Summary of The Effective Executive: An executive – one who makes decisions that affect your business – must be effective, that is, he must do what it takes; this book teaches us to do that, by teaching us to learn how to watch our time and to organize it, to ask ourselves about what we contribute rather than what is wed to us, to nurture the energy in ourselves and in others by focusing on strengths rather than weaknesses, concentrating on priorities by trimming the past and having the courage – rather than the intelligence – to determine what they are, making effective decisions based on 5 basic principles, and to understand that every choice has alternatives.
By Peter F. Drucker, 160 pages, 1967 (first edition), 2002 (second revised edition).
Book chronicle and summary of The Effective Executive:
The Effective Executive is written by Peter Drucker, renown management specialist and theorist and classic among classics. It is the very first book of his that I have read. The author begins by explaining to us that efficiency is the primary function of executives. Being efficient is simply doing what is necessary. Effective people are scarce in management positions, and it seems that there is no correlation between a person’s effectiveness and their intelligence, their imagination and their knowledge. These qualities are certainly essential resources, but only effectiveness converts them into results.
For a long time, the strength of a nation, an enterprise, or an institution was more assured in its manual labor force than by the effectiveness of its intellectuals. Yesterday’s hospital did not have the specialists, technicians, chemists, physiotherapists, dietitians and assistants who are the norm today. Today, the proportion of intellectuals in institutions and companies in relation to manual workers is enormous. These intellectuals are experts in many disciplines whose training has cost an enormous amount, and who produce nothing by themselves. The specialist only produces knowledge, ideas and information. Therefore he can’t put the intrinsic value of his product into practical use, as he would if he was making a pair of shoes, for example, and he must produce efficiently.
The key to efficiency
The key to efficiency for an executive is to apply his effort where it is necessary. An executive is a specialist who bears the responsibility of contributing to the operation or results of a company. Many members of the hierarchy are not real executives, because even though they have the power of command over – sometimes many – people, they provide no real contribution to the operation of the company. Executives are people who make decisions that have a significant impact on the company. Thus, a businessman or a self-employed worker is an executive.
Executives today are subject to major four constraints:
- An executive’s time is less and less his own. Everyone can take their time and nobody denies it to them. Even the most organized executives find that most of their time interrupted by people who provide minimal or no contribution to the goals they pursue.
- Executives are forced to do menial tasks that do not change the environment in which they live and work. If an executive stops caring, over time, to determine what he must do, he is condemned to remain stuck doing something and can’t step back from it. Executives need criteria that allow them to work according to what is truly important, that is, their contribution to the results.
- Executives act at the heart of an organization. They are therefore effective only if others make use of their contributions.
- Executives act on the inside of an organization. It’s on the inside of the company that we see executives, and it is there that they have close contact. They see the problems that arise first hand, the relationships that are formed there, the oppositions that develop there, rumors that spread there.
Organization Performance Indicator
So, the performance of an organization can be determined mainly by external results, and it is the outside that often has the largest influence on the company. It may have indicators in the form of figures and statistics, that can easily be presented in the form of beautiful graphics in this age of information processing, but the important events that are passed to the outside can’t be put into a computer. We need the power of the human brain – though not particularly logical – to understand this information.
The danger, then, is that executives come to despise the information and stimuli that can not be reduced to the status of electronic language or logic. Unless they make serious efforts to understand what is happening outside, the inside of the organization can hide what is really going on.
There are techniques and habits to increase the effectiveness of each of these constraints, which I have summarized for you:
Chapter 2: Know Thy Time
Time is the key constraint, and executives know this. Time is a unique resource because it can not be rented, bought, acquired or stored for later. No matter how strong the demand on time is, it never increases. There never stops being a shortage of it and it is a completely irreplaceable resource.
Everything takes time. All work relies on time and uses it.
All executives fall prey to things that take up their time, and see much of it lost to simple things –like the response to a request that a boss could have done himself in less than two minutes – but who doesn’t contribute much.
Their time is constantly interrupted rather than spent addressing most of the tasks entrusted to executives, which, to be done effectively, require a sufficiently long period of time. A report can take six to eight hours to be drafted. There is no point in spending fifteen minutes twice a day for three weeks: all that comes of that will be, at best, a few scribbles. But if he can shut himself in his office, put the phone on hold, and ask not to be disturbed, there is every chance that he can produce a workable version in a single day, which will only need a few revisions.
