The Effective Executive by Peter Drucker

Quotes

It’s just as important to review decisions periodically— at a time that’s been agreed on in advance— as it is to make them carefully in the first place. That way, a poor decision can be corrected before it does real damage. These reviews can cover anything from the results to the assumptions underlying the decision.

Good executives focus on opportunities rather than problems. Problems have to be taken care of, of course; they must not be swept under the rug. But problem solving, however necessary, does not produce results. It prevents damage. Exploiting opportunities produces results.

We’ve just reviewed eight practices of effective executives. I’m going to throw in one final, bonus practice. This one’s so important that I’ll elevate it to the level of a rule: Listen first, speak last.

It is hard to realize today that “government” during the American Civil War a hundred years ago meant the merest handful of people. Lincoln’s Secretary of War had fewer than fifty civilian subordinates, most of them not “executives” and policy- makers but telegraph clerks. The entire Washington establishment of the U.S. government in Theodore Roosevelt’s time, around 1900, could be comfortably housed in any one of the government buildings along the Mall today.

In other words, up to recent times, the major problem of organization was efficiency in the performance of the manual worker who did what he had been told to do. Knowledge workers were not predominant in organization.

Knowledge work is not defined by quantity. Neither is knowledge work defined by its costs. Knowledge work is defined by its results.

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.

When the patient says, “Doctor, I can’t sleep. I haven’t been able to go to sleep the last three weeks,” he is telling the doctor what the priority area is. Even if the doctor decides, upon closer examination, that the sleeplessness is a fairly minor symptom of a much more fundamental condition he will do something to help the patient to get a few good nights’ rest. But events rarely tell the executive anything, let alone the real problem. For the doctor, the patient’s complaint is central because it is central to the patient. The executive is concerned with a much more complex universe. What events are important and relevant and what events are merely distractions the events themselves do not indicate. They are not even symptoms in the sense in which the patient’s narrative is a clue for the physician.

If the executive lets the flow of events determine what he does, what he works on, and what he takes seriously, he will fritter himself away “operating.” He may be an excellent man. But he is certain to waste his knowledge and ability and to throw away what little effectiveness he might have achieved.

Every executive, whether his organization is a business or a research laboratory, a government agency, a large university, or the air force, sees the inside— the organization— as close and immediate reality. He sees the outside only through thick and distorting lenses, if at all.

Most of the mass of the amoeba is directly concerned with survival and procreation. Most of the mass of the higher animal— its resources, its food, its energy supply, its tissues— serves to overcome and offset the complexity of the structure and the isolation from the outside.

The truly important events on the outside are not the trends. They are changes in the trends.

We will have to learn to build organizations in such a manner that any man who has strength in one important area is capable of putting it to work

This, however, is something very different from the universal expert, who is as unlikely to occur as the universal genius. Instead we will have to learn how to make better use of people who are good in any one of these areas.

Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control.

Effective executives focus on outward contribution. They gear their efforts to results rather than to work. They start out with the question, “What results are expected of me?” rather than with the work to be done, let alone with its techniques and tools.

Effective executives build on strengths— their own strengths, the strengths of their superiors, colleagues, and subordinates; and on the strengths in the situation, that is, on what they can do. They do not build on weakness. They do not start out with the things they cannot do.

Effective executives concentrate on the few major areas where superior performance will produce outstanding results. They force themselves to set priorities and stay with their priority decisions. They know that they have no choice but to do first things first— and second things not at all. The alternative is to get nothing done.

Effective executives, finally, make effective decisions. They know that this is, above all, a matter of system— of the right steps in the right sequence.

Wherever knowledge workers perform well in large organizations, senior executives take time out, on a regular schedule, to sit down with them, sometimes all the way down to green juniors, and ask: “What should we at the head of this organization know about your work? What do you want to tell me regarding this organization? Where do you see opportunities we do not exploit? Where do you see dangers to which we are still blind? And, all together, what do you want to know from me about the organization?”

Among the effective executives I have had occasion to observe, there have been people who make decisions fast, and people who make them rather slowly. But without exception, they make personnel decisions slowly and they make them several times before they really commit themselves.

People-decisions are time-consuming, for the simple reason that the Lord did not create people as “resources” for organization. They do not come in the proper size and shape for the tasks that have to be done in organization— and they cannot be machined down or recast for these tasks. People are always “almost fits” at best. To get the work done with people (and no other resource is available) therefore requires lots of time, thought, and judgment.

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.

The first task here is to identify the time-wasters which follow from lack of system or foresight. The symptom to look for is the recurrent “crisis,” the crisis that comes back year after year.

There is a fairly reliable symptom of overstaffing. If the senior people in the group— and of course the manager in particular— spend more than a small fraction of their time, maybe one tenth, on “problems of human relations,” on feuds and frictions, on jurisdictional disputes and questions of cooperation, and so on, then the work force is almost certainly too large.

