The Effective Executive

by Peter F. Drucker

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.

Point is, what is right is relative. And the effectiveness of the right decision to realize opportunity depends on setting the conditions. Furthermore, what is wrong also becomes apparent when the conditions are set.

“I shall not tell you what to study, what to write, or what conclusions to come to. This is your task. My only instruction to you is to put down what you think is right as you see it. Don’t you worry about our reaction. Don’t you worry about whether we will like this or dislike that. And don’t you, above all, concern yourself with the compromises that might be needed to make your recommendations acceptable. There is not one executive in this company who does not know how to make every single conceivable compromise without any help from you. But he can’t make the right compromise unless you first tell him what ‘right’ is.”

For there are two different kinds of compromise.

“Half a loaf is better than no bread.”

“half a baby is worse than no baby at all.”

In the first instance, the boundary conditions are still being satisfied.

Half a baby, however, does not satisfy the boundary conditions.

One gains nothing in other words by starting out with the question: “What is acceptable?”

Fails to live up to the expectation of effective and excellent work by asking what is acceptable—that is, what can be compromised across the board to meet the minimum expectations Matt mullenweg tells a story of an early publishing engine he built that wasn’t pretty at all but published written text into online text within seconds or minutes—an order of magnitude faster and simpler than the alternative. That’s the important thing, and he compromised on everything else he could to do the important thing excellently rather than marginally well.

While thinking through the boundary conditions is the most difficult step in decision-making, converting the decision into effective action is usually the most time-consuming one.

In fact, no decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility.

Converting a decision into action requires answering several distinct questions: 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?

“What kind of people do we have available to make this decision effective? And what can they do?”

everyone can think what action commitments a specific decision requires, what work assignments follow from it, and what people are available to carry it out.

Finally, a feedback has to be built into the decision to provide a continuous testing, against actual events, of the expectations that underlie the decision.

presidents. It is that military organizations learned long ago that futility is the lot of most orders and organized the feedback to check on the execution of the order.

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.

he has learned from experience to distrust communications.

With the coming of the computer this will become even more important, for the decision-maker will, in all likelihood, be even further removed from the scene of action.

Then how could decentralized remote distributed work be effective and always taking action on decisions? How do you get feedback when you can go visit? You check the work has shipped—that is, that the new website page is posted, that the media announcement goes out everyday or drafts come in on time, you get regular updates and samples of work. You have to create small opportunities for people to ship work that you can use to evaluate effectiveness converting a decision into action.

abstractions can be relied on only if they are constantly checked against the concrete.

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.

Both, reports and seeing how the work is being done

executives who make effective decisions know that one does not start with facts. One starts with opinions.

Diametrically opposed to Jim Collins

People inevitably start out with an opinion; to ask them to search for the facts first is even undesirable.

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.

Maybe Jim Collins distinguishes facts from brutal facts. What are the ugly facts that contradict or make our opinions and models obsolete if not discounted?

The only rigorous method, the only one that enables us to test an opinion against reality, is based on the clear recognition that opinions come first—

Then no one can fail to see that we start out with untested hypotheses—in decision-making as in science the only starting point.

Collins recognizes that opinions are untested. “We are growing too fast” is an opinion that needs to be tested against the brutal facts. Or perhaps opinions are a matter of constraints, context, and strategy. Opinions only count in the face of constraints.

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.

“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?”

Hmm, using opinions to distinguish which facts to look for—that is, hypothesis, expectation, and then test against reality to get the relevant facts.

“What is the criterion of relevance?”

The most important metric

This, of course, is what made Theodore Vail’s conclusion that service was the business of the Bell System such an effective decision.

Service was the best context for the metric

The effective decision-maker assumes that the traditional measurement is not the right measurement. Otherwise, there would generally be no need for a decision; a simple adjustment would do.

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.

He always emphasized the need to test opinions against facts and the need to make absolutely sure that one did not start out with the conclusion and then look for the facts that would support

Second, disagreement alone can provide alternatives to a decision.

Without such an alternative, one is likely to flounder dismally when reality proves a decision to be inoperative.

Above all, disagreement is needed to stimulate the imagination.

In all matters of true uncertainty such as the executive deals with—

one needs “creative” solutions which create a new situation. And this means that one needs imagination—a new and different way of perceiving and understanding.

Disagreement, especially if forced to be reasoned, thought through, documented, is the most effective stimulus we know.

The effective decision-maker, therefore, organizes disagreement.

He starts out with the commitment to find out why people disagree.

it has to be assumed that he has reached his so obviously wrong conclusion because he sees a different reality and is concerned with a different problem.

“What does this fellow have to see if his position were, after all, tenable, rational, intelligent?”

What has to be true for this position to be accurate?

forces himself to see opposition as his means to think through the alternatives.

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.

Decision to act if only to avoid worst case scenario--and preserve optionality--and/or after first loss of opportunity

Nor does one interfere if the condition, while annoying, is of no importance and unlikely to make any difference anyhow.

The great majority of decisions will lie between these extremes.

In this situation the effective decision-maker compares effort and risk of action to risk of inaction.