Peter Drucker Review

“The cohesion and strength of our society depend increasingly on the integration of the psychological and social needs of the knowledge worker with the goals of organization and of industrial society.”

For those who want to achieve more results, effectiveness is the critical self-discipline. Not only can it be learned, but in his conclusion, Drucker argues that effectiveness must be learned for the sake of organizational goals and results as well as for worker opportunity and fulfillment.

(The Effective Executive, Conclusion)

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

Drucker’s main point is that strategic decisions are best made, not on the facts (which anyone can find to support a view) but through knowledge and testing of the various opinions on a situation.

To get adequate, well-rounded knowledge on a matter, an executive must have disagreement. Only disagreement and debate will provide the imagination and discovery of genuine alternative approaches. Then, to test for the best approach, an executive must determine “the criterion of relevance” by asking what evidence is necessary for reaching a decision and establishing the right measurement for ascertaining it.

Changing situations and events require new measurements of understanding what is relevant. Drucker gave the example of Secretary of Defense Robert McNamara’s reconceptualization of the measures of what to acquire so that leaders could focus on what mattered.

(The Effective Executive, chapter 7)

“Effective executives do not make a great many decisions. They concentrate on the important ones. They try to think through what is strategic and generic, rather than “solve problems.”

Executives are responsible for making strategic decisions well. To make them well, an executive must:

1. Understand what he or she is facing.
2. Understand what must be achieved.
3. Pick a solution that accomplishes what needs to be achieved.
4. Turn decisions into actions.
5. Get feedback to understand reality.

Making the right decision requires understanding the nature of a situation. Is it a general problem that is causing various issues? Is it a symptom of a larger problem? Or is it a one-of-a-kind issue? According to Drucker, a general problem requires a principle or a rule that can be applied in various ways, while a one-of-a-kind problem needs a specific solution.

Theodor Vail, the Bell Telephone Company (later AT&T) president, faced four general problems that required rules or principles. For example, Vail recognized that Bell’s dominance and lack of competition would cause its service to stagnate. The solution was Bell Labs, which forced the company to innovate and change and provide first-rate service. This was a general rule or principle used to address a general problem.

Next, a decision-maker needs to understand “what the decision has to accomplish.” (130) Whatever the objectives or conditions for success are, they need to be identified. In addition, what needs to be accomplished should be accomplished minimally. In other words, a minimal viable product (MVP) is needed.

When the objectives are known, an executive can decide what is right and what would be wrong. Drucker gives the example of the Cuban Missile Crisis. President Kennedy knew what the goal was. He knew what had to be accomplished. Therefore, he was able to determine the right solution and what would be an acceptable and unacceptable compromise.

Next, the right solution must be acted upon. It must be implemented. Drucker identifies four questions, including who needs to know about the decision and what needs to be done to make the decision doable. (136)

The last element of strategic decision-making is feedback. The point is that an executive needs to go to the source to find out if a decision or a solution is being implemented and what the results are. Drucker uses the example of the military. Generals need to see what is happening on the fighting line to understand reality.

(The Effective Executive, chapter 6)

“The more one can concentrate time, effort, and resources, the greater the number and diversity of tasks one can actually perform.”

Getting a lot of the right things done requires focusing on one, or at most, two things at a time. Drucker gives an example of an executive who focused on one thing–turning his pharmaceutical company into a research organization. When accomplished, the executive, once again, identified the most important task: going international. The point is that the executive focused on his most important task. This led to uncommon success.

In order to focus on the most important task, Drucker advised putting present tasks on trial. Present tasks are the result of past decisions and circumstances. They may no longer be necessary or important. To determine if a task is a waste of time or not, Drucker recommends asking: “If we did not already do this, would we go into it now?” (104)

Next, Drucker warned about pressures. Pressures cause executives to prioritize too many things. To avoid this, Drucker recommends setting posteriorities: things that one decides to stop doing. This is scary but necessary for freeing up time for the most important, such as external opportunities.

Getting the most important things done, one at a time, according to Drucker, is not only the key to getting a lot done, but it is also an act of courage and concentration that leads to significant results.

(The Effective Executive, chapter 5)

“To make strength productive is the unique purpose of organization.”

Finding out what people do well and putting their strengths to productive use is a critical executive responsibility.

Strength or talent should be the main criterion for staffing decisions. A person’s strength matters more than his weakness. It matters more than personality. Abraham Lincoln’s decision to promote General Grant to lead the Union Army during the American Civil War and General George Marshall’s selection of generals before WWII are examples Drucker gives.

Next, an executive must find out what his boss’s strength is and endeavor to make it more effective. Doing so will increase organizational results and lead to more opportunities.

Finally, an executive needs knowledge of his or her own strengths. Understanding what they are and putting them to productive use increases opportunity and possibility for one’s team and organization.

Executives who focus on strengths instead of weaknesses see opportunities, make productive decisions, and achieve more results.

(The Effective Executive, chapter 4)

“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.”

Focusing on what one should contribute to others, to the organization, and on what others should be held accountable for in terms of contribution is what makes people and organizations effective. Drucker encourages the view that contribution consists of making one’s knowledge productive and useful for others in what they need to contribute.

Drucker recommends asking: what can I contribute to organizational results? What does your contribution require me to contribute? Where should you be held accountable for your contribution to the organization?

Focusing on what one should contribute enables an executive to rise to new levels of responsibility and rise above The Peter Principle. It forces one to think through one’s responsibility toward making a successful organization in terms of results, values, and leader development.

Drucker also identifies contribution and performance as critical for human relations in the workplace. Without it communication will become ineffective, teamwork will not occur, self-development will become misdirected, and people will not reach their potential.

(The Effective Executive, chapter 3)

“Effective executives…do not start with their tasks. They start with their time. And they do not start out with planning. They start by finding out where their time actually goes.”

To be effective, executives must know how they use their time. Next, they must know what activities waste their time. Finally, they must consolidate time to work on the most important priorities for results.

To manage time well, one’s use of time must be understood. Drucker makes a powerful case that memory does not allow one to understand how time is actually spent. A time log usually astonishes the recorder, making him or her aware of time spent on things that do not produce results.

The second step is to analyze how one uses time. There are tasks and activities that should be abandoned or delegated such as unnecessary meetings, business travel, or official dinners. Drucker recommends asking what would happen if an activity were stopped. And if someone else can do the job better. Other things that waste time include yearly crises and corporate organizational issues. These need to be addressed once and for all.

Finally, Drucker explains the importance of time consolidation. He recounts an executive who worked on important tasks for 90 minutes with no interruptions. Then he spent 30 minutes completing urgent tasks. In addition, he consolidated his workdays for important tasks, urgent issues, and scheduled meetings. Drucker marveled at his effectiveness.

Time is an irreplaceable resource. Drucker considers it the beginning of effectiveness.

(The Effective Executive, chapter 2)