The Effective Executive: The Definitive Guide to Getting the Right Things Done (Harperbusiness Essentials)

by Peter F. Drucker

Most books on decision-making tell the reader: “First find the facts.” But executives who make effective decisions know that one does not start with facts. One starts with opinions. These are, of course, nothing but untested hypotheses and, as such, worthless unless tested against reality. To determine what is a fact requires first a decision on the criteria of relevance, especially on the appropriate measurement. This is the hinge of the effective decision, and usually its most controversial aspect. Finally, the effective decision does not, as so many texts on decision-making proclaim, flow from a consensus on the facts. The understanding that underlies the right decision grows out of the clash and conflict of divergent opinions and out of the serious consideration of competing alternatives.

The effective executive encourages opinions. But he insists that the people who voice them also think through what it is that the “experiment”—that is, the testing of the opinion against reality—would have to show. The effective executive, therefore, asks: “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?” And he makes it a habit—in himself and in the people with whom he works—to think through and spell out what needs to be looked at, studied, and tested. He insists that people who voice an opinion also take responsibility for defining what factual findings can be expected and should be looked for. Perhaps the crucial question here is: “What is the criterion of relevance?” This, more often than not, turns on the measurement appropriate to the matter under discussion and to the decision to be reached. Whenever one analyzes the way a truly effective, a truly right, decision has been reached, one finds that a great deal of work and thought went into finding the appropriate measurement.

disagreement. The effective decision-maker, therefore, organizes disagreement. This protects him against being taken in by the plausible but false or incomplete. It gives him the alternatives so that he can choose and make a decision, but also so that he is not lost in the fog when his decision proves deficient or wrong in execution. And it forces the imagination—his own and that of his associates. Disagreement converts the plausible into the right and the right into the good decision.

There is one final question the effective decision-maker asks: “Is a decision really necessary?” One alternative is always the alternative of doing nothing. Every decision is like surgery. It is an intervention into a system and therefore carries with it the risk of shock. One does not make unnecessary decisions any more than a good surgeon does unnecessary surgery. Individual decision-makers, like individual surgeons, differ in their styles. Some are more radical or more conservative than others. But by and large, they agree on the rules. 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.

The great majority of decisions will lie between these extremes. The problem is not going to take care of itself; but it is unlikely to turn into degenerative malignancy either. The opportunity is only for improvement rather than for real change and innovation; but it is still quite considerable. If we do not act, in other words, we will in all probability survive. But if we do act, we may be better off. In this situation the effective decision-maker compares effort and risk of action to risk of inaction. There is no formula for the right decision here. But the guidelines are so clear that decision in the concrete case is rarely difficult. They are: • Act if on balance the benefits greatly outweigh cost and risk; and • 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. And he has not cured the condition, has indeed made it worse. He either operates or he doesn’t. 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.

The decision is now ready to be made. The specifications have been thought through, the alternatives explored, the risks and gains weighed. Everything is known. Indeed, it is always reasonably clear by now what course of action must be taken. At this point the decision does indeed almost “make itself.” And it is at this point that most decisions are lost. It becomes suddenly quite obvious that the decision is not going to be pleasant, is not going to be popular, is not going to be easy. It becomes clear that a decision requires courage as much as it requires judgment. There is no inherent reason why medicines should taste horrible—but effective ones usually do. Similarly, there is no inherent reason why decisions should be distasteful—but most effective ones are. One thing the effective executive will not do at this point. He will not give in to the cry, “Let’s make another study.” This is the coward’s way—and all the coward achieves is to die a thousand deaths where the brave man dies but one. When confronted with the demand for “another study” the effective executive asks: “Is there any reason to believe that additional study will produce anything new? And is there reason to believe that the new is likely to be relevant?” And if the answer is “no”—as it usually is—the effective executive does not permit another study. He does not waste the time of good people to cover up his own indecision.

But at the same time he will not rush into a decision unless he is sure he understands it. Like any reasonably experienced adult, he has learned to pay attention to what Socrates called his “daemon”: the inner voice, somewhere in the bowels, that whispers, “Take care.” Just because something is difficult, disagreeable, or frightening is no reason for not doing it if it is right. But one holds back—if only for a moment—if one finds oneself uneasy, perturbed, bothered without quite know...

