Reviewed Jan 08

M Rhodes

The Effective Executive

Harper Collins
ISBN: 0-06-053768-X

Author:

Peter Drucker

Overview

This is perhaps the seminal work on how an executive should manage his self to be both
efficient and effective. Although a relatively small book, Drucker has presented the
essential elements of executive effectiveness in a clear, no nonsense way. His points are
well made and well supported by short case studies and clear examples developing into a
clear and concise discussion of how an executive can become more effective. Essential
reading from one of the premier management thinkers of our time.

Chapter 1 – Effectiveness Can Be Learned

The executive's role is to 'effect' and' execute' but most executives although intelligent and
knowledgeable seem to lack the ability to put that knowledge and intelligence to real effect.
Brilliant men are often strikingly ineffective. Intelligence, imagination and knowledge are
essential resources but only effectiveness converts them into results.

In the modern economy, the knowledge organisation is the central reality where the centre
of effort is about applying knowledge and maximising its usage. Working on the right
things is what makes knowledge work effective. This can be measured as we used to
measure output or quality. A knowledge worker cannot however be supervised closely or
in detail, he must be motivated and allowed to direct himself toward performance and
contribution.

Drucker therefore suggests that every knowledge worker in a modern organisation is

therefore an executive by virtue of his position or his knowledge. It matters not whether he
manages staff, he manages information and himself and this can add significant
contribution.

There are four major factors over which an executive has no control and conspire to make
him less effective:

1. The executive's time is not his own, but tends to belong to everybody else. He seems
always to be at the behest of someone or some project rather than applying himself to
where he can be most effectiveness.

2. Executives are forced to keep on operating in the domain from which they are
familiar unless they make a complete change and focus on running the whole business.

3. The executive is forced to work within the organisation, which means that he is only
effective by directing what others in the organisation contribute. Organisation is about
multiplying the strength of the individual. Unless the executive can reach these people, he
will have no effectiveness.

4. The executive is within the organisation which means he limits his vision and reality
to the confines of that organisation. It becomes a distorting or limiting lens that
stops him seeing the real situation clearly.

These factors are constraints that limit the executive unless he can learn to become more
effective. What seems to be required is universal genius but this is scarce. Therefore we
should staff or organisations with people who excel in one key ability.

Effectiveness can be learned, however, as it is a habit or rather a set of simple practises.

Practises that need to be repeated until they become ingrained habits.

There practises or 5 essential habits of Effective Executives are:

1. They know where their time goes. They manage systematically the small amounts of
discretionary time they have.

2. They focus on outward contribution. They focus on results rather than effort. They
constantly ask 'What results are expected of me?'

3. They build on their own strengths,the strengths of their superiors, colleagues and
subordinates. They do not build on weakness and do not start things they cannot
complete.

4. They focus on a few major areas where superior performance adds value. They set
priorities and stay with those priority decisions. First things first and second things not at
all.

5. They make effective decisions. These are made on judgements based on dissenting
opinions rather than consensus on the facts. What is needed is the right strategy rather
than flash tactics.

Chapter 2 – Know Thy Time

Effective executives know that time is a limiting factor. It is an inelastic resource that is
irreplaceable and despite the demand the supply will not go up.

The key to time effectiveness is a 3-step process:

 Record the use of time

 Manage time
 Consolidate time

There are many demands on an executives time. Many of these demands are time wasters
rather than being productive. Additionally, most executive tasks require significant blocks
of time to complete. To begin a task without the time to complete it is pointless. It leads to
ineffectiveness and can lead to poor decisions and error.
Strategic and people decisions are time consuming. Thy are never simple and finding a fit
in a complex situation needs care and consideration.
Firstly, we need to record actual time usage. The method is unimportant, but the
identification of where time is spent is essential and is best done in real time.
With an idea of what you are doing with your time you can then ask some investigative
questions:

1. Identify what does not need to be done and is only wasting time?

2. What can be done by someone else and probably better?

3. What do I do that uses time without being effective?

These questions help identify the time leaks. These normally fit into 4 categories:

1. Time is wasted due to lack of planning, foresight or a system.

2. Time wasted due to over staffing and things therefore takeing longer than required.

3. Time is wasted due to mal-organisation leading to having too many meetings and
discussions.

4. Time is wasted due to poor information flow, format or availability.

Having established where the time leaks are, an effective executive can now reduce the
leaks and build more discretionary time.

Now that time needs to be used effectively!

Chapter 3 – What Can I Contribute

Effective executives focus on contribution. What is the content, level, standard, quality
and impact in your work or your relationships?

The executive needs to identify where his narrow skill, his speciality and his department
adds most to the performance of the whole organisation. They ask how can I contribute
here and to what standard do I need to complete it?

This is a particularly important factor in motivating a knowledge worker.

Focusing on contribution supplies four basic requirements of effective human relations:

1. Communication is improved because team members understand what their

contribution is towards the whole.

2. Teamwork is enhanced because the focus on contribution drives teams to

collaborate and communicate their contribution to that whole. They ask, 'who needs my
output for it to be effective?'

3. Self development benefits because a executive focusing on contribution will often

identify additional knowledge or skills they need to better contribute.
4. Individual development often improves because the executive sets the self
development standard for the organisation.

To focus on contribution is to focus on effectiveness!

