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Peter Drucker on marketing: application and implications for libraries

Cynthia K. Robinson
George T. Harrell Health Sciences Library, Pennsylvania State University, Hershey, Pennsylvania, USA
Abstract
Purpose The purpose of this article is to discuss Peter Druckers theory of marketing in the context of strategic planning and change (innovation) in libraries. With the need for change and innovation accelerating within all types of libraries, it is increasingly important for libraries to adopt a marketing orientation, integrating a marketing plan into the overall strategic planning process. Design/methodology/approach This paper employs case study methodology to demonstrate one librarys attempt to integrate a marketing plan into the librarys overall strategic planning activity, using this process to move the library towards a marketing orientation. The paper also provides a viewpoint based on the authors experience and the teachings of Peter Drucker. Findings Libraries must adopt a marketing orientation in order to remain viable into the future. As Drucker stated, it is the customer who determines what a business is. It is imperative libraries understand what their customer values and needs in order to develop services and provide resources to meet these needs. Originality/value This paper examines Peter Druckers theory of business and marketing as it applies to libraries and highlights the systems framework called the Drucker Management System, described by Joseph Maciariello in his article Marketing and innovation in the Drucker Management System. Keywords Peter Drucker, Marketing, Health sciences libraries, Academic libraries, Marketing orientation, Strategic planning, Customer orientation Paper type Case study

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Received 22 July 2011 Accepted 1 August 2011

Marketing is the process through which economy is integrated into society to serve human needs (Drucker, 1958).

The Bottom Line: Managing library nances Vol. 25 No. 1, 2012 pp. 4-12 q Emerald Group Publishing Limited 0888-045X DOI 10.1108/08880451211229153

Introduction Peter Drucker is widely acknowledged as the father of modern management (Gunther, 2009; Webster, 2009). His landmark books The Practice of Management and the recently revised Management: Tasks, Responsibilities, Practices continue to be relevant today. Drucker was 95 when he passed away in November 2005. Over the course of his almost 70 year career his work inuenced individuals, businesses, both for-prot and not-for-prot, and the entire Japanese business establishment (Sullivan, 2005). Harvard Business Review published an issue commemorating his centennial in November 2009 underscoring the profound impact Peter F. Drucker has had and continues to have on the practice of management.

Druckers ideas permeate management and marketing literature; the concept of the customer as central to the purpose of business originated with Drucker. Drucker stated there is only one valid denition of business purpose: to create a customer. And because its purpose is to create a customer, the business enterprise has two basic functions: marketing and innovation (Drucker, 1954). To Drucker, marketing was synonymous with business; in Practice of Management he states Marketing is not only much broader than selling; it is not a specialized activity at all. It encompasses the entire business. It is the whole business seen from the point of view of its nal result, that is, from the customers point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise (Drucker, 1954). The second purpose of business, innovation, is essential for long-term viability. For a business, or a library, to continue to thrive into the future it is not necessary . . . to grow bigger; but it is necessary that it constantly grow better (Drucker and Maciariello, 2008). Innovation implies change, and all business, including libraries, must consider change both natural and acceptable (Drucker and Maciariello, 2008). Drucker also dened what he termed the theory of the business, the assumptions, ideas, and beliefs an organization is built on. He captured his denition of strategy, as it pertained to his theory of the business, in ve deceptively simple questions: (1) What is our business? (2) Who is the customer? (3) What is value to the customer? (4) What will our business be? (5) What should it be? (Drucker, 1954; Drucker and Maciariello, 2008). These ve questions are certainly applicable to libraries as they face ongoing changes while endeavoring to be both innovative and entrepreneurial. James Neal echoed these questions in his talk, Stop the madness: the Insanity of ROI and the need for new qualitative measures of Academic library success, at the 2011 ACRL Conference in Philadelphia, PA. I believe he is correct when he stated, Ultimately the academic library needs to be passionately focused on user expectations (Neal, 2011). It is the customer who decides what he or she values. Webster in his article Marketing is management, articulates Duckers denition of strategy, as matching management vision, company capabilities, and customer needs and wants through a series of choices with long-run survival and protability as objectives (Webster, 2009). Drucker himself dened long-range [strategic] planning as the continuous process of making present entrepreneurial (risk taking) decisions systematically and with the best possible knowledge of their futurity, organizing systematically the efforts needed to carry out these decisions, and measuring the results of these decisions against the expectations through organized, systematic feed-back (Drucker, 1959). Library literature is replete with discussions about the future of the library, new roles for librarians, and the need to market the library. As Savard, Parker et al., and Germano all addressed, marketing is often poorly understood and generally focuses on tactical approaches employing activities such as promotion, branding, public relations, advertising and sales rather than an overall strategic approach. (Germano, 2010; Parker et al., 2007; Sen, 2006) Librarians often conate marketing activities focused on

