The Effective Executive by Peter Drucker.

I find this a fascinating book, full of insight and strong statements. Note however that when the book was written, it was traditional and accepted to use he/him for all references. In addition, I wonder if when he wrote the book the vast majority of executives weren’t male. I found that this made the book somewhat hard to read, but I was able to push through it for the value. I hope you find the same. I chose not to edit Peter’s text, but instead to put this disclaimer at the top. ~Mark, 2021-Feb-16

Author’s Preface

An effective executive is not “talent,” let alone “genius.” The effective executive follows practices that can be learned and must be learned… The Effective Executive is both a concise blueprint for effectiveness as an executive within an organization and a practical guide to managing oneself for performance and achievement, whether within an organization or on one’s own. And every organization, whatever its specific function, depends for its performance (and indeed its survival) on the effectiveness of its executives.

Preface

That one can truly manage other people is by no means adequately proven. But one can always manage oneself. Indeed, executives who do not manage themselves for effectiveness cannot possibly expect to manage their associates and subordinates. Management is largely by example. Executives who do not know how to make themselves effective in their own job and work set the wrong example.

Chapter 1

  • …the executive is, first of all, expected to get the right things done.
  • Intelligence, imagination, and knowledge are essential resources, but only effectiveness converts them into results.
  • Who is an executive? Every knowledge worker in modern organization is an “executive” if, by virtue of his position or knowledge, he is responsible for a contribution that materially affects the capacity of the organization to perform and to obtain results.
  • For the knowledge organization needs both “managers” and “individual professional contributors” in positions of responsibility, decision-making, and authority.
  • Knowledge work is not defined by quantity. Neither is knowledge work defined by its costs. Knowledge work is defined by its results. And for these, the size of the group and the magnitude of the managerial job are not even symptoms.
  • If the executive lets the flow of events determine what he does, what he works on, and what he takes seriously, he will fritter himself away.
  • Effectiveness, in other words, is a habit; that is, a complex of practices. And practices can always be learned. Practices are simple, deceptively so; even a seven-year-old has no difficulty in understanding a practice. But practices are always exceedingly hard to do well. They have to be acquired.

The five 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 of 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 judgment 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

  • Time is also a unique resource. Of the other major resources, money is actually quite plentiful. We long ago should have learned that it is the demand for capital, rather than the supply thereof, which sets the limit to economic growth and activity. People — the third limiting resource — one can hire, though one can rarely hire enough good people. But one cannot rent, hire, buy, or otherwise obtain more time.
  • Wherever knowledge workers perform well in large organizations, senior executives take time out, on a regular schedule, to sit down with them, sometimes all the way down to green juniors, and ask: “What should we at the head of this organization know about your work? What do you want to tell me regarding this organization? Where do you see opportunities we do not exploit? Where do you see dangers to which we are still blind? And, all together, what do you want to know from me about the organization?”
  • I have never seen an executive confronted with his time record who did not rapidly acquire the habit of pushing at other people everything that he need not do personally. The first look at the time record makes it abundantly clear that there just is not time enough to do the things the executive himself considers important, himself wants to do, and is himself committed to doing. The only way he can get to the important things is by pushing on others anything that can be done by them at all.
  • Effective executives have learned to ask systematically and without coyness: “What do I do that wastes your time without contributing to your effectiveness?” To ask this question, and to ask it without being afraid of the truth, is a mark of the effective executive.
  • A work force may, indeed, be too small for the task. And the work then suffers, if it gets done at all. But this is not the rule. Much more common is the work force that is too big for effectiveness, the work force that spends, therefore, an increasing amount of its time “interacting” rather than working. There is a fairly reliable symptom of overstaffing. If the senior people in the group — and of course the manager in particular — spend more than a small fraction of their time, maybe one tenth, on “problems of human relations,” on feuds and frictions, on jurisdictional disputes and questions of cooperation, and so on, then the work force is almost certainly too large. People get into each other’s way. People have become an impediment to performance, rather than the means thereto. In a lean organization people have room to move without colliding with one another and can do their work without having to explain it all the time.
  • As a rule, meetings should never be allowed to become the main demand on an executive’s time. Too many meetings always bespeak poor structure of jobs and the wrong organizational components. Too many meetings signify that work that should be in one job or in one component is spread over several jobs or several components. They signify that responsibility is diffused and that information is not addressed to the people who need it.
  • Senior executives rarely have as much as one quarter of their time truly at their disposal and available for the important matters, the matters that contribute, the matters they are being paid for.