Chapter 4 – Making Strength Productive

The effective executive makes a personal, a team or an organisational strength as

productive as possible. They identify personal, team and organisational strengths and
apply them effectively.

If a strength isn't present, the executive needs to identify strength in an external person
and hire them. The key is to find someone who can contribute strongly to the output and
then give then a good job. So what constitutes a good job?

1. Each job must be well designed so that it can be achieved by one appropriately
skilled person.

2. Each job must be big and demanding so as to challenge the person in it.

3. Each job must be designed by what the man can do not what is required.

4. Each job needs to reflect a relevant strength without succumbing to a weakness in

the person completing it.

The executive then takes responsibility for the performance of the individual. They guide
the individual to use their strength and make the best contribution.

This approach is also useful when managing upwards. Identify the contribution and
strengths of a senior manager and adapt your contribution to meet their needs.

As to the executive himself, he needs to also provide contribution through his personal
strengths. He also needs to have a more strategic view and identify how best the
contributions of all can benefit the organisation. The key principle being to feed the
opportunities and starve the problems.

The task of the executive therefore is not to change individuals but to multiply output and
performance by applying each person to his strength and aspirations.

Chapter 5 – First Things First

If there is one 'secret' of effectiveness then it is the ability to concentrate.

Effective executives do first things first and one at a time. They do this with passion,
discipline and focus. It is necessary, particularly with the executive because so many
elements are demanding his time. The more he can concentrate his effort and resources,
the more that can be achieved

The key elements of putting the first thing first are:

1. Pick future potential over poor past performance, focus on what may be productive
rather than what you know hasn't been!
2. Focus on the opportunity rather than the problem. This makes you think of the
future and what needs to be done first rather than the problem which is rooted in the past.

3. Set your priorities with courage rather than intelligent analysis. You will never have
all the information you need so be brave.

4. Choose your own direction rather than following the crowd. They have different
strengths and resources and so their approach will not be as effective in your hands.

5. Aim high and aim for something that will make a difference rather than something
that is safe.

Concentration then is the courage to impose on time the decision to act on the things that
matter most and make time and events your servant rather than becoming theirs.

Chapter 6 – The Elements of Decision-making

Decision making is specifically an executive role, one of many but decisions are executive
actions!

Effective executives make effective decisions. This requires a systematic approach with
clearly defined elements.

Focus on these key points to help ensure an effective decision:

1. Is this a generic or unique decision? Generic questions have normally been

answered, whereas unique questions have new solutions to be considered.

2. What does the decision have to accomplish? What must this decision attain as a
minimum so that we can move forward?

3. What are the boundary conditions for this decision?

4. Aim at what is right rather than on what is acceptable. That way you can always
avoid an early or incorrect compromise.

5. Convert the decision into action. A decision without action is just a wish.

6. Build in a feedback mechanism so that you can confirm the decision has been
correct or make another decision if it is required.

These then are the elements of the decisions process. But what of the decision itself?

Chapter 7 – Effective Decisions

A decision is a choice between alternatives based on information and judgement

Common counsel on decision making is to first gather all of the information. This is an
impossible task to achieve and even more difficult to analyse if it where achievable.
This isn't how effective executives normally make decisions. They normally start with
opinions as untested hypotheses. These need then to be tested against reality and the
executive must consider facts to test each hypothesis. Each fact must be considered for
relevance and for its appropriate measurement. Decisions then, do not flow from a
consensus of facts but from the survivor of a number of competing alternatives. So any
rigorous method needs to evolve from an awareness that opinions come first and analysis
second.

The first question to ask is 'Is a decision really needed?'. Let us assume that one is.

The executive then encourages input so that various opinions can be tested against reality.
This requires the correct criteria to be investigated and presented and in measures that are
appropriate to the problem. This is not a mathematical exercise because we cannot always
measure the criteria in the problem domain. It is more a risk-based judgement.

Alternative solutions must be considered. Unless you consider alternatives you have a
closed mind and may have missed a better solution. Beware the intuitive solution.

Encourage disagreement. Don't think right or wrong, but make a commitment to identify
why people disagree.
Insisting on disagreement:

1. Stops the decision making being constrained to the limits of the organisations
thinking.

2. Ensures you consider alternatives. If we all think the same then no one is thinking.

3. stimulates the imagination to find the right solution rather than just the first
possible solution.

Having made a decision the executive needs to consider the next action.

 Act if the benefits outweigh the costs/risks

 Act or do not act but do not compromise

Conclusion – Effectiveness Must Be Learned

This book hangs on 2 assumptions:

1. The executives job is to be effective.

2. Effectiveness can be learned.

The key points are:

1. Record where the time is spent. Eliminate wasted time and leaks and spend time
where it is most effective.

2. Focus on the contribution. Where is effort best spent?

3. Make strength productive.

4. Apply yourself to First things First.

5. Make effective decisions using a robust system of exploration and disagreement.

Summary Conclusion

It is not possible to overestimate the impact that Drucker has had on modern management
theory. This book in particular has significant lessons for anyone that wants to improve
their personal effectiveness. This summary captures a little of the knowledge contained in
the original text, in particular the case studies and anecdotes that support Drucker's
points. An excellent book, well presented and an essential addition to any manager or
leader's library. Read it often!

Rating: 5/5