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the tactical with a true marketing orientation. Parker et al. and Sen attempt to explore librarian attitudes towards marketing and their understanding of market or marketing orientation in their respective papers, Sen using a focus group approach, with Parker employing a survey. Unfortunately the terms marketing orientation and market orientation tend to be used interchangeably in the literature as Parker et al., discussed. In this context I am using the term marketing orientation, applied strategically and dened as the adoption by an organization of a customer focus (Parker et al., 2007) or a clear understanding of the customers, the organization and the wider business environment(Sen, 2006). Both Parker and Sen conclude librarians generally have a positive attitude towards marketing, however some negative attitudes still linger and there is not always a clear understanding of marketing in the broader context. Libraries have a signicant challenge ahead of them, it will be necessary to develop a culture of marketing, a marketing orientation, within libraries in order to ensure long term sustainability. As Savard stated in her paper Librarians and marketing: an ambiguous relationship: We have to improve our relationship with marketing in order to be able to face the future. Indeed, without sound marketing practices, one can only speculate about the role of librarians in tomorrows information society (Savard, 1996). The George T. Harrell Health Sciences Library Since 2005 the Harrell HSL has been engaged in a sustained period of almost continuous change. In July of 2005 the Harrell HSL was folded into the overall University Libraries administrative structure with the Director reporting to the Dean of University Libraries while also retaining reporting lines to the Vice Dean for Educational Affairs at the Penn State College of Medicine. This reorganization resulted in a dual reporting structure. The librarys cost center remained with the College of Medicine (COM). Prior to this change, the library was being managed by the Chief Information Ofcer (CIO). With the reorganization, an interim library director was named. In August 2007 a permanent library director was hired. In 2005 a decision was also made, by senior leadership within the COM, to repurpose the second oor of the existing library to accommodate a simulation laboratory. Approximately 10,000 sq./ft. of space, housing 14,000 linear feet of bound journal volumes was annexed for this purpose. This resulted in a massive journal evaluation project with approximately 90,000 bound journal volumes being discarded or relocated over an 18-month period of time beginning in the fall of 2007. Journal backles were acquired to replace print volumes effectively transforming the Harrell HSL into a digital library. Planning for the construction of the simulation laboratory and renovation of remaining library space began in 2007, with construction commencing winter of 2009. The new Library Director played a critical role in this effort (Robinson, 2009). The Penn State Hershey Clinical Simulation Center opened in January 2010. Renovation of the remaining library space, approximately 22,000 sq/ft, was completed later that year creating a learning commons. The newly appointed Library Director began a number of new initiatives; chief among them was strategic planning. As a component of this plan, the library dened a new mission and vision along with a set of core values. The library employed an iterative planning process, including all library faculty and staff in the process. Using the SWOT technique to identify strengths, weaknesses, opportunities and threats

faculty and staff crafted a ve-year strategic plan. In addition, the library aligned the strategic plan with both the Penn State Hershey institutional strategic plan and the University Libraries strategic plan. The Harrell Health Sciences Library Strategic Plan, 2008/2009-2012/2013 was designed to help the library navigate through a period of intense change and disruption. During her rst two years in the position the Library Director also put in place a team based structure eliminating silos, attened the organizational structure, reviewed all existing staff and faculty position descriptions, began the redesign of the librarys website, and began the process of integrating the library more closely with the COM. The strategic plan was instrumental in moving these initiatives forward. Beginning in June 2009 the library began experiencing a series of retirements and resignations. Within a year eight individuals left, representing half the librarys staff of 16. Of these eight, four retired, two accepted promotions within Penn State, and two resigned. The retirements were not unexpected given age and length of service. With staff turnover came opportunity. Given the profound changes occurring, both internally and externally, the library made the deliberate decision to not ll positions rooted in the past. All positions were reviewed, some eliminated and new positions developed. A new organizational structure was put in place reecting the new direction the Harrell HSL is taking (see Appendix 1 (Figure A1)). Hiring was completed in May 2011 when the Librarian for Knowledge Integration & Emerging Technologies came on board. With these changes came the need to update the librarys strategic plan and at the same time recognize the need for the library to adopt a marketing orientation as it develops a new updated plan. Although the current strategic plan includes tactical marketing strategies, it does not include a fully developed marketing plan. With a full complement of faculty and staff in place the Harrell HSL initiated a new strategic planning process in May 2011. Strategic planning and marketing Libraries have traditionally viewed customer service as a primary function; however, how libraries understand customers and service going forward will determine future success or failure. Quoting Drucker, The aim of Marketing is to know and understand the customer so well that the product or service ts him and sells itself (Drucker and Maciariello, 2008). The George T. Harrell Health Sciences Library at Penn State University (Harrell HSL) is in the process of integrating a Marketing Plan into the overall strategic planning process in order to cultivate and embrace a culture of marketing and assessment. Moving towards a marketing orientation is a learning process and implies culture change. As noted earlier, marketing in libraries often takes a tactical approach rather than a strategic approach. With the current strategic planning process underway, the Harrell Health Sciences Library will take the rst steps toward a true marketing orientation. The mission and vision articulated in the current Harrell HSL plan addresses Druckers rst question, what is our business? The library will continue to revisit its mission and vision as we progress through the strategic planning process. As Maciariello points out an organizations mission is its theory of business and all theories of business eventually become obsolete. He further states, as a result, one competency that all organizations must have is the competency of innovation (Maciariello, 2009). Although the current plan was developed with a customer focus,

