The Effective Executive By Peter Drucker

I am not a manager but I am convinced that this is the single most important book in the history of management
Published: October 19, 2020 Reading Time: 12 minutes rating: 9


Pretty much highlighted the whole book.

Many lessons to digest and apply. To be effective one needs to measure. To be effective one needs to be deliberate. To be effective one needs to slow down, take the time to work through complex stuff and make decisions based on fundamental principles and not on external pressures.

Even though the book is about management at corporations, most of the lessons should be applied also at a more personal level. We should all strive to be effective.

Notes and Highlights

That one can truly manage other people is by no means adequately proven. But one can always manage oneself. Indeed, executives how 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.

The answer to the question “What needs to be done?” almost always contains more than one urgent task. But effective executives do not splinter themselves. They concentrate on one task if at all possible

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

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 th reexamine the plan as events unfold, the executive has no way of knowing which events really matter and which are only noise.

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.

In a well-managed enterprise, it is understood that people who fail in a new job, especially after a promotion, may not be the ones to blame.

Allocating the best people to the right positions is crucial.

We all know, thanks to Chester Barnard’s 1938 classic The Functions of the Executive, that organizations are held together by information rather than by ownership of command. 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.

As a side not executives need to be careful of “micro-management”. Asking the wrong question or asking for the wrong information can lead to disaster.

Effective executives know that any given meeting is either productive or a total waste of time.

There’s no middle ground.

..there seems to be little correlation between a man’s effectiveness and his intelligence, his imagination or his knowledge. Brilliant men are often strikingly ineffectual; they fail to realize that the brilliant insight is not by itself achievement. They never have learned that insights become effectiveness only through hard systematic work. Conversely, in every organization there are some highly effective plodders. While others rush around in the frenzy and busyness which very bright people so often confuse with “creativity,” the plodder puts one foot in front of the other and gets there first, like the tortoise in the old fable.

efficiency…is the ability to do things right rather than the ability to get the right things done.

The greatest wisdom not applied to action and behavior is meaningless data.

Similar to how to stoics approach philosophy.

I have called “executives” those knowledge workers, managers, or individual professional who are expected by virtue of their position or their knowledge to make decisions in the normal course of their work that have significant impact on the performance and results of the whole.

The fundamental problem is the reality around the executive. Unless he changes it by deliberate action, the flow of events will determine what he is concerned with and what he does.

Organization is a means of multiplying the strength of an individual.

There are only effort centers. The less an organization has to do to produce results, the better it does its job.

An organization is an organ of society and fulfills itself by the contribution it makes to the outside environment.

The relevant outside events are rarely available in quantifiable form until it is much too late to do anything about them.

In retrospect many things are easier.

The experience of the human race indicates strongly that the only person in abundant supply is the universal incompetent.

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.

Mastery might well elude him; for this one might need special talents. But what is needed in effectiveness is competence. What is needed are “the scales”.

…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.

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.

Man is ill-equipped to manage his time.

To be effective, every knowledge worker, and especially every executive, therefore needs to be able to dispose of time in fairly large chunks. To have small dribs and drabs of time at his disposal will not be sufficient even if the total is an impressive number of hours.

Deep work.

…because knowledge work cannot be measured the way manual work can, one cannot tell a knowledge worker in a few simple words whether he is doing the right job and how well he is doing it.

Since the knowledge worker directs himself, he must understand what achievement is expected of him and why. He must also understand the work of the people who have to use his knowledge input. For this, he needs a good deal of information, discussion, instruction – all things that take time. And contrary to common belief, this time demand is made not only on his superior but equally on his colleagues.

Management literature has long known the theorem “the span of control”, which asserts that one man can manage only a few people if these people have to come together in their own work.

Whether this theorem is valid or not, there is little doubt that the more people have to work together, the more time will be spent on “interacting” rather than on work and accomplishment. Large organization creates strength by lavishly using the executive’s time.

Time use does improve with practice. But only constant efforts at managing time can prevent drifting.

A well-managed plant, I soon learned, is a quiet place.

A well-managed factory is boring. Nothing exciting happens in it because the crises have been anticipated and have been converted into routine.

