Whether you work for a company or run your own, developing strong management habits is essential as you grow your team. With The Effective Executive, Peter Drucker explores how to ensure effective management by focusing on “doing the right things well”. Here’s what I learned from his book:

• Drucker believes the executive needs “criteria to work on the truly important: contributions and results.” Far too many executives are occupied with efforts rather than with results. While executives may vary in temperament and abilities, effective ones share a common trait: the ability to get the right things done.
• TIME MANAGEMENT. First, one needs to know where their time goes.
  • OBSERVATION: Many important matters require more time to complete, e.g., writing a report. The same holds true when you are building meaningful relationships.
  • “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 output. For this, he needs a good deal of information, discussion, instruction—all things that take time.”
  • Drucker urges us to treat knowledge workers as autonomous, capable adults. They must know how to manage their own time and information to produce results for the organization effectively. They are also expected to take responsibility for being understood.
    • “Effective executives have learned to ask systematically and without coyness: “What do I do that wastes your time without contributing to your effectiveness?” To ask this question, and to ask it without being afraid of the truth, is a mark of the effective executive.”
    • He sends out a printed form which reads: “I have asked [Messrs Smith, Jones, and Robinson] to meet with me [Wednesday at 3] in [the fourth floor conference room] to discuss [next year’s capital appropriations budget]. Please come if you think that you need the information or want to take part in the discussion. But you will in any event receive right away a full summary of the discussion and of any decisions reached, together with a request for your comments.”
  • “If it means that somebody else ought to do part of “my work,” it is wrong. One is paid for doing one’s own work. And if it implies, as the usual sermon does, that the laziest manager is the best manager, it is not only nonsense; it is immoral.”
  • Remove time-wasters which follow from lack of system or foresight.
    • 3 major areas: overstaffing, poor organization, malfunction of information
    • Create a log and analyze it periodically. Set yourself deadlines for important activities based on your judgment of your discretionary time.
• CONTRIBUTION. Focus on outward contribution, i.e., results, not work to be done, techniques, and tools.
  • After he has chatted with them about the assignment and the client organization, its history and its people, he asks (though rarely, of course, in these words): “And what do you do that justifies your being on the payroll?” The great majority, he reports, answer: “I run the accounting department,” or “I am in charge of the sales force.” Indeed, not uncommonly the answer is, “I have 850 people working under me.” Only a few say, “It’s my job to give our managers the information they need to make the right decisions,” or “I am responsible for finding out what products the customer will want tomorrow,” or “I have to think through and prepare the decisions the president will have to face tomorrow.”
    • OBSERVATION: People often place too much importance on their title, tying it too closely to their identity and self-worth.
  • Guiding question: What can I contribute that will significantly affect the performance and the results of the institution I serve?
    • To ask this means to look for unused potential in the job. What self-development do I need? What knowledge and skills do I have to acquire to make the contribution I should be making? What strengths do I have to put to work? What standards do I have to set myself?
    • Having everyone set their sights on contribution raises their work standards.
    • Workers have good human relations because they focus on contribution in their own work and in their relationships with others.
  • “The task is not to breed generalists. It is to enable the specialist to make himself and his specialty effective. This means that he must think through who is to use his output and what the user needs to know and to understand to be able to make productive the fragment the specialist produces.”
  • “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. If they demand little of themselves, they will remain stunted. If they demand a good deal of themselves, they will grow to giant stature—without any more effort than is expended by the nonachievers.”
  • Meeting guidelines:
    • State at the outset of a meeting the specific purpose and contribution it is to achieve. Why are we having this meeting? Do we want a decision, do we want to inform, or do we want to make clear to ourselves what we should be doing?
    • QUESTION: What are some of the best practices in hosting meetings?
• STRENGTHS. Build on strengths, not weaknesses. The manager’s role is to make strength productive.
  • “Strong people always have strong weaknesses. Where there are peaks, there are valleys.”
  • Guiding question: What can he do uncommonly well?
    • IMPORTANT: Strengths are always contextual; what goes unrecognized or undervalued in one setting may be appreciated in another.
    • Seek performance, not conformance. Never talk of a “good man” but always a man who is “good” for some one task.
  • “By themselves, character and integrity do not accomplish anything. But their absence faults everything else.”
