The Effective Executive

by Peter F. Drucker

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; both President Franklin Roosevelt and President Lyndon Johnson belong in this category, as apparently did Winston Churchill). People who are both readers and listeners—trial lawyers have to be both, as a rule—are exceptions. 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.

Garret Hardin: literate, numerate, ecolate. Refinement?: Readers/writers vs listeners/talkers. Two broad categories. But those who talk & carefully watch reactions are a unique variant. High social intelligence.

The assertion that “somebody else will not let me do anything” should always be suspected as a cover-up for inertia.

In every area of effectiveness within an organization, one feeds the opportunities and starves the problems. Nowhere is this more important than in respect to people. 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.

Have to get good at identifying the opportunities; that is, the natural experiments that present themselves according to circumstance. Shades of ccomplexity here.

If there is any one “secret” of effectiveness, it is concentration. Effective executives do first things first and they do one thing at a time. The need to concentrate is grounded both in the nature of the executive job and in the nature of man. Several reasons for this should already be apparent: There are always more important contributions to be made than there is time available to make them. Any analysis of executive contributions comes up with an embarrassing richness of important tasks; any analysis of executives’ time discloses an embarrassing scarcity of time available for the work that really contributes. No matter how well an executive manages his time, the greater part of it will still not be his own. Therefore, there is always a time deficit.

And therefore always time scarcity. It's baked in the cake. How do we effectively deal with it? Use it to our advantage?

The more an executive focuses on upward contribution, the more will he require fairly big continuous chunks of time. The more he switches from being busy to achieving results, the more will he shift to sustained efforts—efforts which require a fairly big quantum of time to bear fruit. Yet to get even that half-day or those two weeks of really productive time requires self-discipline and an iron determination to say “No.”

The penalties of task-switching, Makers' Schedule Manager's Schedule (essay), The Power of No (Altucher)

Mankind is indeed capable of doing an amazingly wide diversity of things; humanity is a “multipurpose tool.” But the way to apply productively mankind’s great range is to bring to bear a large number of individual capabilities on one task. It is concentration in which all faculties are focused on one achievement. We rightly consider keeping many balls in the air a circus stunt. Yet even the juggler does it only for ten minutes or so. If he were to try doing it longer, he would soon drop all the balls. People do, of course, differ. Some do their best work when doing two tasks in parallel at the same time, thus providing a change of pace. This presupposes however that they give each of the two tasks the minimum quantum needed to get anything done. But few people, I think, can perform with excellence three major tasks simultaneously.

Limit your WIP, dammit

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. The people who get nothing done often work a great deal harder. In the first place, they underestimate the time for any one task. They always expect that everything will go right. Yet, as every executive knows, nothing ever goes right. The unexpected always happens—the unexpected is indeed the only thing one can confidently expect. And almost never is it a pleasant surprise. Effective executives therefore allow a fair margin of time beyond what is actually needed. In the second place, the typical (that is, the more or less ineffectual) executive tries to hurry—and that only puts him further behind. Effective executives do not race. They set an easy pace but keep going steadily. Finally, the typical executive tries to do several things at once. Therefore, he never has the minimum time quantum for any of the tasks in his program. If any one of them runs into trouble, his entire program collapses. Effective executives know that they have to get many things done—and done effectively. Therefore, they concentrate—their own time and energy as well as that of their organization—on doing one thing at a time, and on doing first things first.

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?” And if it isn’t, he gets rid of it so as to be able to concentrate on the few tasks that, if done with excellence, will really make a difference in the results of his own job and in the performance of his organization. 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.

Putting all programs and activities regularly on trial for their lives and getting rid of those that cannot prove their productivity work wonders in stimulating creativity even in the most hidebound bureaucracy.