Chapter 3

  • For every organization needs performance in three major areas: It needs direct results; building of values and their reaffirmation; and building and developing people for tomorrow.
  • An executive’s focus on contribution by itself is a powerful force in developing people. People adjust to the level of the demands made on them. The executive who sets his sights on contribution, raises the sights and standards of everyone with whom he works.
  • “What can I and no one else do which, if done really well, would make a real difference to this company?” The one, truly significant contribution, he concluded, would be the development of tomorrow’s managers. The company had prided itself for many years on its executive development policies. “But,” the new chief executive argued, “a policy does nothing by itself. My contribution is to make sure that this actually gets done.”
  • Effective executives know this. For they are almost imperceptibly led by their upward orientation into finding out what the other fellow needs, what the other fellow sees, and what the other fellow understands. Effective executives find themselves asking other people in the organization, their superiors, their subordinates, but above all, their colleagues in other areas: “What contribution from me do you require to make your contribution to the organization? When do you need this, how do you need it, and in what form?”

Chapter 4

  • Whoever tries to place a man or staff an organization to avoid weakness will end up at best with mediocrity. The idea that there are “well-rounded” people, people who have only strengths and no weaknesses (whether the term used is the “whole man,” the “mature personality,” the “well-adjusted personality,” or the “generalist”) is a prescription for mediocrity if not for incompetence. Strong people always have strong weaknesses too.
  • Conversely, it is the duty of the executive to remove ruthlessly anyone — and especially any manager — who consistently fails to perform with high distinction. To let such a man stay on corrupts the others. It is grossly unfair to the whole organization. It is grossly unfair to his subordinates who are deprived by their superior’s inadequacy of opportunities for achievement and recognition. Above all, it is senseless cruelty to the man himself. He knows that he is inadequate whether he admits it to himself or not.

Chapter 5

  • If there is any one “secret” of effectiveness, it is concentration. Effective executives do first things first and they do one thing at a time.
  • Any analysis of executive contributions comes up with an embarrassing richness of important tasks; any analysis of executives’ time discloses an embarrassing scarcity of time available for the work that really contributes. No matter how well an executive manages his time, the greater part of it will still not be his own. Therefore, there is always a time deficit.
  • To get even that half-day or those two weeks of really productive time requires self-discipline and an iron determination to say “No.”
  • The alternative — to “hire in” new people for new tasks — is too risky. One hires new people to expand on already established and smoothly running activity. But one starts something new with people of tested and proven strength, that is, with veterans. Every new task is such a gamble — even if other people have done the same job many times before — that an experienced and effective executive will not, if humanly possible, add to it the additional gamble of hiring an outsider to take charge. He has learned the hard way how many men who looked like geniuses when they worked elsewhere show up as miserable failures six months after they have started working “for us.”
  • If the pressures rather than the executive are allowed to make the decision, the important tasks will predictably be sacrificed. Typically, there will then be no time for the most time-consuming part of any task, the conversion of decision into action. No task is completed until it has become part of organizational action and behavior. This almost always means that no task is completed unless other people have taken it on as their own, have accepted new ways of doing old things or the necessity for doing something new, and have otherwise made the executive’s “completed” project their own daily routine. If this is slighted because there is no time, then all the work and effort have been for nothing. Yet this is the invariable result of the executive’s failure to concentrate and to impose priorities.
  • Courage rather than analysis dictates the truly important rules for identifying priorities: Pick the future as against the past; Focus on opportunity rather than on problem; Choose your own direction — rather than climb on the bandwagon; and Aim high, aim for something that will make a difference, rather than for something that is “safe” and easy to do.
  • Concentration — that is, the courage to impose on time and events his own decision as to what really matters and comes first — is the executive’s only hope of becoming the master of time and events instead of their whipping boy.