Meetings, therefore, need to be purposefully directed. An undirected meeting is not just a nuisance; it is a danger. But above all, meetings have to be the exception rather than the rule.

Wherever a time log shows the fatty degeneration of meetings— whenever, for instance, people in an organization find themselves in meetings a quarter of their time or more— there is time-wasting malorganization.

As a rule, meetings should never be allowed to become the main demand on an executive’s time.

that should be in one job or in one component is spread over several jobs or several components. They signify that responsibility is diffused and that information is not addressed to the people who need it.

The final step in time management is therefore to consolidate the time that record and analysis show as normally available and under the executive’s control. There are a good many ways of doing this. Some people, usually senior men, work at home one day a week; this is a particularly common method of time- consolidation for editors or research scientists.

The man who focuses on efforts and who stresses his downward authority is a subordinate no matter how exalted his title and rank. But the man who focuses on contribution and who takes responsibility for results, no matter how junior, is in the most literal sense of the phrase, “top management.” He holds himself accountable for the performance of the whole.

To ask, “What can I contribute?” is to look for the unused potential in the job. And what is considered excellent performance in a good many positions is often but a pale shadow of the job’s full potential of contribution.

For 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.

  1. Individual self-development in large measure depends on the focus on contributions. The man who asks of himself, “What is the most important contribution I can make to the performance of this organization?” asks in effect, “What self-development do I need? What knowledge and skill 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?” 4. The executive who focuses on contribution also stimulates others to develop themselves, whether they are subordinates, colleagues, or superiors. He sets standards which are not personal but grounded in the requirements of the task. At the same time, they are demands for excellence. For they are demands for high aspiration, for ambitious goals, and for work of great impact.

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.

The effective man always states at the outset of a meeting the specific purpose and contribution it is to achieve.

The effective executive fills positions and promotes on the basis of what a man can do. He does not make staffing decisions to minimize weaknesses but to maximize strength.

Every one of Lee’s generals, from Stonewall Jackson on, was a man of obvious and monumental weaknesses. But these failings Lee considered— rightly— to be irrelevant. Each of them had, however, one area of real strength— and it was this strength, and only this strength, that Lee utilized and made effective. As a result, the “well- rounded” men Lincoln had appointed were beaten time and again by Lee’s “single- purpose tools,” the men of narrow but very great strength.

Effective executives know that their subordinates are paid to perform and not to please their superiors.

Effective executives never ask “How does he get along with me?” Their question is “What does he contribute?” Their question is never “What can a man not do?” Their question is always “What can he do uncommonly well?” In staffing they look for excellence in one major area, and not for performance that gets by all around.

All this is obvious, one might say. Why then, is it not done all the time? Why are executives rare who make strength productive— especially the strength of their associates? Why did even a Lincoln staff from weakness three times before he picked strength? The main reason is that the immediate task of the executive is not to place a man; it is to fill a job. The tendency is therefore to start out with the job as being a part of the order of nature. Then one looks for a man to fill the job. It is only too easy to be misled this way into looking for the “least misfit”— the one man who leaves least to be desired. And this is invariably the mediocrity.

One implication is that the men who build first-class executive teams are not usually close to their immediate colleagues and subordinates. Picking people for what they can do rather than on personal likes or dislikes, they seek performance, not conformance. To ensure this outcome, they keep a distance between themselves and their close colleagues.

These were all warm men, in need of close human relationships, endowed with the gift of making and keeping friends. 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 of strength.

The rule is simple: Any job that has defeated two or three men in succession, even though each had performed well in his previous assignments, must be assumed unfit for human beings. It must be redesigned.

The second rule for staffing from strength is to make each job demanding and big. It should have challenge to bring out whatever strength a man may have. It should have scope so that any strength that is relevant to the task can produce significant results.

Every survey of young knowledge workers—physicians in the Army Medical Corps, chemists in the research lab, accountants or engineers in the plant, nurses in the hospital—produces the same results. The ones who are enthusiastic and who, in turn, have results to show for their work, are the ones whose abilities are being challenged and used. Those that are deeply frustrated all say, in one way or another: “My abilities are not being put to use.” The young knowledge worker whose job is too small to challenge and test his abilities either leaves or declines rapidly into premature middle-age, soured, cynical, unproductive. Executives everywhere complain that many young men with fire in their bellies turn so soon into burned-out sticks. They have only themselves to blame: They quenched the fire by making the young man’s job too small.

Then it asks four questions: a. “What has he [or she] done well?” b. “What, therefore, is he likely to be able to do well?” c. “What does he have to learn or to acquire to be able to get the full benefit from his strength?” d. “If I had a son or daughter, would I be willing to have him or her work under this person?” i. “If yes, why?” ii. “If no, why?”

