The Effective Executive

Physical Copy:

Audiobook:

By: Peter Drucker

Rating: B+

This book and the author are classics in the business book genre. I got this as a gift a few years back and lost it in a move. I found it recently and had to see what the classic was about.

Summary

Effective Executives follow these 8 practices:

• They ask, “What needs to be done?”
• They ask, “What is right for the company?”
• They develop action plans.
• They take responsibility for decisions.
• They take responsibility for communicating.
• They are focused on opportunities rather than problems.
• They run productive meetings.
• They think and say “we” rather than “I.”

What needs to be done?

They concentrate on one task if at all possible. If they are among those people - a sizable minority - who work best with a change of pace in their working day, they pick two tasks.

However, after completing the original top-priority task, the executive resets priorities rather than moving on to number two from the original list. He asks, “What must be done now?” This generally results in new and different priorities.

Is this the right thing for the company?

They know that a decision that isn’t right for the company will ultimately not be right for any of the stakeholders.

Action Plans

When they translate plans into action, executives need to pay particular attention to decision-making, communication, opportunities, and meetings.

Take Responsibility for decisions

A decision has not been made until people know:

• The name of the person accountable for carrying it out;
• The deadline;
• The names of the people who will be affected by the decision and therefore have to know about, understand, and approve it or at least not be strongly opposed to it; and
• The names of the people who have to be informed of the decision, even if they are not directly affected by it.

Take responsibility for communicating

Still, far too many executives behave as if information and its flow were the job of the information specialist - for example, the accountant. As a result, they get an enormous amount of data they do not need and cannot use, but little of the information they do need. The best way around this problem is for each executive to identify the information he needs, ask for it, and keep pushing until he gets it.

Focus on opportunities

Effective executives put their best people on opportunities rather than on problems. One way to staff for opportunities is to ask each member of the management group to prepare two lists every six months - a list of opportunities for the entire company and a list of the best-performing people throughout the company.

Chapter 1: Effectiveness Can Be Learned

To be effective is the job of the executive. “To effect” and “to execute” are near-synonyms.

The executive is expected to get the right things done.

High intelligence is common enough among executives. Imagination is far from rare. The level of knowledge tends to be high. But there seems to be little correlation between a man’s effectiveness and his intelligence, his imagination, or his knowledge.

Up until recent times, the major problem of organization was efficiency in the performance of the manual worker who did what he had been told to do. 

Knowledge workers were not predominant in organizations. That has changed.

Who is an Executive?

An executive must make decisions; he cannot just carry out orders. He must take responsibility for his contribution. And he is supposed, by virtue of his knowledge, to be better equipped to make the right decision than anyone else.

One of the weaknesses of young, highly educated people today - whether in business, medicine, or government - is that they are satisfied to be versed in one narrow specialty and affect a contempt for the other areas. One need not know in detail what to do with “human relations” as an accountant, or how to promote a new branded product if an engineer. But one has a responsibility to know at least what these areas are about, why they are around, and what they are trying to do.

What all effective executives have in common is the practices that make effective whatever they have and whatever they are. And these practices are the same, whether the effective executive works in a business or in a government agency, as hospital administrator, or as a university dean.

The 5 Habits of the Effective Executive:

1. Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control.

2. Effective executives focus on outward contribution. They gear their efforts to results rather than to work. They start out with the question, “What results are expected of me?” rather than with the work to be done, let alone with its techniques and tools.

3. Effective executives build on strengths - their own strengths, the strengths or their superiors, colleagues, and subordinates; and on the strengths in the situation, that is, on what they can do. They do not build on weakness. They do not start out with the things they cannot do.

4. Effective executives concentrate on the few major areas where superior performance will produce outstanding results. They force themselves to set priorities and stay with their priority decisions. They know that they have no choice but to do first things first - and second things not at all. The alternative is to get nothing done.

5. Effective executives, finally, make effective decisions. They know that this is, above all, a matter of system - of the right steps in the right sequence. They know that an effective decision is always a judgement based on “dissenting opinions” rather than on “consensus on the facts.” And they know that to make many decisions fast means to make the wrong decisions. What is needed are few, but fundamental decisions. What is needed is the right strategy rather than razzle-dazzle tactics.

Chapter 2 - Know They Time

People must feel that “we have all the time in the world.” This actually means that you get a great deal done fast. It also means that you have to make available one large chunk of time without much interruption.

Systematic time management is therefore the next step.

1. First, identify and eliminate the things that don’t need to be done, the things that are purely a waste of time without any results whatsoever. To find these time-wastes, you look at all of your activities and ask: “What would happen if this were not done at all?” And if the answer is, “Nothing would happen,” then obviously the conclusion is to stop doing it.
2. The next question is: “Which of the activities on my time log could be done by somebody else just as well, if not better?”
3. A common cause of time-waste is largely under the executive’s control and can be eliminated by him. That is the time of others he himself wastes. Ask other people. “What do I do that wastes your time without contributing to your effectiveness?”

Common Time-Wastes

1. The recurrent “crisis,” the crisis that comes back year after year. This time-waster is because of a lack of system or documented procedure.
2. Overstaffing
3. Lack of organization. Its symptom is an excess of meetings.
4. Inaccurate information. Even worse, but equally common, is information in the wrong form.

Chapter 3: What Can I Contribute?

