and again I get the same answer, “Because here I know what I am doing. Here I contribute. Here I am part of a community.”
The nonprofit organization is a new center of meaningful citizenship, of active commitment. It offers the means to make a difference in one’s community, one’s society, one’s own country, and beyond. Citizenship in and through the social sector is not a panacea for the world’s ills, but it may be a prerequisite for tackling these ills. The organizations of the social sector have the critical leadership challenge to restore civic responsibility and the civic pride that is the mark of community.
Focus on Results
All social sector organizations share the common “bottom line” of changed lives. This is where results are — in the lives of people outside the organization — and achieving these bottom-line results is of absolute importance. Forty-five years ago, when I first began working with nonprofit organizations, many felt that good intentions were enough. “Business” subjects such as management, marketing, and return on investment were almost never discussed. Today, nonprofits have to think through very clearly what results are for their organization. They must demonstrate both commitment and competence in a highly demanding environment. People are no longer interested to know, “Is it a good cause?” Instead, they ask, “What is being achieved? Is this a responsible organization worthy of my investment? What difference is being made in society, in this community, in the life of individuals?” The successful nonprofit institution will hold itself accountable for performance inside the organization — for effective marketing, exemplary management of human and financial resources, for contribution in all areas — but always with the central focus on its one bottom line: changed lives.
The Five Most Important Questions
When we announced in 1990 that we were establishing the Peter F. Drucker Foundation for Nonprofit Management, many in the social sector approached me, along with Frances Hesselbein and members of our board, saying, “The most important management resource we need is a method to help us think through what we are doing, why we are doing it, and what we must do.” And so we developed this Self-Assessment Tool, which presents the five most important questions for any nonprofit organization to ask: What is our mission? Who is our customer? What does the customer value? What are our results? What is our plan?
The questions are straightforward — and deceptively simple. Throughout the self-assessment process, you will examine the fundamental question of your mission: what the mission is and what it should be. You will determine your primary customer: the person whose life is changed through your work. You will determine your supporting customers: volunteers, partners, donors, and others you must satisfy. You will engage in research to learn directly from customers what they value, decide what your results should be, and develop a plan with long-range goals and measurable objectives.
Encourage Constructive Dissent
All the first-rate decision makers I’ve observed had a very simple rule: If you have quick consensus on an important matter, don’t make the decision. Acclamation means nobody has done the homework. The organization’s decisions are important and risky, and they should be controversial. There is a very old saying — it goes back all the way to Aristotle and later became an axiom of the early Christian Church: In essentials unity, in action freedom, and in all things trust. Trust requires that dissent come out in the open.
Nonprofit institutions need a healthy atmosphere for dissent if they wish to foster innovation and commitment. Nonprofits must encourage honest and constructive disagreement precisely because everybody is committed to a good cause: your opinion versus mine can easily be taken as your good faith versus mine. Without proper encouragement, people have a tendency to avoid such difficult, but vital, discussions or turn them into underground feuds.
Another reason to encourage dissent is that any organization needs its nonconformist. This is not the kind of person who says, “There is a right way and a wrong way — and our way.” Rather, he or she asks, “What is the right way for the future?” and is ready to change. Finally, open discussion uncovers what the objections are. With genuine participation, a decision doesn’t need to be sold. Suggestions can be incorporated, objections addressed, and the decision itself becomes a commitment to action.
Creating Tomorrow’s Society of Citizens
Your commitment to self-assessment is a commitment to developing yourself and your organization as a leader. You will expand your vision by listening to your customers, by encouraging constructive dissent, by looking at the sweeping transformation taking place in society. You have vital judgments ahead: whether to change the mission, whether to abandon programs that have outlived their usefulness and concentrate resources elsewhere, how to match opportunities with your competence and commitment, how you will build community and change lives. Self-assessment is the first action requirement of leadership: the constant resharpening, constant refocusing, never being really satisfied. And the time to do this is when you are successful. If you wait until things start to go down, then it’s very difficult.
We are creating tomorrow’s society of citizens through the social sector, through your nonprofit organization. And in that society, everybody is a leader, everybody is responsible, everybody acts. Therefore, mission and leadership are not just things to read about, to listen to; they are things to do something about. Self-assessment can and should convert good intentions and knowledge into effective action — not next year but tomorrow morning.