What does it take to turn around a business in decline?  The stereotype is that it takes a heroic CEO (think Steve Jobs, Terry Semel, or even Arnold “CEO” of the State of California) to turn around a company in decline.  Not so says business management guru Peter Drucker.  Over his 65-year consulting career, Drucker says that many of the best CEOs he’s observed were not stereotypical leaders, but all of them had an eight-step plan for action.

The first two steps — asking what needs to be done and what’s best for the enterprise — gave them the knowledge they needed to proceed. They then developed action plans, took responsibility for their decisions and communicated those decisions to affected employees, and focused on opportunities rather than problems. The last two steps — running productive meetings and generating an inclusive rather than autocratic environment — ensured that the whole organization felt responsible and accountable. But the leaders didn’t stop there 8mdash; they also reviewed decisions periodically to ensure they hadn’t veered off course and that people were performing in their jobs as expected. “A systematic decision review can be a powerful tool for self-development, too. Very often it shows [executives”> that their decisions didn’t produce results because they didn’t put the right people on the job. Systematic decision review also shows executives their own weaknesses, particularly in the areas in which they are simply incompetent. In these areas, smart executives don’t make decisions or take actions. They delegate. Everyone has such areas; there’s no such thing as a universal genius.”

HBS Working Knowledge 21 June 2004