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the process did not expressly answer questions 2-5: Who is the customer? What is value to the customer? What will our business be? And what should it be? During the current process we will attempt to better answer these questions through assessment and evaluation in order to more effectively anticipate the future. The library will also build assessment into the updated plan in order to measure the effectiveness of its strategies and tactics (objectives), essentially creating a feedback loop. The Harrell HSL is currently engaged in the evaluative phase of the planning process. Library Faculty is working with Penn State Universities Ofce of Planning and Institutional Assessment to develop both survey instruments and focus group questions. The library will solicit feedback from its primary user groups, including, physicians, residents, medical students, graduate students, basic researchers, nursing, administration, and staff. The information obtained will be used to update the mission and vision if necessary, and to formulate strategies focused on current and future needs. The library will also use the updated SWOT analysis to inform the process. Library faculty and staff are also reviewing documents relevant to the future of libraries in general and academic libraries in particular. These include the Horizon Report, The Value of Academic Libraries: A Comprehensive Research Review and Report, Taiga (see www.taiga-forum.org/home), the Ithaka Reports and others (see Appendix 2). As Maciariello states, formulating the mission of an organization requires executives to look beyond the walls of the organization to the external environment (Maciariello, 2009). Libraries must understand both their internal environment, as well as the external environment, in order to recognize emerging trends, impending changes, issues and problems, and opportunities. Maciariello outlines a systems framework in his paper Marketing and innovation in the Drucker management system that clearly maps out the process for strategic planning and Management by Objectives (MBO). Management by objectives embodies a process that supports and facilitates teamwork (Maciariello, 2009). In this systems framework, Druckers ve questions dene an organizations mission and drive innovation. The mission converts into strategies, which are then broken down into tactics or objectives. Objectives become the vehicle for the implementation of strategy (Maciariello, 2009). These objectives determine organizational structure, work assignments, performance evaluation, assessment and validation. At the heart of all of this, of course, is marketing and innovation. The end product of this process will be an updated Harrell Health Sciences Library Strategic Plan that will incorporate both a marketing plan and a technology plan. The library will also have embarked on a process of culture change aimed at developing a marketing orientation integrated throughout the library organization. The projected completion date for the strategic plan is December 2011. Conclusion With the need for change and innovation accelerating within all types of libraries it is increasingly important for libraries to adopt a marketing orientation, integrating a marketing plan into the overall strategic planning process. Libraries theory of the business is changing, we need to ask ourselves what will the library be and what should it be? I believe this is what James Neal was attempting to address in what he termed his polemic and call to action (Neal, 2011). We need to focus on our users, really ask the questions Neal posed in his talk. Of course, none of this is easy. As

librarians we will need to acquire a skill set that may seem foreign. However, as Savard points out libraries are facing increasing completion and it will be crucial to focus on our users. Throughout this paper I have used the language of business, the language of Peter Drucker. Quoting Drucker, Any organization that fullls itself through marketing a product or a service, is a business. Libraries may not necessarily be in the business of generating a prot or selling a product, but we do have a valuable product we deliver to our user groups, it is both the access we provide to our extensive information resources and the service that supports education, research, the community, and in Harrell HSLs case, clinical care. In other words, what is the value we bring to our patrons? How we respond to this will dictate the direction we take. Rosabeth Moss Kanter did an excellent job summarizing Druckers beliefs that he repeated and reinforced throughout his career in her article in the HBR Drucker Centennial issue:
Management should be a profession, and executives and managers should remember that their primary job is to look out for the long-term health of their organizations. That means looking outside their walls at society and taking responsibility for well-being, not just wealth. Knowledge workers cannot be controlled; they must be motivated. Such employees must see a purpose more meaningful than personal prot. When the game is only about money, disparities in society get worse as the favored grab the largest share. Not-for-prot organizations are necessary ingredients in producing a good society, one in which businesses can thrive. Civil society works to complement government in meeting human needs (Kanter, 2009).

