Advice from a Billionaire

Advice from a Billionaire

Peter Drucker and Mort Mandel, the then-CEO of electronics and auto-parts distributor Premier Industrial Corp., chewed over all sorts of topics—basic business strategy, the company’s approach to acquisitions, how to set priorities. But Drucker’s most valuable counsel centered on one subject: people.

“I asked him how we could make our company grow faster,” Mandel recalls. “He told me to put my best person on my biggest opportunity.”

Incredulous, Mandel pushed back. “If my best person is a dentist, would I put him in charge of running a brass foundry?” he asked Drucker.

Drucker didn’t waver. “Yes,” he replied. “Let me tell you what that dentist will do if he’s your best person. He’ll walk into that building, tour the plant and speak to the employees. He’ll immediately realize he doesn’t know anything about a brass foundry. But he’s going to get his people together and figure it out. He’ll try to find someone on that team who is qualified to run the plant. If he doesn’t come up with one, he’ll find the best foundry man in the country. The dentist will soon learn how to improve the leadership and the culture and reinforce the values.”

Drucker’s advice: identify extraordinary people and place them into your most crucial leadership roles—may sound simple. But few, if any, have ever executed on this principle better than Mandel, who with his two brothers scraped together $900 to launch Premier in 1940 and then sold it 56 years later for $2.8 billion. In between, Premier enjoyed an incredible run: After going public in 1960, the Cleveland-based company posted record earnings in 34 out of 36 years, all by delivering superior customer service.

His philosophy boils down to this: The most powerful forces in any enterprise are, far and away, the human beings—the people who build it, manage it, lead it and inspire it.

Do you agree with Drucker’s advice? Will you take it?