True enough, but you have to have a unified management *team* that's actually going to do this. It takes more than just one person- more like a culture \

Another predictable result of leaving control of priorities to the pressures is that the work of top management does not get done at all. That is always postponable work, for it does not try to solve yesterday’s crises but to make a different tomorrow. And the pressures always favor yesterday. In particular, a top group which lets itself be controlled by the pressures will slight the one job no one else can do. It will not pay attention to the outside of the organization. It will therefore lose touch with the only reality, the only area in which there are results. For the pressures always favor what goes on inside. They always favor what has happened over the future, the crisis over the opportunity, the immediate and visible over the real, and the urgent over the relevant.

Sounds a lot like tunneling to me, but now at a managerial or leadership level. Very good point on how tunneling leads to a distorted view of reality. Internal focus may be much more salient, but is not nearly as relevant as the external focus, where Drucker points out *reality* actually is; the only place where results matter.

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. Most executives have learned that what one postpones, one actually abandons. A good many of them suspect that there is nothing less desirable than to take up later a project one has postponed when it first came up. The timing is almost bound to be wrong, and timing is a most important element in the success of any effort. To do five years later what it would have been smart to do five years earlier is almost a sure recipe for frustration and failure.

Setting a posteriority is also unpleasant. Every posteriority is somebody else’s top priority. It is much easier to draw up a nice list of top priorities and then to hedge by trying to do “just a little bit” of everything else as well. This makes everybody happy. The only drawback is, of course, that nothing whatever gets done.

"Every posteriority is somebody else's top priority" : Keep in mind that person could be *you* sometime in the future. See second paragraph on the pressures of people-pleasing and how it zaps Esssentialism and thus effectiveness

Courage rather than analysis dictates the truly important rules for identifying priorities: Pick the future as against the past; Focus on opportunity rather than on problem; Choose your own direction—rather than climb on the bandwagon; and Aim high, aim for something that will make a difference, rather than for something that is “safe” and easy to do.

The effective executive does not, in other words, truly commit himself beyond the one task he concentrates on right now. Then he reviews the situation and picks the next one task that now comes first.

Pomodoro + personal kanban is a good way to make this happen. Pomodoro for focus on the actual thing you're doing right now; kanban for the next level up. This passage also describes a sort of slow motion OODA loop. Kanban helps with that by giving you a visual map of your options. WIP limits help enforce the one thing at a time principle by narrowing choices to begin with. WIP limit of 1 may be tempting, but that probably leads to a lot of down time in real life since some tasks have built-in waiting periods (ex. HPLC).

Only executives make decisions. Indeed, to be expected—by virtue of position or knowledge—to make decisions that have significant impact on the entire organization, its performance, and results defines the executive.

Keep in mind that even if you're an individual contributor, your decisions still affect others. No, maybe not the entire organization, but it will nevertheless impact others directly. The only difference between you and the CEO is that his decisions have a wider scope. The process is exactly the same.

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.

Tony Robbins said the same thing. It's not a decision unless you act (i.e. follow through). Also implied here is that although to make a decision doesn't take long, it's the most important part when it comes to time usage. A hastily made bad decision saves a little time, but the execution of that bad decision will waste a whole lot more. Keep in mind it will probably involve others as well, wasting their time too. This is a good case for making unhurried decisions. Don't be in such a rush to act.

the decision for which Sloan is best remembered, the decentralized organization structure of General Motors, is of the same kind as the major decisions Theodore Vail had made somewhat earlier for the Bell Telephone System.

Jocko: Decentralized command

Everyone before Sloan had seen the problem as one of personalities, to be solved through a struggle for power from which one man would emerge victorious. Sloan saw it as a constitutional problem to be solved through a new structure; decentralization which balances local autonomy in operations with central control of direction and policy.

Good description here: Upper management focuses on high-level priorities, themes, directions, etc. Lower management, under these constraints, then sets lower-level priorities, themes, directions etc. to workers. The workers in turn still have plenty of freedom to maneuver within these narrower constraints to get the job done in the manner they see best fit.

