The Effective Executive

But this groundbreaking book isn't only for CEOs and other top management. For Drucker, an "executive" is any knowledge worker whose daily decisions materially affect the organization's capacity to obtain results. In a guerrilla war, he writes, "every man is an executive," and the same applies to many modern companies.

For that reason, "The Effective Executive" will appeal to nearly anyone seeking to boost his or her performance in a modern corporation – everyone from entry-level assistants to middle managers to corner-office titans.

So listen up, and learn what the premier management guru of our time has to teach us about time management, about making our strengths productive, and about making good decisions. Much has changed since Drucker wrote his book, but those topics remain critical to career development.

Before we get to the meat of such matters, though, the author comes out with a comforting message: effectiveness isn't a trait we're born with. Rather, it's something we learn. Plenty of highly intelligent executives fail – and plenty of seemingly unremarkable executives turn out to be high achievers. To figure out why some succeed and others fail, Drucker spent much of his life closely observing large organizations, from the inside. He observed executives with a wide variety of styles confronting all different kinds of situations. And he found that the effective ones followed a common set of practices. And practices, unlike intelligence or charm, can be learned.

From there, the author devotes a chapter to each one of these practices. Together, they form a classic and time-tested guide to achievement in our knowledge-based world.

The first practice Drucker focuses on is time management. He sums up his time management philosophy with the commandment: "Know Thy Time." He argues that time is the main limiting factor in the process of accomplishment. In a well-endowed company, we can borrow more money or hire more people, but not even the richest person can rent, hire, buy, or in any way obtain, more time.

And yet, for the executive, time is always in limited supply but high demand – and not always for matters of immediate importance. A sales manager may be hard at work on a new strategy, but he still has to take the phone when a big customer calls – even if it's to discuss the latest doings of the local sports club. A department head may find himself flying cross-country to "show face" at a client meeting – even if his input could have been just as effective over the phone. For Drucker, executives should plan on sacrificing at least some time to these inevitable distractions.

But the surrender need not – indeed, must not – be complete. The executive must harness his time, and use it as effectively as possible. The first step is to figure out where it goes. According to Drucker, most executives are quite surprised when they closely document how they spend their time. Many operate under the delusion that only a small amount of their time goes to unproductive pursuits, when in fact most of it does.

Once executives document how they spend their time, Drucker recommends taking a close look at the results. First they need to identify and eliminate the things that need not be done at all – the things they do that bring no gain to the company whatsoever. An executive should ask himself: Is my presence really necessary at the weekly sales meeting – or would my attending monthly actually make more sense?

From there, the next question is: Which activities could just as well be done by someone else – and perhaps even better? Drucker cites the example of an executive who realizes that he eats his evening meal out nearly seven days a week, representing the company at various social functions. The busy after-hours schedule is exhausting him, and damaging his home life. The solution, it turns out, is simple: Choose a junior executive, with more energy and fewer personal commitments, to take over the ceremonial social duties.

Once an executive has trimmed away unproductive tasks and delegated work to people who are more suited to it, he can focus on increasing his time allotment to important tasks. Drucker warns against resigning yourself to devoting small amounts of time to large tasks. Big decisions like choosing the right person to hire, or coming up with a strategic plan, takes time in large blocks. The effective executive builds those blocks into his schedule.

Although Drucker urges executives to delegate some tasks, he doesn't want them to see their role as merely delegating responsibility. So the next chapter poses the question, "What can I contribute"? and it focuses on what the executive can't delegate – the things he actually contributes to the company's success.

Rather than think about their own contribution, Drucker claims, many executives "focus downward" – that is, they busy themselves worrying about the performance of their subordinates. Thus, when he asks executives how they justify their position on the company payroll, they tend to answer, "I run the accounting department," or even, "I have a thousand college graduates working under me." When he hears such responses, he knows he has his work cut out for him.

Statements like "I run the accounting department" reveal little about what an executive actually does. For Drucker, the accounting chief would be more effective if he stepped back and considered what he could do to make the department run more smoothly – and then define his role accordingly. "It's my responsibility to give our company's accounting staff the tools and information they need to excel." The man who merely "runs the accounting department" risks contributing little but fodder for his own ego. The man who takes responsibility for his staff and their ability to excel opens new avenues of contribution to the company's success – and by extension, to his own success.

Moreover, by focusing on contribution, the executive forces himself to lift his gaze occasionally from the daily workings of his department and look outward, beyond the company to the broad marketplace – where results are attained. That, for Drucker, is a key to executive excellence – to have one eye trained inside, to the area of the company under his command, and the other to the outside, always moving his division toward greater success in the marketplace.

From there, Drucker moves to another pillar of effectiveness – making strength productive. By this, he means executives should spend their energy maximizing strength, not minimizing weakness. For Drucker, effective organizations excel by squeezing the most out of their employees' strengths, while making their weaknesses as irrelevant as possible. He cites the example of the opera. The main singer, the prima donna, should be chosen based on her talent, not her temperament. No one in the audience cares if a dull singer behaves politely backstage. They have paid to see great art, not to ease the plight of the opera director. The director should choose the best singer possible, even if she occasionally melts down backstage. As long as the prima donna's tirades don't affect the final product, it's the director's responsibility to endure her mood swings while putting on the best show possible.