Thus, to be effective, you must use your time in large enough slices.
Effective executives know how to use their time by taking 3 steps:
- Know where your time goes Man is ill equipped to judge the passage of time by himself. It is therefore important to measure the time we spend with reliable instruments, without relying on a memory that filters and distorts the facts. An effective executive does this for at least three to four weeks in a row, twice a year.
From the sample obtained, you will be able to reflect upon and rethink your use of time. It’s a continuous process that must be constantly readjusted, and that improves with practice, at the price of constant effort. Once the data is collected, the manager should 1) identify and eliminate anything that is not necessary by asking the simple question: “What will happen if I delete this?” If the answer is nothing, then he must put an end to the activity. Next, 2) he asks himself “What are the activities that could be completed, perhaps even better by someone else?” and his response will determine his ability to delegate.
Organize your time
To eliminate wasted time, you must 1) identify the causes of lost time that results from a lack of organization and planning. Some cyclical crises are caused by a structural problem that it is more effective to change rather than just focusing on its effects. What’s more, some tasks today that require genius and lots of skills can be integrated into a system and described with sufficiently clear procedures that unqualified personnel can take them over. 2) The loss of time often results from an excess of staff: the separation of labor between people leads to a greater need for coordination.
You can tell if there are too many on staff if an executive or supervisor spends more than 10% of his time on HR problems. To remedy this, you must call on external service providers rather than employ underutilized specialists. 3) Meetings are time vacuums where efficiency is most often zero. 4) Significant loss of time due to a poor flow of information.
Reorganize available time
Once you know how you use your time and have eliminated unnecessary tasks, you need to consolidate the time saved and use it on more important tasks or projects. According to the author, it is on average less than a quarter of the total time available to executives, and, in any event, it is always lower than they would like. How do you organize one fourth of your time into large slices which are minimally disturbed by interruptions?
There are many ways to accomplish this. For example, you could work the morning at home, with the phone turned off, for a certain time, or perhaps do it two mornings a week, or 90 minutes per day. Even if you have to get up earlier, it is often better than bringing files home in the evening and spending 3 hours after dinner.
Chapter 3: What Can I Contribute?
Most executives are more interested in the work than in the results, they care about what the company or their superiors “must” or should do for them, and are above all aware of the authority they should exercise. This makes them largely ineffective.
Effective executives concentrate their attention on the contribution they can make to the company. They raise their focus from the work to the external objective.
Then they can reflect on the relationship between their techniques, their expertise, their function, their service and the whole institution and its goals. Then they can begin to think about the perspective of the customer or user.
Efficiency is making the best possible contribution while realizing your company’s objectives.
Focusing your efforts on contribution allows you to adapt more easily to significant changes in the working environment: executives used to reflection can thus keep the same method of reasoning, and apply it to the new situation. Others certainly fail by not doing it as well as those who reflect, and without asking questions or understanding the need to reorient their efforts.
In addition, focusing on the contribution that you bring to your company can develop an innate sense of human relationships, since it can effectively develop the 4 essential elements of effective human relationships:
Executives who think in terms of contribution generally require that their subordinates do the same, and therefore ask: “What should we expect from you? What are the best uses of your knowledge and your abilities?” This greatly facilitates lines of hierarchy because the subordinate has thought about the contribution that can be expected of him.
The question “Who can make use of my productivity?” can trigger horizontal communication that enables teamwork, showing the importance of those in the same hierarchy, above or below the executive. Members of an institution must cooperate voluntarily according to the logic of the situation and the requirements of the task rather than a formal procedure.
Your Own Perfection
The man who asks himself “What is the biggest contribution I can make the operation of this organization?” is in fact asking himself “What training do I need?”
The executive that focuses on his contribution encourages others to perfect theirs. It sets standards that are not personal but based on the requirements of the work to be done. We know very little about individual perfection, but we know at least one thing: men advance according to the demands they place on themselves and the goals they set. If they are content with little, they will not grow, but if they push themselves, they become giants – without much more effort than those who do nothing.
Chapter 4: Making Strength Productive
In this chapter, with a philosophy very similar to that of Strengths Finder, Peter Drucker stresses the need to identify and use the strengths of his collaborators – subordinates, colleagues and superiors – as well as his own, to make the strength of each man a stone in the monument that is the organization.