The acknowledged radical among American business leaders of those days was Henry Ford. But Vail’s and Sloan’s decisions were much too “wild” for Ford. He was certain that the Model T, once it had been designed, was the right car for all time to come. Vail’s insistence on organized self-obsolescence would have struck him as lunacy. He was equally convinced that only the tightest centralized control could produce efficiency and results. Sloan’s decentralization appeared to him self-destructive weakness.

Taylorism has its place: today, with robots and software.

THE ELEMENTS OF THE DECISION PROCESS The truly important features of the decisions Vail and Sloan made are neither their novelty nor their controversial nature. They are: 1. The clear realization that the problem was generic and could only be solved through a decision which established a rule, a principle; 2. The definition of the specifications which the answer to the problem had to satisfy, that is, of the “boundary conditions”; 3. The thinking through what is “right,” that is, the solution which will fully satisfy the specifications before attention is given to the compromises, adaptations, and concessions needed to make the decision acceptable; 4. The building into the decision of the action to carry it out; 5. The “feedback” which tests the validity and effectiveness of the decision against the actual course of events. These are the elements of the effective decision process.

Next there is the truly exceptional, the truly unique event. The power failure that plunged into darkness the whole of northeastern North America from the St. Lawrence to Washington in November 1965 was, according to the first explanations, a truly exceptional situation. So was the thalidomide tragedy which led to the birth of so many deformed babies in the early sixties. The probability of these events, we were told, was one in ten million or one in a hundred million. Such concatenation of malfunctions is as unlikely ever to recur again as it is unlikely, for instance, for the chair on which I sit to disintegrate into its constituent atoms. Truly unique events are rare, however. Whenever one appears, one has to ask: Is this a true exception or only the first manifestation of a new genus?

Taleb et al. Completely wrong view of risk-modelling and the ccomplexity involved.

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. This was clearly shown, I think, by the failure of most of the policies, whether domestic or foreign, of the Kennedy administration. For all the brilliance of its members, the administration achieved fundamentally only one success, in the Cuban missile crisis. Otherwise, it achieved practically nothing. The main reason was surely what its members called “pragmatism”; that is, its refusal to develop rules and principles, and its insistence on treating everything “on its merits.” Yet it was clear to everyone, including the members of the administration, that the basic assumptions on which its policies rested, the basic assumptions of the postwar years, had become increasingly unrealistic in international as well as in domestic affairs.

Where we engineered to make cars safe when used right, we also have to engineer to make cars safe when used wrong. This, however, the automobile industry failed to see.

Make cars idiot-proof and drunk-proof. Once again, education is not the most effective answer. The real problem was the Pareto distribution of those who cause accidents. 5% of drivers (clumsy, drunk, etc.) will never be helped by big flashy education and training programs, yet they cause 75% of accidents. Only engineering controls will be effective.

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. And if the event is truly unique, the experienced decision-maker suspects that this heralds a new underlying problem and that what appears as unique will turn out to have been simply the first manifestation of a new generic situation.

Everyone can make the wrong decision—in fact, everyone will sometimes make a wrong decision. But no one needs to make a decision which, on its face, falls short of satisfying the boundary conditions.

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.

Similar to Alcoa CEO decision to make safety the new metric of success, rather than profitability. Vail and the other guy both knew that profit is the result of customer satisfaction. In Vail's case, external customers; in Alcoa's case, internal customers (i.e. employees).

They learned long ago that to go oneself and look is the only reliable feedback.

Gemba

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. At the least he sends one of his own aides—he never relies on what he is told by the subordinate to whom the order was given. Not that he distrusts the subordinate; he has learned from experience to distrust communications.

Failure to go out and look is the typical reason for persisting in a course of action long after it has ceased to be appropriate or even rational.

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.

requisite variety

To get the facts first is impossible. There are no facts unless one has a criterion of relevance. Events by themselves are not facts.

