A Summary of The Effective Executive
Don’t we all want to be effective in what we do?
In The Effective Executive Peter Drucker, one of the most renowned economists and management researchers, shows us how we can be more effective leaders.
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| Photo by Ben Rosett on Unsplash |
To me, The Effective Executive was a captivating read. Much of the modern literature in leadership and management draws on the original findings of this book.
In this article, I’ll give you an overview of the contents and share my insights.
Definition of an effective leader
The Oxford Dictionary defines “effective” as producing the result that is wanted or intended; producing a successful result.
That’s how an effective leader should be: producing a successful result. Peter Drucker describes 8 virtues that make an effective leader:
- As an effective leader, you need to know what needs to be done.
- Do the things that are right for the organization.
- Develop action plans.
- Take responsibility for decisions.
- Take responsibility for communication.
- Focus on opportunities rather than problems.
- Ensure productive meetings.
- Drucker highlights the 8th virtue and elevates it to the level of a rule: An effective leader listens and only speaks when everything has been said.
Effectiveness can be learned
This is a good thing, right? After all, we can learn to be effective and improve at what we do!
How?
According to Peter Drucker, effective leaders have five characteristics that can be learned and built:
- They manage time well.
- Results-oriented work (results » work / method)
- Building on strengths
- Focus on a few areas/set priorities
- Make effective decisions
5 measures to become more effective
1. The right use of time
To work on very important topics, you need a longer block of time where you can work uninterrupted.
An effective manager deals with the time factor as follows:
- Time tracking → Time management → Time consolidation
Time is the only truly scarce resource in contrast to money and other resources.
2. What can I contribute?
An essential question that effective leaders ask themselves is: “How can I contribute to the success of my organization?”
Drucker tells the story of a management consultant who asked exactly that: At the start of every project, he visits the managers involved and asks them about their contribution to the success of the company.
Many solely focus on their responsibilities. This, however, is not their real contribution. Only the managers who actively ask themselves what they can contribute to the success of the company are truly effective.
What do you contribute?
3. Using strengths productively
In this chapter, Drucker describes that it is much more important to harness strengths than to reward the absence of weaknesses (what we typically do instead).
Effective managers deploy employees according to their strengths. If you do that, the whole team is more effective.
Think, for example of the Confederate generals in the American Civil War. Yes, they lost, but they kept the North for a long time - much longer as their resource should have made possible. Why? Their generals had talents only in a few areas. However, they used their strengths effectively.
4. First things first
To be effective, you must set priorities. Important things should be done first. Less important things should not be done at all
Ideally, an effective manager only works on one important topic at a time (in addition to the numerous issues that are externally defined). Start another important topic, only if the previous one is completed.
And if you work on an important topic: take time and focus your attention.
5a. The elements of the decision-making process
One of the most important leadership tasks is to make decisions.
An effective manager does not make many decisions (quantity), but only a few important ones. If you micro-manage and make all the decisions in your team alone, it can lead to decision fatigue.
Decision-making is a cognitive control process and the ability to make decisions decreases after long and frequent decision-making processes.
In this chapter, Peter Drucker proposes a 5-step decision-making process. I found this particularly intriguing, so I highlighted it in detail in the learnings at the end of my book summary.
5b. Effective decisions
What are effective decisions?
Effective decisions must not immediately lead to consensus. This can be difficult as most human beings want harmony. However, discussions and different points of view are tremendously important. This is the only way the decision-maker can get different perspectives on the facts.
Alfred Sloan (former CEO of General Motors) knew that. He is said to have always stopped meetings (in which decisions were made) immediately if there was no discussion on decisions.
What is more: Effective decisions focus on the essentials. There shouldn’t be too much fluff involved!
My core learnings from The Effective Executive
Make meetings more effective
We are all striving for more effective meetings.
Countless hours and a lot of energy are lost in ineffective meetings. Two things stand out and can change how effective (and efficient) a meeting is:
- A meeting must be focused.
- The follow-up (who is doing what after the meeting and when we meet again) must be clear to all participants. Sending out a short memo after the meeting supports that even more.
Deep Work
Peter Drucker didn’t use the modern term Deep Work, but that was what he essentially meant: To work on a vital topic, we need a longer block of time.
Disruptions should be avoided at all costs.
“There is no crisis that cannot wait 90 minutes.” - Peter F. Drucker
Yes, our world has been moving faster since Peter Drucker released his book in 1967 and the time cap should be slightly decreased, but in my opinion, it is still valid today.
If we work on really important things, we need to give them our full attention.
Use the strengths of your team
At the time Drucker published his book, it was revolutionary as it proposed a novel approach to leadership.
Back in the day, western assessment methods for employees were not optimal. They assessed weaknesses rather than strengths. The Japanese method, on the other hand, contrasts this with an approach towards lifetime employment.
Based on these assumptions, Drucker proposed a method of employee evaluation consisting of 4 points:
- What has the person done well? In which areas is the person able to perform particularly well?
- What knowledge and skills does the person need to develop to fully leverage their strengths effectively?
- If I had a child, would I be comfortable with this person as their manager? Why or why not?
- If you want strong team members, you have to be able to accept their weaknesses.
In my opinion, the third question is particularly captivating: it creates a different perspective on how you see the other person.
Decision Making
Drucker presents a five-step approach for an effective decision-making process
- Is it a generic situation, or an exceptional situation?
- If it is generic, apply a rule or a principle, and don’t drain your decision capacity too much.
- If it is an exception, deal with it on an individual level.
- Make a clear specification of what the decision is intended to achieve. This consists of (i) an exact definition of the boundary conditions as well as (ii) the solution the approach must fulfill.
- You must always start with what is right and not what is still acceptable. Provisional solutions often remain longer than you think at the beginning.
- Transform decisions into actions
- Build feedback into the decision.
Effective decisions do not immediately lead to consensus. On the contrary: it is a good sign when decisions lead to discussions (possibly even arguments).
Thank you so much for reading my deep dive into The Effective Executive.
I hope you’ve enjoyed my article and learned something. If you like in-depth book summaries, and personal stories but also enjoy short-form articles please drop by again.
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Cheers, Matthias