Often, I go into my archives to find articles or books that I haven’t looked at in a while as a refresher. In the archive is a collection of articles written by Peter Drucker for the Harvard Business Review. He wrote articles for the publication from the early 1960s all the way into the early 2000s. This column will focus on his article “How to Make People Decisions.” While Drucker spent his career advising global corporations, his insights are perhaps even more vital for our local economy, where a single bad hire can disrupt a small team and a single great one can define a decade of success.

Drucker’s premise was simple: "Executives spend more time on managing people and making people decisions than on anything else—and they should." Yet, he noted that only about a third of such decisions turn out to be truly successful. To improve our batting average here in the Hill Country, we can apply Drucker’s five-step rigorous process to our hiring and promotions:

1. Think Through the Assignment

Before looking at resumes, we must look at the job. In a small business, roles often evolve into a "catch-all." Drucker argued that "the job should be defined by the results it is expected to achieve." If you’re hiring a manager for a tasting room, is the primary goal inventory management or guest experience? They require different people. Don't hire for a title; hire for a specific mission.

2. Look at a Number of Qualified People

Drucker insisted on looking at three to five candidates. In a tight labor market like ours, it’s tempting to hire the first person who walks through the door with a pulse and a smile. However, without a baseline for comparison, you cannot judge excellence. Even if you have a "favorite" internal candidate, testing them against outside talent ensures you aren't just taking the path of least resistance.

3. Focus on Strengths

This is the most "Drucker" of his insights: Look for what a person can do, not what they cannot do. We often look for the "well-rounded" candidate, but Drucker argued that "strong people always have strong weaknesses." A brilliant chef might be terrible at paperwork. A meticulous bookkeeper might be shy with customers. If the job requires culinary genius, don't disqualify the candidate because their filing system is messy. Build on their strengths and find a way to cover their weaknesses.

4. Check the Track Record

Drucker was skeptical of "potential." He wanted to know what a person had actually accomplished. In a community as close-knit as Fredericksburg, word-of-mouth is our most powerful tool. When calling references, Drucker suggested asking: "What has this person done well?" and "What did they have to learn to do to get their results?" If they haven't performed in the past, they likely won't in the future.

5. The "First-Day" Conversation    

Once you’ve made the hire, the work isn't over. Drucker’s final step is the most neglected: making sure the new appointee understands the job. After three months, the owner should sit down with the new hire and ask, "What do you have to do now to be effective in this role?" This ensures the employee's focus aligns with the business's actual needs.

The Manager’s Responsibility

Perhaps the most "Texas-tough" part of Drucker’s philosophy is his view on failure. He believed that if a person is hired into a job and fails, it is rarely the employee’s fault—it is the manager’s fault for putting them in a position where they couldn't succeed.

"The executive who says, 'I made a mistake,' and starts the process over again is the one who eventually builds a high-performing organization," Drucker wrote.

As our local economy continues to grow and evolve, our biggest competitive advantage isn't just our German heritage or our beautiful scenery—it’s our people. By being as disciplined about our hiring as we are about our craft, we ensure that Fredericksburg remains not just a great place to visit, but a world-class place to work.