Chapter 6

  • “Our business is service” became the Bell commitment as soon as Vail took over. At the time, shortly after the turn of the century, this was heresy. But Vail was not content to preach that it was the business of the company to give service, and that it was the job of management to make service possible and profitable. He saw to it that the yardsticks throughout the system by which managers and their operations were judged, measured service fulfillment rather than profit performance. Managers are responsible for service results. It is then the job of top management to organize and finance the company so as to make the best service also result in optimal financial rewards.
  • In fact, no decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility. Until then, there are only good intentions. This is the trouble with so many policy statements, especially of business: They contain no action commitment. To carry them out is no one’s specific work and responsibility. No wonder that the people in the organization tend to view these statements cynically if not as declarations of what top management is really not going to do.
  • To go and look for oneself is also the best, if not the only, way to test whether the assumptions on which a decision had been made are still valid or whether they are becoming obsolete and need to be thought through again. And one always has to expect the assumptions to become obsolete sooner or later. Reality never stands still very long. Failure to go out and look is the typical reason for persisting in a course of action long after it has ceased to be appropriate or even rational. This is true for business decisions as well as for governmental policies.

Chapter 7

  • The effective executive encourages opinions. But he insists that the people who voice them also think through what it is that the “experiment” — that is, the testing of the opinion against reality — would have to show. The effective executive, therefore, asks: “What do we have to know to test the validity of this hypothesis?” “What would the facts have to be to make this opinion tenable?” And he makes it a habit — in himself and in the people with whom he works — to think through and spell out what needs to be looked at, studied, and tested. He insists that people who voice an opinion also take responsibility for defining what factual findings can be expected and should be looked for.
  • Decisions of the kind the executive has to make are not made well by acclamation. They are made well only if based on the clash of conflicting views, the dialogue between different points of view, the choice between different judgments. The first rule in decision-making is that one does not make a decision unless there is disagreement.
  • Effective executives know, of course, that there are fools around and that there are mischief-makers. But they do not assume that the man who disagrees with what they themselves see as clear and obvious is, therefore, either a fool or a knave. They know that unless proven otherwise, the dissenter has to be assumed to be reasonably intelligent and reasonably fair-minded. Therefore, it has to be assumed that he has reached his so obviously wrong conclusion because he sees a different reality and is concerned with a different problem. The effective executive, therefore, always asks: “What does this fellow have to see if his position were, after all, tenable, rational, intelligent?” The effective executive is concerned first with understanding. Only then does he even think about who is right and who is wrong.
  • No matter how high his emotions run, no matter how certain he is that the other side is completely wrong and has no case at all, the executive who wants to make the right decision forces himself to see opposition as his means to think through the alternatives. He uses conflict of opinion as his tool to make sure all major aspects of an important matter are looked at carefully.
  • Executives are not paid for doing things they like to do. They are paid for getting the right things done — most of all in their specific task, the making of effective decisions.
  • The sooner operating managers learn to make decisions as genuine judgments on risk and uncertainty, the sooner we will overcome one of the basic weaknesses of large organization — the absence of any training and testing for the decision-making top positions. As long as we can handle the events on the operating level by adaptation rather than by thinking, by “feel” rather than by knowledge and analysis, operating people — in government, in the military, or in business — will be untrained, untried, and untested when, as top executives, they are first confronted with strategic decisions.

Conclusion

As executives work toward becoming effective, they raise the performance level of the whole organization. They raise the sights of people — their own as well as others. As a result, the organization not only becomes capable of doing better. It becomes capable of doing different things and of aspiring to different goals. Developing executive effectiveness challenges directions, goals, and purposes of the organization. It raises the eyes of its people from preoccupation with problems to a vision of opportunity, from concern with weakness to exploitation of strengths.