  • Effective executives make the strengths of the boss productive. What can my boss do really well? What has he done really well? What does he need to know to use his strength? What does he need to get from me to perform? He does not worry too much over what the boss cannot do.
• PRIORITIES. Do first things first, second things not at all.
  • Slough off an old activity before you start on a new one.
  • A great deal could be said about the analysis of priorities. The most important thing about priorities and posteriorities is, however, not intelligent analysis but courage. 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 problem;
    • 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.
    • OBSERVATION: Courage to pick a priority over others reveals intent.
  • “The effective executive does not, in other words, truly commit himself beyond the one task he concentrates on right now. Then he reviews the situation and picks the next one task that now comes first. Concentration—that is, the courage to impose on time and events his own decision as to what really matters and comes first—is the executive’s only hope of becoming the master of time and events instead of their whipping boy.”
• DECISION-MAKING. Think slow, act fast.
  • Guidelines to making good decisions:
    • Effective executives focus on a few key decisions rather than making many.
    • They think strategically and seek to identify constants rather than simply solving problems.
    • They value impact over technique and prioritize sound decision-making over cleverness.
    • They know when to base decisions on principles and when to act pragmatically, recognizing that the hardest decisions involve balancing the right and wrong compromises.
      • IMPORTANT: Pay attention to the context when making compromises. Not all situations allow for partial solutions.
      • “If I had to live with this for a long time, would I be willing to?” And if the answer is “No,” he keeps on working to find a more general, a more conceptual, a more comprehensive solution—one which establishes the right principle.
    • For them, the real challenge isn’t making the decision, but ensuring it’s effectively implemented.  A decision is only real when it leads to action, and while decision-making should be conceptually deep, the execution should be simple and practical.
      • Who has to know of this decision? What action has to be taken? Who is to take it? And what does the action have to be so that the people who have to do it can do it?
  • Truly unique events are rare, however. Whenever one appears, one has to ask: Is this a true exception or only the first manifestation of a new genus?
  • An incomplete explanation is often more dangerous than a totally wrong explanation.
  • Feedback has to be built into the decision to provide a continuous testing, against actual events, of the expectations that underlie a decision.
    • One needs organized information for the feedback. One needs reports and figures. But unless one builds one’s feedback around direct exposure to reality—unless one disciplines oneself to go out and look—one condemns oneself to a sterile dogmatism and with it to ineffectiveness.
    • QUESTION: Always ask, "what metric should we be using to measure success?"
  • A decision is a judgment. It is at best a choice between “almost right” and “probably wrong.”
  • People inevitably start out with an opinion; to ask them to search for the facts first is even undesirable. They will simply do what everyone is far too prone to do anyhow: look for the facts that fit the conclusion they have already reached. And no one has ever failed to find the facts he is looking for. The good statistician knows this and distrusts all figures—he either knows the fellow who found them or he does not know him; in either case he is suspicious.
  • Don’t argue hypotheses; test them.
    • Guiding questions: What do we have to know to test the validity of this hypothesis? What would the facts have to be to make this opinion tenable? What is the criterion of relevance?
      • Whenever one has to judge, one must have alternatives among which one can choose. A judgment in which one can only say “yes” or “no” is no judgment at all. Only if there are alternatives can one hope to get insight into what is truly at stake.
      • Example: There are a number of measurements for a proposal on a capital investment. One of these focuses on the length of time it will take before the original investment has been earned back. Another one focuses on the rate of profitability expected from the investment. A third one focuses on the present value of the returns expected to result from the investment, and so on.
  • Disagreement is needed to stimulate the imagination. One does not, to be sure, need imagination fo find the right solution to a problem.
  • There is one final question the effective decision-maker asks: “Is a decision really necessary?” One alternative is always the alternative of doing nothing.
    • One has to make a decision when a condition is likely to degenerate if nothing is done. This also applies with respect to opportunity. If the opportunity is important and is likely to vanish unless one acts with dispatch, one acts—and one makes a radical change.
  • Act if on balance the benefits greatly outweigh cost and risk. Act or do not act; but do not “hedge” or compromise. The surgeon who only takes out half the tonsils or half the appendix risks as much infection or shock as if he did the whole job.
    • But the effective decision-maker does not wait long—a few days, at the most a few weeks. If the “daemon” has not spoken by then, he acts with speed and energy whether he likes to or not.
• Further readings:
  • Measure What Matters
  • The Surprising Science of Meetings

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