The Effective Executive | Notes & Review

Posted on September 17, 2011


Peter Drucker. The Effective Executive. Butterworth-Heinemann, 2007. (167 pages)

Forward by Jim Collins

…replace the quest for success with the quest for contribution. The critical question is not, ‘How can you achieve?’ but ‘What can you contribute?’ (x)

Drucker’s own contribution was not a single idea, but rather an entire body of work that has one gigantic advantage: nearly all of it is essentially right. (x)

There are two ways to change the world: with the pen (the use of ideas) and with the sword (the use of power). (x)

For free society to function we must have high-performing, autonomous institutions spread throughout; without that, the only workable alternative is totalitarianism. (xi)

1 Effectiveness Can Be Learned

But there seems to be little correlation between a man’s effectiveness and his intelligence, his imagination or his knowledge. …Intelligence, imagination, and knowledge are essential resources, but only effectiveness converts them into results. (1)

For the authority of knowledge is surely as legitimate as the authority of position. (8)

The realities of the executive’s situation both demand effectiveness from him and make effectiveness exceedingly difficult to achieve. (9)

The executive in organization is in…four major realities over which he has essentially no control.

  1. The executive’s time tends to belong to everybody else.
  2. Executives are forced to keep on ‘operating’ unless they take positive action to change the reality in which they live and work.
  3. The third reality pushing the executive toward ineffectiveness is that he is within an organization. Organization is a means of multiplying the strength of an individual. (12)
  4. Finally, the executive is within an organization.

…the organization is an abstraction. …there are no results within the organization. All the results are on the outside. (13)

The higher up in the organization he goes, the more will his attention be drawn to problems and challenges of the inside rather than to events on the outside. (14)

An organization, a social artifact, is very different from a biological organism. Yet it stands under the law that governs the structure and size of animals and plants: the surface goes up with the square of the radius, but the mass grows with the cube. The larger the animal becomes, the more resources have to be devoted to the mass and to the internal tasks, to circulation and information, to the nervous system, and so on. (14)

An organization is not, like an animal, an end in itself, and successful by the mere act of perpetuating the species. An organization is an organ of society and fulfills itself by the contribution it makes to the outside environment. And yet the bigger and apparently more successful an organization gets to be, the more will inside events tend to engage the interests, the energies, and the abilities of the executive to the exclusion of his real tasks and his real effectiveness in the outside. (14-15)

The truly important events on the outside are not the trends. They are changes in the trends. (16)

The experience of the human race indicates strongly that the only person in abundant supply is the universal incompetent. We will therefore have to staff our organizations with people who at best excel in one of these abilities. (17)

…there is no ‘effective personality.’ (20)

What all these 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 university dean. (21)

Effectiveness, in other words is a habit, that is a complex of practices. (21) Practices one learns by practising and practising and practising again. (22)

There are essentially five practices — five such habits  of the mind that have to be acquired to be an effective executive,

  1. Effective executives know where their time goes.
  2. Effective executives focus on outward contributions.
  3. Effective executives build on strengths.
  4. Effective executives concentrate on the few major areas where superior performance will produce outstanding results.
  5. Effective executives finally make effective decisions.

2 Know Thy Time

This three-step process:

  • recording time;
  • managing time; and
  • consolidating time

is the foundation of executive effectiveness. (24)

To be effective, every knowledge worker, and especially every executive, therefore needs to be able to dispose of time in fairly large chunks. (28)

It is amazing how many things busy people are doing that never will be missed. (34)

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. (41-42)

An undirected meeting is not just a nuisance; it is a danger. (42)

The analysis of one’s time, moreover, is the one easily accessible and yet systematic way to analyse one’s work and to think through what really matters in it. (49)

3 What Can I Contribute?

What can I contribute that will significantly affect the performance and the results of the institution I serve? His stress is on responsibility. (50)

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. (51)

To ask: ‘What can I contribute’ is to look for the unused potential in the job. And what is considered excellent performance in a good many positions is often but a pale shadow of the job’s full potential of contribution. (52)

Executives who do not ask themselves: ‘What can I contribute?’ are not not only likely to aim too low, they are likely to am at the wrong things. (52)

Organization is, to a large extent, a means of overcoming the limitations mortality sets to what any one man can contribute. (54)

The most common cause of executive failure is inability or unwillingness to change with the demands of a new position. (55)

The focus on contribution, by itself supplies the four basic requirements of effective human relations:

  • communications;
  • teamwork
  • self-development; and,
  • development of others.