Nine times out of ten the uneasiness turns out to be over some silly detail. But the tenth time one suddenly realizes that one has overlooked the most important fact in the problem, has made an elementary blunder, or has misjudged altogether. The tenth time one suddenly wakes up at night and realizes—as Sherlock Holmes did in the famous story—that the “most significant thing is that the hound of Baskerville didn’t bark.” 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. Executives are ...

In looking back on the arguments and flow of these chapters and on their findings, another and quite different aspect of executive effectiveness emerges, however. Effectiveness reveals itself as crucial to a man’s self-development; to organization development; and to the fulfillment and viability of modern society. 1. The first step toward effectiveness is a procedure: recording where the time goes. This is mechanical if not mechanistic. The executive need not even do this himself; it is better done by a secretary or assistant. Yet if this is all the executive ever does, he will reap a substantial improvement. The results should be fast, if not immediate. If done with any continuity, recording one’s time will also prod and nudge a man toward the next steps for greater effectiveness. The analysis of the executive’s time, the elimination of the unnecessary time-wasters, already requires some action. It requires some elementary decisions. It requires some changes in a man’s behavior, his relationships, and his concerns. It raises searching questions regarding the relative importance of different uses of time, of different activities and of their goals. It should affect the level and the quality of a good deal of work done. Yet this can perhaps still be done by going down a checklist every few months, that is, by following a form. It still concerns itself only with efficiency in the utilization of a scarce resource—namely, time. 2. The next step, however, in which the ex...

The knowledge worker demands economic rewards too. Their absence is a deterrent. But their presence is not enough. He needs opportunity, he needs achievement, he needs fulfillment, he needs values. Only by making himself an effective executive can the knowledge worker obtain these satisfactions. Only executive effectiveness can enable this society to harmonize its two needs: the needs of organization to obtain from the individual the contribution it needs, and the need of the individual to have organization serve as his tool for the accomplishment of his purposes. Effectiveness must be learned.

WHEN PETER DRUCKER was asked at the end of his long life what his greatest contribution was, he answered: “What I would say is I helped a few good people be effective in doing the right things.” Of the millions of words Drucker wrote through six groundbreaking decades, not one is more important than effective. Effectiveness, he said, is “doing the right things well.”

From 1980 through 2003, the investment firm Edward Jones retained Peter Drucker as consultant, adviser, and teacher for its top executives. During that time, the company grew from 200 offices in 28 U.S. states to more than 9,000 offices throughout the United States, Canada, and the United Kingdom. Early on, Edward Jones’s Managing Partner wrote to Drucker that he and his team had read Drucker’s 1973 classic, Management: Tasks, Responsibilities, Practices, so many times that “our copies are literally worn out.” Drucker replied: I have only one negative comment, but a pretty important one. Stop talking about “Druckerizing” your organization. Indeed, stop reading in very dubious sources. The job ahead of you is to “Jonesize” your organization—and only if you accept this would I be of any help to you. Otherwise I would rapidly become a menace—which I refuse to be. For Edward Jones, this translated into using Drucker’s teachings not to become a generically “effective” company, but rather to more effectively carry out the company’s distinctive mission of democratizing investing and financial planning.

Distinctiveness alone, however, is not a sufficient guiding principle. “The great majority of executives,” Drucker writes, “are occupied with efforts rather than with results. They worry over what the organization and their superiors ‘owe’ them and should do for them. And they are conscious above all of the authority they ‘should have.’ As a result, they render themselves ineffectual.” The effective executive aims beyond himself by focusing on contribution. This requires turning one’s attention away from “one’s own specialty, one’s own narrow skills, one’s own department,” Drucker writes, “and toward the performance of the whole.”

Don Keough, the legendarily effective former president of the Coca-Cola Company, was one of Drucker’s consulting clients. Recalling their time together, Keough said, “He would tell me after each session, ‘Don’t tell me you had a wonderful meeting with me. Tell me what you are going to do on Monday that’s different.’

The Effective Executive is, in short, Drucker’s gift to you so that you can learn to be yourself, to aim beyond yourself, and to work with courage. Now don’t tell me you had a wonderful time reading this book. Tell me instead: What will you do on Monday that’s different?