Likewise, an effective executive doesn't fire an ace salesman because he can't keep up with the paperwork. If such a man produces at a high level, hire him an assistant who can keep his books and free the salesman to close deals. That way, you're freeing him to do what he does best while making his paperwork weakness irrelevant. And the company bottom line need not suffer because of the new assistant on the payroll. Since you've taken paperwork out of the salesman's job description, he should have more time to sell. So you should raise his sales targets, broaden his portfolio, and expect his sales results to finance the new position, and then some.

In general, when evaluating talent, the effective executive asks, "What can this person do exceptionally well?", rather than "What can this person not do?" And he asks the same question of himself when he's mapping out his own contribution to the firm. If an executive learns through experience that he's an excellent strategist, then he should focus his attention on strategy, and rely on someone else to excel at operational details.

Next, Drucker focuses on concentration and priorities – the concept of "first things first." He claims that the more executives focus on contribution and playing to strengths, the more they see the need to devote large blocks of time to a single activity. In short, although the circus juggler can keep several objects in the air for as long as ten minutes, few executives can juggle several big projects at once. The key is to prioritize among the many tasks facing the organization; focus on what you're good at; and then delegate the rest.

In this section, this forty-year-old book sounds positively written for today. In an era of multi-tasking, when people almost seem to compete over who's the busiest, Drucker urges us to simplify. Foreseeing today's BlackBerry-enslaved executive scrambling from meeting to email to conference call, Drucker wants us to "switch from being busy to achieving results." He adds that the "people who get nothing done, often work a great deal harder."

He writes that many executives cram their schedules full of tasks with the idea that everything will go right. But effective executives know that things often go wrong, and plan their schedules accordingly. Nor do good executives work in a frenzy. Rather, they set an easy pace but keep going steadily. By methodically doing what they do best, they outperform their peers who race from one thing to another, never doing anything quite right.

Drucker recommends setting similar priorities for the broader company. He warns us to beware of inertia, of doing things a certain way because they have always been done that way. The past will always exert pressure on present decisions, but executives must assess their situations without emotional ties to the way things have always been done. The executive's specific job is to commit today's resources to the future. That means cutting inherited activities that no longer deliver results.

It also means training a cold eye on your own initiatives. The best-laid plans often go astray, and when something you started clearly doesn't work, executives must cut it even if it hurts. Failing projects too often become what Drucker calls "investments in managerial ego," and they suck away resources that could be producing results if allocated elsewhere. Like fruit trees, organizations need to be ruthlessly pruned, or else unproductive branches will drain the lifeblood from productive ones.

But how to decide which branches to cut? The book's final two chapters focus on the decision-making process. For Drucker, decision making is central to the task of the executive – it's ultimately what he gets paid to do. Making good decisions requires a rational, methodological process.

First, the decision maker has to determine if the problem in question is generic or specific. A generic problem might involve broad issues regarding a company's or division's survival. For example, a competitor plans to release a new product that might, if successful, make your company's product obsolete. A specific problem might be something like your computer system is being hacked. The solution to the generic problem will require serious thinking by an executive. The answer to the specific one, while serious, will likely require a particular technical solution – one whose details probably won't involve a top executive.

Once you decide a problem is generic, it's time to lay out what Drucker calls the "boundary conditions." These are the specifications that any acceptable decision will have to meet – things like budget limitations and deadlines. With these facts clearly laid out, the executive then decides on a course of action. But the process still isn't over. The solution can't just sound grand on paper; it has to be made practical, complete with a plan for carrying it out. And finally, there must be a mechanism for capturing "feedback" – that is, for monitoring how the decision plays out in the real world.

Many executives neglect that final step, Drucker says. If anything, they ignore negative feedback as long as they can, hoping that things will change. They get emotionally attached to their decisions and hide from signs of their failure. The effective executive takes ownership of decisions, watches feedback closely, and knows when to change course if things aren't working out.

In the final chapter, Drucker provides more insights into the decision-making process. Here he focuses on gathering information leading up to a major decision. He rejects advice that executives must first "get the facts" before deciding. Not true, says Drucker. In most situations, "the facts" are so voluminous as to be overwhelming. What the executive really needs are the opinions of people who deeply understand the issue. To form opinions, people organize facts in a way that serves their argument. They do the work of picking out the relevant facts for the executive.

The smart executive solicits the informed opinions of people he trusts, and then carefully comes up with the best course of action. And he doesn't shy away from conflict among those whose opinion he seeks. In the heat of the intellectual battle, sparks will fly that can shine a light on flaws in arguments and point the way to new insights.

Drucker also points out that when making decisions, smart executives always seriously consider the null option – the idea of doing nothing at all. Any positive course of action will have to show itself clearly better than the null option.

But once the decision to act has been made, the action should be full and decisive: Half-measures won't do. No physician would take out a single tonsil or half an appendix. That would mean exposing the patient to all the risks of surgery while letting the disease remain. Half-actions, says Drucker, are always the wrong decision.

Overall, "The Effective Executive" bristles with insights and holds up well even decades after its publication. Readers will occasionally find themselves jolted by out-of-date references. Drucker often mentions the Vietnam War, and when he wants an example of an effective executive in action, he often points to Alfred P Sloan, who retired from General Motors fifty years ago. Yet as this book shows, Drucker is a most effective writer on career issues, and his commonsense lessons remain worth heeding today. Many of his seminal ideas have been developed into some of Mind Tools' most widely referenced articles.

"The Effective Executive" by Peter Drucker is published in paperback by Collins.

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