Throughout the ages the problem has always been how to get ‘communication’ out of ‘information’. Because information had to be handled and transmitted by people, it was always distorted by communications, that is, by opinion, impression, comment, judgment, bias, and so on. (64)

The more we automate information-handling, the more we will have to create opportunities for effective communication. (64)

…people in general, and knowledge workers in particular, grow according to the demands they make on themselves. They grow according to what they consider to be achievement and attainment. (65)

4 Making Strength Productive

…no executive has ever suffered because his subordinates were strong and effective. (68)

One cannot hire a hand — the whole man always comes with it – human relations proverb

In an organization one can make his strength effective and his weakness irrelevant. (71)

…every change in the definition, structure, and position of a job within an organization sets off a chain reaction of changes throughout the entire institution. … To structure one job to a person is almost certain to result in the end in greater discrepancy between the demands of the job and the available talent. (72)

To tolerate diversity, relationships must be task-focused rather than personality-focused. (72)

…for the ability of a knowledge worker to contribute in an organization, the values and the goals of the organization are at least as important as his own professional knowledge and skills. (77)

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

  1. They do not start out with the assumption that jobs are created by nature or by God. They know that they have been designed by highly fallible men.
  2. The second rule for staffing from strength is to make each job demanding and big. It should have challenge to bring out whatever strength a man may have.
  3. Effective executives know that they have to start with what a man can do rather than with what a job requires. … For a superior to focus on weakness, as our appraisals require him to do, destroys the integrity of his relationship with his subordinates. (80) …By themselves character and integrity do not accomplish anything. But their absence faults everything else.
  4. The effective executive knows that to get strength one has to put up with weaknesses.

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. (86)

In every area of effectiveness within an organization, one feeds the opportunities and starves the problem. Nowhere is this more important than in respect to people. …strength produces results. Weakness only produces headaches — and the absence of weakness produces nothing. (92)

In human affairs, in other words, the distance between the leaders and the average is a constant. If leadership performance is high, the average will go up. The effective executive knows that it is easier to raise the performance of one leader than it is to raise the performance of a whole mass. (93)

The task of an executive is not to change human beings. Rather, as the Bible tells us in the Parable of the Talents, the task is to multiply performance capacity of the whole by putting to use whatever strength, whatever health, whatever aspiration there is in individuals. (93)

5 First Things First

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. (94)

An organization needs to bring in fresh people with fresh points of view fairly often. If it only promotes from within it soon becomes inbred and eventually sterile. (101)

There are always more productive tasks for tomorrow than there is time to do them and more opportunities than there are capable people to take care of them — not to mention the always abundant problems and crises. A decision therefore has to be made which tasks deserve priority and which are of less importance. The only question is which will make the decision — the executive or the pressures. (102)

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 problems;
  • 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.

6 The Elements of Decision-making

Effective executives…want impact rather than technique, they want to be sound rather than clever. (107)

The truly important features of the decisions…made are neither…novelty nor…controversial:

  1. the clear realization that the problem was generic and could only be solved through a decision which established a rule, a principle;
  2. the definition of the specifications which the answer to the problem had to satisfy, that is, of the ‘boundary conditions’;
  3. the thinking through what is ‘right’, that is, the solution which will fully satisfy the specifications before attention is given to the compromises, adaptations, and concessions needed to make the decision acceptable;
  4. the building into the decision of the action to carry it out;
  5. the ‘feedback’ which tests the validity and effectiveness of the decision against the actual course of events.