There have been few great commanders in history who were not self-centered, conceited, and full of admiration for what they saw in the mirror.

To be more requires a man who is conceited enough to believe that the world—or at least the nation—really needs him and depends on his getting into power.

But Marshall also insisted that to relieve a man from command was less a judgment on the man than on the commander who had appointed him. “The only thing we know is that this spot was the wrong one for the man,” he argued. “This does not mean that he is not the ideal man for some other job. Appointing him was my mistake, now it’s up to me to find what he can do.”

Marshall, for instance, again and again came to George Patton’s rescue and made sure that this ambitious, vain, but powerful wartime commander would not be penalized for the absence of the qualities that make a good staff officer and a successful career soldier in peacetime. Yet Marshall himself personally loathed the dashing beau sabreur of Patton’s type.

This should be elementary prudence. Contrary to popular legend, subordinates do not, as a rule, rise to position and prominence over the prostrate bodies of incompetent bosses. If their boss is not promoted, they will tend to be bottled up behind him. And if their boss is relieved for incompetence or failure, the successor is rarely the bright, young man next in line. He usually is brought in from the outside and brings with him his own bright, young men. Conversely, there is nothing quite as conducive to success as a successful and rapidly promoted superior.

But way beyond prudence, making the strength of the boss productive is a key to the subordinate’s own effectiveness. It enables him to focus his own contribution in such a way that it finds receptivity upstairs and will be put to use. It enables him to achieve and accomplish the things he himself believes in.

It is, I submit, fairly obvious to anyone who has ever looked that people are either “readers” or “listeners” (excepting only the very small group who get their information through talking, and by watching with a form of psychic radar the reactions of the people they talk to;

It is generally a waste of time to talk to a reader. He only listens after he has read. It is equally a waste of time to submit a voluminous report to a listener. He can only grasp what it is all about through the spoken word.

Some people need to have things summed up for them in one page. (President Eisenhower needed this to be able to act.) Others need to be able to follow the thought processes of the man who makes the recommendation and therefore require a big report before anything becomes meaningful to them.

strengths of the boss and to try to make them productive always affects the “how” rather than the “what.” It concerns the order in which different areas, all of them relevant, are presented, rather than what is important or right.

By the time one has reached adulthood, one has a pretty good idea as to whether one works better in the morning or at night. One usually knows whether one writes best by making a great many drafts fast, or by working meticulously on every sentence until it is right. One knows whether one speaks well in public from a prepared text, from notes, without any prop, or not at all. One knows whether one works well as a member of a committee or better alone—or whether one is altogether unproductive as a committee member. Some people work best if they have a detailed outline in front of them; that is, if they have thought through the job before they start it. Others work best with nothing more than a few rough notes. Some work best under pressure. Others work better if they have a good deal of time and can finish the job long before the deadline. Some are “readers,” others “listeners.”

The effective executive looks upon people including himself as an opportunity. He knows that only strength produces results. Weakness only produces headaches—and the absence of weakness produces nothing.

In human affairs, the distance between the leaders and the average is a constant. If leadership performance is high, the average will go up. The effective executive knows that it is easier to raise the performance of one leader than it is to raise the performance of a whole mass.

Concentration is necessary precisely because the executive faces so many tasks clamoring to be done. For doing one thing at a time means doing it fast.

This is the “secret” of those people who “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.

Effective executives do not race. They set an easy pace but keep going steadily.

Effective executives periodically review their work programs—and those of their associates—and ask: “If we did not already do this, would we go into it now?” And unless the answer is an unconditional “Yes,” they drop the activity or curtail it sharply.

But it will not produce results as long as we maintain the traditional assumption that all programs last forever unless proven to have outlived their usefulness. The assumption should rather be that all programs outlive their usefulness fast and should be scrapped unless proven productive and necessary. Otherwise, modern government, while increasingly smothering society under rules, regulations, and forms, will itself be smothered in its own fat.

The executive who wants to be effective and who wants his organization to be effective polices all programs, all activities, all tasks. He always asks: “Is this still worth doing?”

Above all, the effective executive will slough off an old activity before he starts on a new one. This is necessary in order to keep organizational “weight control.” Without it, the organization soon loses shape, cohesion, and manageability. Social organizations need to stay lean and muscular as much as biological organisms.

Unless one has therefore built into the new endeavor the means for bailing it out when it runs into heavy weather, one condemns it to failure from the start. The only effective means for bailing out the new are people who have proven their capacity to perform. Such people are always already busier than they should be. Unless one relieves one of them of his present burden, one cannot expect him to take on the new task. The alternative—to “hire in” new people for new tasks—is too risky. One hires new people to expand on already established and smoothly running activity. But one starts something new with people of tested and proven strength, that is, with veterans.

