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The Effective Executive

According to Peter Drucker, there are eight practices that make effective executives:

  1. Ask “what needs to be done?”
  2. Ask “what is right for the company?”
  3. Develop action plans
  4. Take responsibility for decisions
  5. Take responsibility for communicating
  6. Focus on opportunities rather than problems
  7. Run productive meetings
  8. Think and say “we” rather than “I”

The first two give you the knowledge you need. The next four convert that knowledge into effective action. The last two gets your team to feel responsible and inspired.

In Effective Executive, Drucker explains what an effective executive is and how to become one. He believed being an effective executive could be learned and this book served as a handbook to do so.

“Executives are doers; they execute. Knowledge is useless to executives until it has been translated into deeds. But before springing into action, the executive needs to plan his course. He needs to think about desired results, probable restraints, future revisions, check-in points, and implications for how he’ll spend his time.”

What Makes an Executive Effective?

Instead of asking “what do I want to do?” ask “what has to be done?” This is crucial for managerial success.

The answer to this question “…almost always contains more than one urgent task. But effective executives do not splinter themselves. They concentrate on one task if at all possible. […] I have never encountered an executive who remains effective while tackling more than two tasks at a time. Hence, after asking what needs to be done, the effective executive sets priorities and sticks to them.”

Once you have the top initiatives prioritized, you need to choose which you are especially good at undertaking and then delegate the rest.

“Effective executives try to focus on jobs they’ll do especially well. They know that enterprises perform if top management performs—and don’t if it doesn’t.”

This is the beginning of your action plan

Your action plan is a prioritized list of initiatives and tasks for you and your team.

“The action plan is a statement of intentions rather than a commitment. It must not become a straitjacket. It should be revised often, because every success creates new opportunities. So does every failure.”

Develop the plan in a tool that makes it easy to check-in, provide updates, and move items around as it progresses. 

“Napoleon allegedly said that no successful battle ever followed its plan. Yet Napoleon also planned every one of his battles, far more meticulously than any earlier general had done. Without an action plan, the executive becomes a prisoner of events. And without check-ins to reexamine the plan as events unfold, the executive has no way of knowing which events really matter and which are only noise.”

And an action plan is useless unless it’s communicated and understood by your teams.

A decision has not really been made until people know:

  • who is accountable for delivering
  • the deadline
  • who and which teams are affected by the decision and therefore have to understand and approve it
  • who else should be informed of the decision, even if not directly affected

The action plan shouldn’t be given as an order from the top. Get and incorporate feedback. 

“Effective executives make sure that both their action plans and their information needs are understood. Specifically, this means that they share their plans with and ask for comments from all their colleagues—superiors, subordinates, and peers. At the same time, they let each person know what information they’ll need to get the job done. The information flow from subordinate to boss is usually what gets the most attention. But executives need to pay equal attention to peers’ and superiors’ information needs.”

Although problems stick out like a nail begging to be hammered, don’t make fixing a problem a top priority.

“Good executives focus on opportunities rather than problems. Problems have to be taken care of, of course; they must not be swept under the rug. But problem solving, however necessary, does not produce results. It prevents damage. Exploiting opportunities produces results.”

And when delegating tasks…

“Effective executives put their best people on opportunities rather than on problems.”

When Drucker recalls how an effective executive would run a meeting, he thinks back on an old colleague of his.

“At the beginning of a formal meeting, Sloan announced the meeting’s purpose. He then listened. He never took notes and he rarely spoke except to clarify a confusing point. At the end he summed up, thanked the participants, and left. Then he immediately wrote a short memo addressed to one attendee of the meeting. In that note, he summarized the discussion and its conclusions and spelled out any work assignment decided upon in the meeting (including a decision to hold another meeting on the subject or to study an issue). He specified the deadline and the executive who was to be accountable for the assignment. He sent a copy of the memo to everyone who’d been present at the meeting. It was through these memos—each a small masterpiece—that Sloan made himself into an outstandingly effective executive.”

Effectiveness Can Be Learned

It’s one thing to come up with a good idea. It’s another thing all together to execute that idea. 

“Brilliant men are often strikingly ineffectual; they fail to realize that the brilliant insight is not by itself achievement. […] Intelligence, imagination, and knowledge are essential resources, but only effectiveness converts them into results. By themselves, they only set limits to what can be attained.”

Effective Executive Are Masters of Their Time

Making the most out of your time and your team’s time is an essential first step to becoming effecting.

“[Effective executives] start with their time. And they do not start out with planning. They start by finding out where their time actually goes. Then they attempt to manage their time and to cut back unproductive demands on their time. Finally they consolidate their “discretionary” time into the largest possible continuing units.”

To master your time, follow this three step process:

  1. record your time
  2. manage your time
  3. consolidate your time

“The first step toward executive effectiveness is therefore to record actual time-use.”