Executives nurture energy efficiently. They know that we cannot build on weakness. Their first task is to recruit strength. They assign jobs and promotions based on what men can do, taking greater account of their good qualities than their defects. Wanting to staff a company with men who have no weaknesses or “good employees” leads to mediocrity, even incompetence. Strongmen always have weaknesses: where there are mountains there have to be valleys.
Effective executives do not ask “Will he get along with me?” but wonder “What will he contribute?” They don’t ask “What can’t he do?” but “What does he do well?” When they hire, they are looking for exceptional qualities in an important area, not generalists.
Effective leaders are able to recruit their staff, taking into account only their strengths, by applying the 4 following rules:
- They don’t start out with the idea that jobs result from the nature of things or divine will.
Jobs and positions have in fact been created by and may prove to be too much for one man. In this regard, the rule of conduct is simple: any function that resulted in failure by two or three men, known for success in their previous jobs, must be considered unsuitable for human beings and revised. The responsible party thus effectively ensures that the job is not subject to a design defect.
- Challenging and demanding jobs are created by those who occupy such positions.It is important that these positions are designed to get the best possible energy from those who occupy them, so that any strength used properly for the task produces significant results. This is especially true if it is the person’s first job, because it is a person’s first job that establishes the standards that will guide them for the rest of their careers and enable them to measure their own value and their contributions.
- They begin by asking what a person can do and can’t do when filling the position.
To do this you need an appraisal procedure, which contains 4 questions:
- List of task does the person does well?
- What task is it, therefore, that they are able to fill?
- What should they learn or acquire to make the most of their strength?
- If I had a son or a daughter, would I like it if he (or she) was working under the orders of this person?
- Yes, then why?
- If not, why not?
They draw strength from their weaknesses. Effective executives rarely believe the illusion that two mediocre people are as good as one good employee. For a given task, they seek someone strong and aim for excellence. Thus, when appointing people to jobs, they focus on possibilities, not problems.
In addition, effective executives don’t just nurture the energy of their own subordinates: they are also concerned with making their superiors as productive as possible. It is the effectiveness of subordinates that gives superiors such productive energy. And, if supervisors are not promoted, subordinates are likely to see their careers blocked.
In the end, in each of the areas that an institution opens to the effectiveness of its participants, it must inflate possibilities and deflate potential problems.
Chapter 5: First Things First
The real secret of efficiency, if there is one, is concentration. Effective executives do the essential first, one thing at a time.
In fact, important contributions that are expected of someone always exceed the time available. So even among the important tasks, you still have to make a choice. To be effective and productive an executive must have large slices of
time as we have seen. And he must also be able to focus human energy on important subjects and with regard to the talents of the individual concerned.
Some people can multitask and work efficiently on several projects at the same time, but they are few and far between. Doing one thing at a time means that it will be done quickly. The more you can concentrate time, strengths and resources on a single point of application, the more you can achieve a number of important and diverse tasks.
This is the secret of people who do so many things: they only do one at a time. This takes them much less time than others who do nothing while sometimes working much harder. This second group of people in general make two mistakes: 1) they underestimate the time required to accomplish the task, and 2) they try to run when they should start out slowly and find the right rhythm.
How do you focus on the essentials? By doing 2 things:
- Prune the past
Effective executives periodically revise their work habits – and those of their employees – by asking: “If I have not been used to doing this, should I start now? If the answer is not an unconditional yes, they abandon the activity or reduce it drastically.
- Determine the order of your priorities
The secret of focus is not to establish priorities. Anyone can do that. The real secret is to establish “posteriorities,” that is to choose tasks that should not be done, and stick to it. In the end, it is not intelligence but courage that determines your ability to focus on priorities. That’s what allows you to follow the 4 rules for assigning priorities:
- Choose the future over the past
- Focus on possibilities rather than problems
- Choose your own path rather than jumping on the bandwagon
- Aim high, something significant instead of a goal that is safe and easy to achieve
Chapter 6: The Elements of Decision
Effective executives make effective decisions. But they do not make many, they focus only on those that are important. The source of effectiveness is not solving problems, but the optimization of the overall structure. Effective executives thus rise up and take a step back to solve strategic or general problems, and make decisions at the highest possible conceptual level.
They achieve this by following 5 steps:
- They realize that the problem is of a general nature and can’t be solved by a decision that establishes a rule or principle.
So rather than spending their time putting out fires, they try to understand the cause of the fires and prevent them, for example by prohibiting flammable materials around forest campfires in the summer.
So, often, problems are merely symptoms of underlying situations.