Time-wastes often results from over-staffing.

Meetings are by definition a concession to deficient organization. For one either meets or one works. One cannot do both at the same time.

…if executives in an organization spend more than a fairly small part of their time in meetings, it is a sure sign of mal-organization.

…meetings have to be the exception rather than the rule. An organization in which everybody meets all the time is an organization in which no one gets anything done.

“I have yet to come across a crisis which could not wait ninety minutes.”

The higher up an executive, the larger will be the proportion of time that is not under his control and yet not spent on contribution.

…all effective executives control their time management perpetually. They not only keep a continuing log and analyze it periodically. They set themselves deadlines for the important activities, based on their judgment of their discretionary time.

The focus on contribution is the key to effectiveness: in a man’s own work – its content, its level, its standards, and its impacts; in his relations with others – his superiors, his associates, his subordinates; in his use of the tools of the executive such as meetings or reports

…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.

Direct results always come first. In the care and feeding of an organization, they play the role calories play in the nutrition of the human body. But any organization also needs a commitment to value and their constant reaffirmation, as a human body needs vitamins and minerals. There has to be something “this organization stands for,” or else it degenerates into disorganization, confusion and paralysis.

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

…executives who take responsibility for contribution in their own work will as a rule demand that their subordinates take responsibility too.

Effective executives know what they expect to get out of a meeting, a report, or a presentation and what the purpose of the occasion is or should be.

To focus on contribution is to focus on effectiveness.

Measured against the universe of human knowledge, experience, and abilities, even the greatest genius would have to be rated a total failure.

Effective executives know that their subordinates are paid to perform and not to please their superiors. They know that it does not matter how many tantrums a prima donna throws as long as she brings in the customers.

One cannot change everybody’s work and responsibility just because one has to replace a single man in a single job

They knew however that their friendships had to be “off the job”. They knew that whether they liked a man or approved of him was irrelevant, if not a distraction. And by staying aloof they were able to build teams of great diversity but also strength.

…the test of organization is not genius. It is its capacity to make common people achieve uncommon performance.

For a superior to focus on weakness, as our appraisals require him to do, destroys the integrity of his relationship with his subordinates

Effective executives rarely suffer from the delusion that two mediocrities achieve as much as one good man. They have learned that, as a rule, two mediocrities achieve even less than one mediocrity – they just get in each other’s way. They accept that abilities must be specific to produce performance.

Every people-decision is a gamble. By basin it on what a man can do, it becomes at least a rational gamble.

This is the “secret” of those people how “do so many things” and apparently so many difficult things. They do only one at a time. As a result, they need much less time in the end than the rest of us.

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.

Effective executives therefore allow a fair margin of time beyond what is actually needed.

Yesterday’s actions and decisions, no matter how courageous or wise they may have been, inevitably become today’s problems, crises, and stupidities.

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.

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.

The first question the effective decision-maker asks is: “Is this a generic situation or an exception?” “Is this something that underlies a great many occurrences?” Or is the occurrence a unique event that needs to be dealt with as such?" The generic always has to be answered through a rule, a principle.

“A country with many laws is a country of incompetent lawyers.”

The things one worries about never happen. And objections and difficulties no one thought about suddenly turn out to be almost insurmountable obstacles.

The effective executive encourages opinions.

The effective executive, therefore, asks: “What do you have to know to test the validity of this hypothesis?” “What would the facts have to be to make this opinion tenable?”

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 judgements.

The effective decision-maker, therefore, organizes disagreement. This protects him against being taken in by the plausible but false or incomplete. It gives him the alternatives so that he can choose and make a decision, but also sso that he is not lost in the fog when his decision proves deficient or wrong in execution.

No matter how high his emotions run, no matter how certain he is that the other side is completely wrong and has no cause at all, the executive who wants to make the right decision forces himself to see opposition as his means to think through alternatives.

“Is a decision really necessary?” One alternative is always the alternative of doing nothing.

The needs of large-scale organization have to be satisfied by common people achieving uncommon performance. This is what the effective executive has to make himself able to do.

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.

Organizations are not more effective because they have better people. They have better people because they motivate to self-development through their standards, through their habits, through their climate.