Tips on Recording Time

  • Measure it in real-time, not later from memory
  • Recording time is a habit that can improve with constant effort
  • Figure out how to make time management systematic

Once you’ve been recording your time, you can analyze it and see what the time wasters are.

“To find these time-wastes, one asks of all activities in the time records: ‘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.”

Then determine which of the activities left can be delegated to some else. Now you can see how much time you have for important tasks.

“The executive who records and analyzes his time and then attempts to manage it can determine how much he has for his important tasks. How much time is there that is “discretionary,” that is, available for the big tasks that will really make a contribution? It is not going to be a great deal, no matter how ruthlessly the executive prunes time-wasters.”

Drucker discovered that it’s much more effective to block open time in as large of chunks as possible to get into deep work.

“The effective executive therefore knows that he has to consolidate his [open] time. He knows that he needs large chunks of time and that small driblets are no time at all. Even one quarter of the working day, if consolidated in large time units, is usually enough to get the important things done. But even three quarters of the working day are useless if they are only available as fifteen minutes here or half an hour there.”

“Time is the scarcest resource, and unless it is managed, nothing else can be managed. The analysis of one’s time, moreover, is the one easily accessible and yet systematic way to analyze one’s work and to think through what really matters in it.”

Executives are Also Responsible for Their Team’s Time

A common time waste is when the executive wastes his individual team members’ time. To overcome this, Drucker advises executives to directly as their team if and how he/she wastes their time:

“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.”

Tips on Managing Meetings

People like to be “in the know” and aware of what’s going on. Effective executives should let the whole team know when a meeting will take place and on what topic. Make it optional for people to join so they don’t feel left out. In any case, summarize the meeting notes, send to the team, and allow for questions and feedback.

“Meetings are by definition a concession to deficient organization for one either meets or one works. One cannot do both at the same time. In an ideally designed structure (which in a changing world is of course only a dream) there would be no meetings. Everybody would know what he needs to know to do his job. Everyone would have the resources available to him to do his job. We meet because people holding different jobs have to cooperate to get a specific task done. We meet because the knowledge and experience needed in a specific situation are not available in one head, but have to be pieced together out of the experience and knowledge of several people.”

Here’s how to run meetings effectively:

“The effective man always states at the outset of a meeting the specific purpose and contribution it is to achieve. He makes sure that the meeting addresses itself to this purpose. He does not allow a meeting called to inform to degenerate into a “bull session” in which everyone has bright ideas. But a meeting called by him to stimulate thinking and ideas also does not become simply a presentation on the part of one of the members, but is run to challenge and stimulate everybody in the room. He always, at the end of his meetings, goes back to the opening statement and relates the final conclusions to the original intent.”

The Effective Executive Focuses on Contribution

Effective executive are always focusing on contribution that makes a positive impact on the company’s performance.

“The man who focuses on efforts and who stresses his downward authority is a subordinate no matter how exalted his title and rank. But the man who focuses on contribution and who takes responsibility for results, no matter how junior, is in the most literal sense of the phrase, “top management.” He holds himself accountable for the performance of the whole.”

And to achieve that, you can’t only look inward to what you want to do and what you think you can do. 

“The focus on contribution turns the executive’s attention away from his own specialty, his own narrow skills, his own department, and toward the performance of the whole. It turns his attention to the outside, the only place where there are results. He is likely to have to think through what relationships his skills, his specialty, his function, or his department have to the entire organization and its purpose. He therefore will also come to think in terms of the customer, the client, or the patient, who is the ultimate reason for whatever the organization produces, whether it be economic goods, governmental policies, or health services. As a result, what he does and how he does it will be materially different.”

Three Areas of Contribution

  1. direct results
  2. value building and reaffirmation
  3. developing people

“If deprived of performance in any one of these areas, it will decay and die. All three therefore have to be built into the contribution of every executive. But their relative importance varies greatly with the personality and the position of the executive as well as with the needs of the organization.”

When you focus on contribution, it will help you fulfill the four basic requirements of effective human relations:

  • communications
  • teamwork
  • self-development
  • development of others

Helping others be successful:

“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?’”

Most of all, the biggest benefit of focusing on contribution is it counteracts chaos and highlights what’s important to spend time on versus what’s noise.

“The focus on contribution imposes an organizing principle. It imposes relevance on events. Focusing on contribution turns one of the inherent weaknesses of the executive’s situation—his dependence on other people, his being within the organization—into a source of strength. It creates a team. Finally, focusing on contribution fights the temptation to stay within the organization. It leads the executive—especially the top-level man—to lift his eyes from the inside of efforts, work, and relationships, to the outside; that is, to the results of the organization. It makes him try hard to have direct contact with the outside—whether markets and customers, patients in a community, or the various “publics” which are the outside of a government agency. To focus on contribution is to focus on effectiveness.”

Making Strengths Productive

Drucker makes the argument that it’s best to build on strengths to achieve results.