DuPont has been doing so much better than any other of the world’s large chemical companies largely because it abandons a product or a process before it begins to decline. DuPont does not invest scarce resources of people and money into defending yesterday.

There are always more productive tasks for tomorrow than there is time to do them and more opportunities than there are capable people to take care of them—not to mention the always abundant problems and crises. A decision therefore has to be made as to which tasks deserve priority and which are of less importance. The only question is which will make the decision—the executive or the pressures.

Typically, there will then be no time for the most time-consuming part of any task, the conversion of decision into action.

And the pressures always favor yesterday.

For the pressures always favor what goes on inside.

The job is, however, not to set priorities. That is easy. Everybody can do it. The reason why so few executives concentrate is the difficulty of setting “posteriorities”—that is, deciding what tasks not to tackle—and of sticking to the decision.

A good many studies of research scientists have shown that achievement (at least below the genius level of an Einstein, a Niels Bohr, or a Max Planck) depends less on ability in doing research than on the courage to go after opportunity.

They know that the most time-consuming step in the process is not making the decision but putting it into effect. Unless a decision has “degenerated into work” it is not a decision; it is at best a good intention. This means that, while the effective decision itself is based on the highest level of conceptual understanding, the action to carry it out should be as close as possible to the working level and as simple as possible.

As Sloan has recounted in his recent book, My Years with General Motors,† the company he took over in 1922 was a loose federation of almost independent chieftains. Each of these men ran a unit which a few short years before had still been his own company—and each ran it as if it were still his own company. ■ There were two traditional ways of handling such a situation. One was to get rid of the strong independent men after they had sold out their business.

The alternative was to leave the former owners in their commands with a minimum of interference from the new central office.

By far the most common mistake is to treat a generic situation as if it were a series of unique events; that is, to be pragmatic when one lacks the generic understanding and principle. This inevitably leads to frustration and futility.

The effective decision-maker, therefore, always assumes initially that the problem is generic. He always assumes that the event that clamors for his attention is in reality a symptom. He looks for the true problem. He is not content with doctoring the symptom alone.

One of the most obvious facts of social and political life is the longevity of the temporary

in fact, a decision on principle does not, as a rule, take longer than a decision on symptoms and expediency.

The decision-maker also always tests for signs that something atypical, something unusual, is happening; he always asks: “Does the explanation explain the observed events and does it explain all of them?”; he always writes out what the solution is expected to make happen—make automobile accidents disappear, for instance—and then tests regularly to see if this really happens; and finally, he goes back and thinks the problem through again when he sees something atypical, when he finds phenomena his explanation does not really explain, or when the course of events deviates, even in details, from his expectations.

But clear thinking about the boundary conditions is needed also to identify the most dangerous of all possible decisions: the one that might—just might—work if nothing whatever goes wrong. These decisions always seem to make sense. But when one thinks through the specifications they have to satisfy, one always finds that they are essentially incompatible with each other. That such a decision might succeed is not impossible—it is merely grossly improbable. The trouble with miracles is not, after all, that they happen rarely; it is that one cannot rely on them.

One has to start out with what is right rather than what is acceptable (let alone who is right) precisely because one always has to compromise in the end. But if one does not know what is right to satisfy the specifications and boundary conditions, one cannot distinguish between the right compromise and the wrong compromise—and will end up by making the wrong compromise.

no decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility. Until then, there are only good intentions.

Theodore Vail’s decision that the business of the Bell System was service might have remained dead letter but for the yardsticks of service performance which he designed to measure managerial performance. Bell managers were used to being measured by the profitability of their units, or at the least, by cost. The new yardsticks made them accept rapidly the new objectives.

All military services have long ago learned that the officer who has given an order goes out and sees for himself whether it has been carried out.

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 averages serve the purposes of the insurance company, but they are meaningless, indeed misleading, for personnel management decisions. The great majority of all accidents occur in one or two places in the plant. The great bulk of absenteeism is in one department.

The personnel actions to which dependence on the averages will lead—for instance, the typical plantwide safety campaign—will not produce the desired results, and may indeed make things worse.

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 judgments. The first rule in decision-making is that one does not make a decision unless there is disagreement.

The effective decision-maker does not start out with the assumption that one proposed course of action is right and that all others must be wrong. Nor does he start out with the assumption, “I am right and he is wrong.” He starts out with the commitment to find out why people disagree.

“De minimis non curat praetor” [The magistrate does not consider trifles], said the Roman law almost two thousand years ago—but many decision-makers still need to learn it.

Similarly, the effective decision-maker either acts or he doesn’t act. He does not take half-action. This is the one thing that is always wrong, and the one sure way not to satisfy the minimum specifications, the minimum boundary conditions.

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.

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