Peter Drucker on marketing

This paper reports on a strategic planning process that is currently taking place within the George T. Harrell Health Sciences Library at Penn State University. The activities underway are a deliberate attempt to begin the process of integrating a true marketing culture within the Harrell HSL. By doing so, I believe, we can help insure the long-term viability and sustainability of the library. The author intends to follow-up in the future.
References Drucker, P.F. (1954), The Practice of Management, HarperCollins, Kindle edition, New York, NY, p. 416. Drucker, P.F. (1958), Marketing and economic development, Journal of Marketing, Vol. 22 No. 3, pp. 252-9. Drucker, P.F. (1959), Long-range planning: challenge to management science, Management Science, Vol. 5 No. 3, pp. 238-49. Drucker, P.F. and Maciariello, J. (2008), Management, revised edition, HarperCollins, New York, NY, p. 658. Germano, M.A. (2010), Narrative-based library marketing: selling your librarys value during tough economic times, The Bottom Line: Managing Library Finances, Vol. 23 No. 1, pp. 5-17. Gunther, R.E. (2009), Peter Drucker the grandfather of marketing: an interview with Dr Philip Kotler, Journal of the Academy of Marketing Science, Vol. 37 No. 1, pp. 17-19. Kanter, R.M. (2009), What would Peter say?, Harvard Business Review, November, pp. 65-70.

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Maciariello, J. (2009), Marketing and innovation in the Drucker Management System, Journal of the Academy of Marketing Science, Vol. 37 No. 1, pp. 35-43. Neal, J.G. (2011), Stop the madness: the insanity of ROI and the need for new qualitative measures of academic library success, available at: www.ala.org/ala/mgrps/divs/acrl/ events/national/2011/papers/stop_the_madness.pdf Parker, R., Kaufman-Scarborough, C. and Parker, J.C. (2007), Libraries in transition to a marketing orientation: are librarians attitudes a barrier?, International Journal of Nonprot and Voluntary Sector Marketing, Vol. 12, pp. 320-37. Robinson, C.K. (2009), Library space in the digital age: the pressure is on, The Bottom Line: Managing Library Finances, Vol. 22 No. 1, pp. 5-8. Savard, R. (1996), Librarians and marketing: an ambiguous relationship, The New Review of Information and Library Research, Vol. 2, pp. 41-55. Sen, B. (2006), Market orientation: a concept for health libraries, Health Information and Libraries Journal, Vol. 23, pp. 23-31. Sullivan, P. (2005), Management visionary Peter Drucker dies, Washington Post, available at: /www.washingtonpost.com/wp-dyn/content/article/2005/11/11/AR2005111101938.html Webster, F.E. Jr (2009), Marketing IS management: the wisdom of Peter Drucker, Journal of the Academy of Marketing Science, Vol. 37 No. 1, pp. 20-7.

Appendix 1

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Figure A1. Harrell HSL organizational structure 2011

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Appendix 2. Further reading Association of College and Research Libraries (2010), Value of Academic Libraries: A Comprehensive Research Review and Report, researched by Megan Oakleaf, Association of College and Research Libraries, Chicago, IL. Deiss, K. and Petrowski, M.J. (2009), ACRL 2009 Strategic Thinking Guide for Academic Librarians in the New Economy, Association of College & Research Libraries, Chicago, IL, available at: www.ala.org/ala/mgrps/divs/acrl/issues/value/acrlguide09.pdf Housewright, R. and Schonfeld, R. (2008), Ithakas 2006 Studies of key stakeholders in the digital transformation in higher education, available at: www.ithaka.org/ithaka-s-r/ research/Ithakas%202006%20Studies%20of%20Key%20Stakeholders%20in%20the% 20Digital%20Transformation%20in%20Higher%20Education.pdf Johnson, L., Levine, A. and Smith, R. (2009), The 2009 Horizon Report, The New Media Consortium, Austin, TX. Johnson, L., Levine, A., Smith, R. and Stone, S. (2010), The 2010 Horizon Report, The New Media Consortium, Austin, TX. Johnson, L., Smith, R., Willis, H., Levine, A. and Haywood, K. (2011), The 2011 Horizon Report, The New Media Consortium, Austin, TX. Long, M. and Schonfeld, R. (2010), Ithaka SR Library Survey 2010: insights from US academic library directors, available at: www.ithaka.org/ithaka-s-r/research/ithaka-s-r-librarysurvey-2010/insights-from-us-academic-library-directors.pdf Schonfeld, R. and Housewright, R. (2010), Faculty Survey 2009: key strategic insights for libraries, publishers, and societies, available at: www.ithaka.org/ithaka-s-r/research/ faculty-surveys-2000-2009/Faculty%20Study%202009.pdf Taiga Forum Provocative Statements: 2006, 2009 and 2011, available at www.taiga-forum.org/ Corresponding author Cynthia K. Robinson can be contacted at: crobinson1@hmc.psu.edu

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