2. Information For Wealth Creation - Drucker “Enterprises are paid to create wealth not control costs” The Effective Executive Wealth creation requires four types of information: – Foundation Information – Productivity Information – Competence Information – Resource Allocation Information

3. Information For Wealth Creation - Drucker Foundation Information: – Cash Flow, liquidity projections, inventory levels, account receivables – When normal, don’t tell us much – When abnormal they represent a problem that needs fixing

4. Information For Wealth Creation - Drucker Productivity Information: – Deals with productivity of key resources – Need data on total factor productivity eg Benchmarking and Economic Value Added Analysis (EVA)

5. Information For Wealth Creation - Drucker Competence Information: – Core competencies of a company – Must keep track of orgs. and competitors’ performance – helps identify competencies. Drucker on CompetitionDrucker on Competition – Core competencies are different for each company, but every org. should be competent in Innovation CORE

6. Information For Wealth Creation - Drucker Resource Allocation Information: – Allocation of Scarce Resources: Capital and People – Advice from Drucker: Make your back room someone else's front room. Advice from Drucker: Make your back room someone else's front room. – Capital appropriations process: ROI, DPV, Cash Flow, Payback – use all 4 – Need to ask what will happen if project fails/succeeds and the repercussions

7. Information For Wealth Creation - Drucker Resource Allocation Information: – Performing people one of the scarcest resources – Yesterday's Worker Yesterday's Worker – Human resources need to be allocated as purposefully and thoughtfully as Capital

8. Information For Wealth Creation - Drucker Where the Results are: – The 4 kinds of information tell us about the current business. They inform and direct tactics – Decision Making is not desirable, it's just inevitable! Decision Making is not desirable, it's just inevitable! – Strategy needs info. about the environment – “Inside the organisation there are only cost centres. The only profit centre is a customer whose check hasn’t bounced”

9. Information Executives Need for Their Work - Drucker To produce the info they need, executives have to ask: – What info do I owe others? – What info do I need from others? – Drucker on Bosses Drucker on Bosses Information

10. Information Executives Need for Their Work - Drucker They have to: – Organise their information Drucker on Effective ExecutiveDrucker on Effective Executive – Have no surprises – Go outside the org. for information

11. Decisions and actions which affect pricing Decisions and actions which affect volume Decisions and actions which affect overhead orstructural cost Decision and actions which affect product or service cost Decisions and actions which affect asset turnover (Ward Fredericks)