“The effective executive fills positions and promotes on the basis of what a man can do. He does not make staffing decisions to minimize weaknesses but to maximize strength.”

Staffing for Strength

There are two rules to staff for strengths:

  1. Look for strength in one major area. Ask, ‘what can this person do uncommonly well?”
  2. Make each job demanding with a deep scope so their strengths can produce significant results.

“…every people-decision is a gamble. By basing it on what a man can do, it becomes at least a rational gamble.”

Spotting Team Members Not Using Their Strengths

It’s your responsibility to spot and guide those on your team who aren’t making their strength’s productive.

“The ones who are enthusiastic and who, in turn, have results to show for their work, are the ones whose abilities are being challenged and used. Those that are deeply frustrated all say, in one way or another: ‘My abilities are not being put to use.’”

It’s your job to know when this is happening, correct it, and be ahead of it so it’s unlikely to occur again.

“The assertion that “somebody else will not let me do anything” should always be suspected as a cover-up for inertia. But even where the situation does set limitations—and everyone lives and works within rather stringent limitations—there are usually important, meaningful, pertinent things that can be done. The effective executive looks for them. If he starts out with the question: “What can I do?” he is almost certain to find that he can actually do much more than he has time and resources for.”

First Things First

Effectiveness is reached by focusing on one thing at time.

“Concentration is necessary precisely because the executive faces so many tasks clamoring to be done. For doing one thing at a time means doing it fast. The more one can concentrate time, effort, and resources, the greater the number and diversity of tasks one can actually perform.”

When you don’t focus on one thing at a time, you end up working harder and at the same time get nothing done.

“The people who get nothing done often work a great deal harder. In the first place, they underestimate the time for any one task. They always expect that everything will go right. Yet, as every executive knows, nothing ever goes right. The unexpected always happens—the unexpected is indeed the only thing one can confidently expect. And almost never is it a pleasant surprise. Effective executives therefore allow a fair margin of time beyond what is actually needed. In the second place, the typical (that is, the more or less ineffectual) executive tries to hurry—and that only puts him further behind. Effective executives do not race. They set an easy pace but keep going steadily. Finally, the typical executive tries to do several things at once. Therefore, he never has the minimum time quantum for any of the tasks in his program. If any one of them runs into trouble, his entire program collapses.”

Always stay updated to the current programs, activities, and tasks. If something isn’t worth doing anymore, it’s better to stop it sooner than later and refocus.

“Systematic sloughing off of the old is the one and only way to force the new. There is no lack of ideas in any organization I know. “Creativity” is not our problem. But few organizations ever get going on their own good ideas. Everybody is much too busy on the tasks of yesterday. Putting all programs and activities regularly on trial for their lives and getting rid of those that cannot prove their productivity work wonders in stimulating creativity even in the most hidebound bureaucracy.”

“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.”

The Elements of Decision-Making

Drucker has a lot to say on decision making and how to do it effecively. I found these two sections way too long and verbose for my attention span. Although, I really like the below quote about how data-driven decisions should be seen as having a degree of risk.

“Finding the appropriate measurement is thus not a mathematical exercise. It is a risk-taking judgment. Whenever one has to judge, one must have alternatives among which one can choose. A judgment in which one can only say “yes” or “no” is no judgment at all. Only if there are alternatives can one hope to get insight into what is truly at stake. Effective executives therefore insist on alternatives of measurement—so that they can choose the one appropriate one.”

Other Topics on Effectiveness that Stood Out to Me

Generalist vs specialist

“The only meaningful definition of a “generalist” is a specialist who can relate his own small area to the universe of knowledge. Maybe a few people have knowledge in more than a few small areas. But that does not make them generalists; it makes them specialists in several areas. And one can be just as bigoted in three areas as in one.”

Allowing people to take risks

“Executives also owe it to the organization and to their fellow workers not to tolerate nonperforming individuals in important jobs. It may not be the employees’ fault that they are underperforming, but even so, they have to be removed. People who have failed in a new job should be given the choice to go back to a job at their former level and salary. This option is rarely exercised; such people, as a rule, leave voluntarily, at least when their employers are U.S. firms. But the very existence of the option can have a powerful effect, encouraging people to leave safe, comfortable jobs and take risky new assignments. The organization’s performance depends on employees’ willingness to take such chances.”

Developing people

“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.”

“…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?” And then communication becomes possible, becomes indeed easy. Once the subordinate has thought through what contribution should be expected of him, the superior has, of course, both the right and the responsibility to judge the validity of the proposed contribution.”

“A superior has responsibility for the work of others. He also has power over the careers of others. Making strengths productive is therefore much more than an essential of effectiveness. It is a moral imperative, a responsibility of authority and position. 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. But even more does he owe it to the human beings over whom he exercises authority to help them get the most out of whatever strength they may have.”

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