1. The first question the effective decision-maker asks is: ‘Is this a generic situation or an exception?’ (115) It is this common human tendency to confuse plausibility with morality which makes the incomplete hypothesis so dangerous a mistake and so hard to correct. The effective decision-maker, therefore, always assumes initially that the problem is generic. (120) One of the most obvious facts of social and political life is the longevity of the temporary. (12)

2. The second major element in the decision-process is clear specifications as to what the decision has to accomplish. (121)

3. One has to start out with what is right rather than what is acceptable (let alone who is right) precisely because one always has to compromise in the end. (126) For there are two different kinds of compromise. One kind is expressed in the old proverb: ‘Half a loaf is better than no bread.’ The other kind is expressed in the story of the Judgment of Solomon, which was clearly based on the realization that ‘half a baby is worse than no baby at all.’ (126)

4. Converting the decision into action is the fourth major element in the decision-process. (127) 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. (127)

5. Finally, a feedback has to be built into the decision to provide a continuous testing, against actual events, of the expectations that underlie the decisions. (130)

7 Effective Decisions

A decision is a judgment. It is a choice between alternatives. it is rarely a choice between right and wrong. It is at best a choice between ‘almost right’ and ‘probably wrong’ — but much more often a choice between two courses of action neither of which is provably more nearly right, than the other. (134)

To get the facts first is impossible. There are no facts unless one has a criterion of relevance. Events by themselves are not facts. (134)

A judgment in which one can only say ‘yes’ or ‘no’ is no judgment at all. (138)

Unless one has considered alternatives, one has a closed mind. (138)

There are three main reasons for the insistence on disagreement. It is, first, the only safeguard against the decision-maker’s becoming the prisoner of the organization. (140) Secondly, disagreement alone can provide alternatives to a decision. (140) Above all, disagreement is needed to stimulate the imagination. (142)

The effective decision-maker, therefore, organizes disagreement. …Disagreement converts the plausible into the right and the right into the good decision. (143)

Every decision is like surgery. It is an intervention into a system and therefore carries with it the risk of shock. (145)

It becomes clear that a decision requires courage as much as it requires judgment. There is no inherent reason why medicines should taste horribly — but effective ones usually do. Similarly there is no inherent reason why decisions should be distasteful — but most effective ones are. (147)

Executives are not paid for doing things they like to do. They are being paid for getting the right things done — most of all in their specific task, the making of effective decisions. (148)

Conclusion: Effectiveness Must Be Learned

  1. The first step toward effectiveness is a procedure: recording where the time goes.
  2. The next step, however, in which the executive is asked to focus his work on outward contribution advances from the procedural to the conceptual, from mechanics to analysis, and from efficiencies to concern with results.
  3. Making Strengths Productive is fundamentally an attitude expressed in behavior
  4. The chapter First Things First serves as antiphon to the earlier chapter, Know Thy Time.
  5. The effective decision, which the final chapters discuss, is concerned with rational action.

Effective decision-making requires both procedure and analysis; but its essence is an ethics of action. (158)

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. (159)

Self-development of the executive towards effectiveness is the only integrator available. (162)

Effectiveness must be learned. (162)

— VIA —

There is a flurry of thoughts running through my soul after reading this book. There is the brilliant deconstruction of executive authority and power to service and ethics, there are the insights of empowerment regarding courage in light of analytic analysis, and there is the sheer simplicity of learning, prioritization, etc., that we all know, but have difficulty putting into practice. Drucker’s writings truly are a gift. Let us unwrap and engage diligently with its contents. It is worth our time and effort, and the world deserves to have all of us who are in positions of decision-making responsibility to be wise and diligent in these areas.

My only negative evaluation of the book is that I had difficulty with the sole use of masculine pronouns, which may be understandable given Drucker’s era of writing. However, the necessity of recognition and acknowledgment of gender equality in areas of leadership and executive authority is a reality that we can no longer ignore. Perhaps if Drucker were writing in the 90s vs. the 60s, we would see more gender-inclusive language?

I had one contention on page 93, in that Drucker says that the task is not to “change human beings.” I wholly disagree. I believe the results of effective decisions and effective leadership is exactly that, to change human beings, to transform them into something that they would not have become had it been left to their own devices. The global community, the efforts of love and grace, the goals of leadership, are to transform people into better people, to rid this world of more and more sin, and to imbue this world with greater value, greater humanity, and a greater presence of God. This is done by changing people, and leadership is the primary vehicle to make that happen.

Prayerfully, more leaders, especially in service industries (justice ministries, non-profits, churches, youth work, etc.) will learn from Drucker’s wisdom and insights, for there, the result that effective decisions produce is the immeasurable flourishing of the human spirit. These are results that our world must not live without.