"Fact" here seems to be defined as the *relationship* between pieces of information. Iow, the beginnings of complexity. "Fact" here could be construed as the building block of ccomplexity

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.

Same idea as Snowden ccomplexity exploration: Multiple parallel safe-to-fail experiments that either get amplified or quashed based on some pre-defined indicator of early success or lack thereof. Taking the falsification approach of his fellow Austrian Karl Popper: you can have all the hypotheses you want--and they'll all be emotionally driven to one extent or another. What's important is that they be testable and falsifyable.

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.

Unless one has considered alternatives, one has a closed mind. This, above all, explains why effective decision-makers deliberately disregard the second major command of the textbooks on decision-making and create dissension and disagreement, rather than consensus. 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.

Create requisite variety if it doesn't already exist. Cf this with typical American aversion to direct confrontation. Cf also with Japanese method of gaining requisite variety without head-on direct conflict and disagreement. How do they do it? How to the Japanese get requisite variety given their general aversion to direct disagreement?

This practice was severely criticized as execrable administration by the one “professional manager” in Roosevelt’s Cabinet, his secretary of the Interior, Harold Ickes, whose diaries are full of diatribes against the President’s “sloppiness,” “indiscretions,” and “treachery.” But Roosevelt knew that the main task of an American President is not administration. It is the making of policy, the making of the right decisions. And these are made best on the basis of “adversary proceedings” to use the term of the lawyers for their method of getting at the true facts in a dispute, and of making sure that all relevant aspects of a case are presented to the court.

See Gary Spence books on "How to Argue and Win Every Time" etc.

Effective executives know, of course, that there are fools around and that there are mischief-makers. But they do not assume that the man who disagrees with what they themselves see as clear and obvious is, therefore, either a fool or a knave. They know that unless proven otherwise, the dissenter has to be assumed to be reasonably intelligent and reasonably fair-minded. Therefore, 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. The effective executive, therefore, always asks: “What does this fellow have to see if his position were, after all, tenable, rational, intelligent?” The effective executive is concerned first with understanding. Only then does he even think about who is right and who is wrong. *

Most people start out with the certainty that what they see is the only way to see at all.

Compounded with Kahneman: WYSIATI (What You See Is All There Is). Double whammy! Further compounded with confirmation bias Munger: Lollapalooza Effect Waaaay too much talking; not enough listening

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.

First do no harm. Iatrogenics, precautionary principle, etc. (NN Taleb) Barbell principle, Cynefin (multiple parallel safe-to-fail experiments)

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.

Never Split the Difference (Chris Voss) Don't wear one brown shoe and one black shoe

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 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.

Similar process to letting a book "age" before writing up notes on it.

Executives are not paid for doing things they like to do. They are paid for getting the right things done—most of all in their specific task, the making of effective decisions.

It can no longer be improvised. It can no longer be groped for in a series of small adaptations, each specific, each approximate, each, to use the physicist’s terminology, a “virtual” rather than a real decision. It has to be a decision in principle. The computer is not the cause of this. The computer, being a tool, is probably not the cause of anything. It only brings out in sharp relief what has been happening all along. For this shift from the small adaptation to the decision in principle has been going on for a long time. It became particularly apparent during World War II and after, in the military. Precisely because military operations became so large and interdependent, requiring, for instance, logistics systems embracing whole theaters of operations and all branches of the armed services, middle-level commanders increasingly had to know the framework of strategic decisions within which they were operating. They increasingly had to make real decisions, rather than adapt their orders to local events. The second-level generals who emerged as the great men of World War II—a Rommel, a Bradley, a Zhukov—were all “middle managers” who thought through genuine decisions, rather than the dashing cavalry generals, the “beaux sabreurs” of earlier wars.

ccomplexity reaching down ever further. Now no longer something only those at the very top need to understand and handle. Nearly every executive now faces ccomplexity on a daily basis, and had better be familiar with what it is and how to go about navigating things.