4 Basic Requirements for Effective Human Relations:

1. Communications
2. Teamwork
3. Self-development
4. Development of others

Communications

Executives who take responsibility for contribution in their own work will as a rule demand that their subordinates take responsibility too. They will tend to ask their men: “What are the contributions for which this organization and I, your superior, should hold you accountable? What should we expect of you? What is the best utilization of your knowledge and your ability?”

Teamwork

Who has to use my output for it to become effective?

Focus on upward contribution will not, by itself, provide the organizational solution. It will, however, contribute understanding of the task and communications to make imperfect organizations perform.

Self-Development

What self-development do I need? What knowledge and skill do I have to acquire to make the contribution I should be making? What strengths do I have to put to work? What standards do I have to set myself?

Stimulates others to develop themselves

The Effective Meeting

Effective executives know what they expect to get out of a meeting.

They ask, “Why are we having this meeting? Do we want a decision, do we want to inform, or do we want to make clear to ourselves what we should be doing?”

Chapter 4: Making Strength Productive

To achieve results, one has to use all the available strengths - the strengths of associates, the strengths of the superior, and one’s own strengths.

The question is never “What can a man not do?” The question is always “What can he do uncommonly well?”

How then do effective executives staff for strength without stumbling into the opposite trap of building jobs to suit personality?

1. Jobs are not created by nature or by God. 

Any job that has defeated two or three men in succession, even though each had performed well in his previous assignments, must be assumed unfit for human beings. It must be redesigned. First make sure that the job is well designed. If experience says otherwise, do not hunt for genius to do the impossible.

2. Make each Job demanding and big. 

The young knowledge worker whose job is too small to challenge and test his abilities either leaves or declines rapidly into premature middle-age, soured, cynical, and unproductive. Executives everywhere complain that many young men with fire in their bellies turn so soon into burned-out sticks. They have only themselves to blame: They quenched the fire by making the young man’s job too small.

3. Start with what a man can do rather than with what a job requires. 

Start out with a statement of the major contributions expected from a man in his past and present positions and a record of his performance against goals. Then ask 4 questions:

-What has he done well?

-What, therefore, is he likely to be able to do well?

-What does he have to learn or to acquire to be able to get the full benefit from his strength?

-Would I be willing to let my son work under this person?

4. To get strength one has to put up with weaknesses. 

Does this man have strength in one major area? Is this strength relevant to the task? If he achieves excellence in this one area, will it make a significant difference? If the answer is “yes,” make the hire.

To focus on weakness is not only foolish; it is irresponsible. A superior owes it to his organization to make the strength of every one of his subordinates as productive as it can be.

Make Yourself Productive

Look at your own performance and results to try and find a pattern. 

What are the things that I seem to be able to do with relative ease, that are hard for others to do? 

Ask about others “What can they do well?” rather than “What can they not do?”

You will soon be looking for strength out of habit.

Chapter 5: First Things First

The secret to those who “do so many things” and apparently so many difficult things: They do only one at a time. 

As a result, they need less time in the end than the rest of us.

Get rid of the things that cease to be productive. If we weren’t already doing X, would we start doing it today? If the answer is “no”, get rid of it.

A decision has to be made on which tasks are priority and which are less important.

The job is not to set priorities though. That is easy. Everybody can do that. The reason why so few executives concentrate is the difficulty of setting “posteriorities” - that is, deciding what tasks not to tackle - and sticking to that decision.

Chapter 6: The Elements of Decision-Making

Make decisions in a systematic process with clearly defined elements and in a distinct sequence of steps.

Effective executives do not make many decisions. They concentrate on only the important ones. They try to think through what is strategic and generic, rather than “solve problems.” They try to make the few important decisions on the highest level of conceptual understanding. They try to find the constants in a situation.

They want to know what the decision is all about and what the underlying realities are which it has to satisfy. They want impact rather than technique, they want to be sound rather than clever.

Elements of the effective decision process:

1. Is this a generic situation or an exception? Is this something that happens often? Or is this occurrence a unique event that needs to be dealt with as such?
2. Clear specifications as to what the decision has to accomplish. What are the objectives the decision has to reach? What are the minimum goals it has to attain?
3. First think through what is “right.” What is the solution that will fully satisfy the specifications? Then give attention to compromises and concessions that can be made and still yield an acceptable decision.
4. Build into the decision the action to carry it out.
5. Build in feedback to test the validity and effectiveness of the decision against the actual course of events.

Chapter 7: Effective Decisions

What do we have to know to test the validity of this hypothesis?

What would the facts have to be to make this opinion justifiable?

The effective decision-maker assumes that the traditional measurement is not the right measurement.

The best way to find the appropriate measurement is to go out and look for “feedback.”

Discussion and disagreement is needed to stimulate the imagination to make the best decision.

Start out with a commitment to find out why people disagree with you.

Conclusion:

Effective Executives:

1. Know where their time goes. 
2. Gear their efforts to results rather than to work. 
3. Build on strengths. They do not build on weakness.
4. Force themselves to set priorities and stay with their priority decisions. They say "no" to good opportunities and "yes" only to great ones.
5. Make effective decisions. 

Next Actions: 

Review my list of activities and determine if there are any that would have no consequence if I stopped doing them.

Ask each of my team members “what can you do with ease that is hard for others to do?”