- They establish precise specifications for goals. What decision should it lead to? What are the minimum goals? And what are the conditions to be met? An effective decision must meet its limiting conditions.
- They do what they have to rather than what is just acceptable.
There will always need to be a compromise, at some point. But, if we ignore the objectives and the boundary conditions, it will be impossible to distinguish a good compromise from a bad compromise, and it is often the latter which is chosen. The difference between a good and bad compromise is simple: if you cut a piece of bread in two, each person can benefit by receiving a half. If you cut a baby in two, you have a corpse in two pieces.
- They convert decisions into actions.
This is generally the longest stage, but not the most difficult. Transforming a decision into action requires us to answer these questions: “Who should we inform? What action do we need to take? Who should be in charge? What type of action needs to be taken to ensure that the people who should participate can do so?”
- They use feedback to ensure that decisions have been implemented properly.
Nothing gets done without systematic monitoring of the execution of orders and directives. The effective executive does not hesitate to go out and walk around, not content with second-hand information.
Chapter 7: Effective Decisions
To decide is to issue a ruling. It is choosing one of the alternatives, which are rarely good and evil, but rather the “almost good” and “probably bad”, and more often alternatives that nobody can say for certain whether they will bring you closer to the goal.
The decision starts with opinions. The effective executives know this, and he knows that they are unverified assumptions and remain worthless as long as they remain unverified. Thus, to decide comes down to choosing based on an opinion, then measuring the effectiveness of the action based on one or more predetermined criteria.
Effective executives encourage the expression of opinions because they know that each one is an opportunity for further action. But they also require that those who express them also think about what needs to occur in order to implement them. They ask therefore: “What do we need to know to verify the validity of this hypothesis? What must we find out to support this opinion?”
The crucial question is perhaps: “What are the pertinent criteria for determining the validity of a hypothesis?”
Again, the best way to learn is to go out in search of feedback, except that this time you research the result before the decision. Often, statistics are unable to reflect a reality that is almost immediately palpable on the ground (and this concept is the foundation of methodological individualism in sociology). What’s more, effective executives can’t be satisfied with one or two criteria of relevance, because judging requires several choices. When the outcome can only be a “yes” or “no” it isn’t a judgment. For this, there’s nothing like favoring the conflict of opinions by collecting as many different opinions as possible.
By gathering the maximum possible assessment criteria, the effective executive avoids confining himself to the prejudices of his organization, and minimizes the “roll of the dice” because any decision has a good chance of turning out bad. So, if he has envisaged other solutions from the start, the executive can consider other alternatives more easily in case of failure and will not be confined by his original decision.
Book Critique of The Effective Executive:
What can I say about this first book of Drucker, if not that it impressed me with its intelligence, its relevance and brevity? The 160 pages are a model of content that is easy to read, clearly explained, profound and practical. The intelligence, knowledge and openness that I felt from Drucker made me really want to read his other books (there are two in my list, The Essential Drucker and Innovation and Entrepreneurship). 40 years ago, the book was written. Still these basic principles apply. It seems clear to me that it has influenced many other authors who have deepened these concepts, which for the most part deserve much more than just a chapter.
Thus Chapter 4, Making Strength Productive, is extremely well complemented by Strengths Finder 2.0 and chapter 6, The Elements of Decision Making, is brilliantly detailed in The Path of Least Resistance by Robert Fritz. I am sure that I can find books deepening each chapter as I progress through this project and extend my knowledge in this area.
The book, however, shows its age in selected examples and illustrations, which take place most often from the first to the Second World War. This might be disillusioning to some readers, but personally I found these examples pertinent and timeless for the most part, and it hasn’t hampered me.
What’s more, I had the opportunity to work alongside a very effective executive for years at one of my clients, a large French automobile company, and I was struck by the resemblance between the robotic portrait presented of the ideal effective executive and that person. This only strengthens my impression with regard to the relevance of this book.
I therefore recommend it. This book is a solid foundation to build on for anyone who wants to increase his or her effectiveness in the professional world, simple, intelligent, concise and profound all at once.
- Concise and relevant
- Many practical applications proposed, mostly in the form of relevant questions to ask
- For any person exercising responsibility in the workplace – an executive in the broad sense
- A solid foundation on which to build efficiency
- A summary of the fundamental principles of efficiency
- The examples may seem a bit out of date
- Water has passed under the bridge since then, and many books have appeared to deepen the concepts covered by the author
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