The Effective Executive by Peter Drucker: Summary and Lessons

“Working on the right things is what makes knowledge work effective.”

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Related: Free to Focus, The 4-Hour Workweek, Eat That Frog

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The Effective Executive Short Summary

The Effective Executive by Peter Drucker is the ultimate book on how to be effective. It rests on two premises: the executive’s job is to be effective, and effectiveness can be learned through 5 habits. A must-read book to learn how to work on the right things as well as working right.

Executive Summary

Effective executives follow the same 8 practices:

1. Ask “What needs to be done?”
2. Ask “What is right for the enterprise?”
3. Develop action plans
4. Take responsibility for decisions
5. Take responsibility for communicating
6. Focus on opportunities rather than problems
7. Run productive meetings
8. Think and say “we” rather than “I”

The 5 habits of an effective executive:

1. Know Thy Time
2. Focus on Contribution
3. Make Strengths Productive
4. First Things First
5. Effective Decisions

Chapter 1: Effectiveness Can Be Learned

Intelligence, imagination, and knowledge are essential resources, but only effectiveness converts them into results. By themselves, they only set limits to what can be attained.

Working on the right things is what makes knowledge work effective.

Every knowledge worker is an “executive” if responsible for a contribution that materially affects the capacity of the organization to perform and to obtain results. It does not depend on whether he manages people or not.

Knowledge work is defined by results, not quantity or costs.

If one cannot increase the supply of a resource, one must increase its yield. And effectiveness is the one tool to make the resources of ability and knowledge yield more and better results.

Effectiveness is a habit, a complex of practices. And practices can always be learned.

The 5 habits of an effective executive:

1. Know Thy Time. Effective executives know where their time goes and work systematically at managing it
2. What Can I Contribute? Effective executives focus on outward contribution
3. Making Strengths Productive. Effective executives build on strengths—their own, their superiors, colleagues, and subordinates; and on the strengths in the situation, that is, on what they can do
4. First Things First. Effective executives concentrate on the few major areas where superior performance will produce outstanding results
5. Effective Decisions. They know that this is a matter of system, the right steps in the right sequence

Chapter 2: Know Thy Time

Effective executives know that time is the limiting factor.

To be effective, every knowledge worker needs to be able to dispose of time in fairly large chunks. To have small dribs and drabs of time at his disposal will not be sufficient even if the total is an impressive number of hours.

The 3-step process to manage time:

1. Record. Find out where your time actually goes
2. Manage. Cut back unproductive demands on your time
3. Consolidate. “Discretionary” time into the largest possible continuing units

Record

The first step toward executive effectiveness is therefore to record actual time-use. You can do this using a time log.

The record should be made in “real” time, at the time of the event itself, rather than later on from memory.

Use your log to rethink and rework your schedule. 

Manage

Systematic time management allows you to find the nonproductive activities you need to get rid of.

How to get rid of time-wasters:

• Eliminate. Asks of all activities in the time records: “What would happen if this were not done at all?” If nothing would happen, then obviously the conclusion is to stop doing it
• Delegate. Ask: “Which of the activities on my time log could be done by somebody else just as well, if not better?” The only way he can get to the important things is by pushing on others anything that can be done by them at all
• Control. A common cause of time-waste is largely under the executive’s control and can be eliminated by him. That is the time of others he himself wastes

Effective executives ask systematically: “What do I do that wastes your time without contributing to your effectiveness?”

Time-loss that results from poor management and deficient organization:

1. Lack of system or foresight. The symptom to look for is the recurrent “crisis”. A crisis that recurs a second time is a crisis that must not occur again.
2. Overstaffing. When the workforce is too big for effectiveness, it increases the amount of its time “interacting” rather than working.
3. Malorganization. Its symptom is an excess of meetings. When everybody meets all the time no one gets anything done.
4. Malfunction in information

Consolidate

The final step in time management is to consolidate the time that record and analysis show as normally available and under the executive’s control.

How to consolidate your discretionary time:

• Work at home one day a week
• Schedule all the operating work for two days a week and set aside the mornings of the remaining days for work on major issues
• Schedule a daily work period at home in the morning.

Effective executives start out by estimating how much discretionary time they can realistically call their own. Then they set aside continuous time in the appropriate amount. And if they find later that other matters encroach on this reserve, they scrutinize their record again and get rid of some more time demands from less than fully productive activities.

And all effective executives control their time management perpetually. They not only keep a continuing log and analyze it periodically. They set themselves deadlines for the important activities, based on their judgment of their discretionary time.

Chapter 3: What Can I Contribute?

Every organization needs performance in 3 major areas:

• Direct results
• The building of values and their reaffirmation
• Building and developing people for tomorrow

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?”

How to have an Effective Meeting:

• Know what to expect to get out of a meeting and what the purpose of the occasion is or should be
• State at the outset of a meeting the specific purpose and contribution it is to achieve
• At the end of the meeting, always go back to the opening statement and relate the final conclusions to the original intent

Chapter 4: Making Strength Productive

The Effective Executive knows that one cannot build on weakness.

To achieve results, one has to use all the available strengths—the strengths of associates, the strengths of the superior, and one’s own strengths.

Staffing from Strength

Fill positions and promote on the basis of what a man can do. Do not make staffing decisions to minimize weaknesses but to maximize strength.

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

The 4 rules to staff for strength:

1. Any job that has defeated two or three men in succession, even though each had performed well in his previous assignments, must be redesigned
2. Make each job demanding and big
3. Start with what a man can do rather than with what a job requires
4. To get strength, one has to put up with weaknesses

Staffing the opportunities instead of the problems not only creates the most effective organization, it also creates enthusiasm and dedication.

Conversely, it is the duty of the executive to remove ruthlessly anyone—and especially any manager—who consistently fails to perform with high distinction. To let such a man stay on corrupts the others.

How Do I Manage My Boss?

How to make the strengths of the boss productive:

• “What can my boss do really well?”
• “What has he done really well?”
• “What does he need to know to use his strength?”
• “What does he need to get from me to perform?”

To make the boss effective is therefore usually fairly easy. But it requires focusing on his strengths and on what he can do. It requires building on strength to make weaknesses irrelevant. Few things make an executive as effective as building on the strengths of his superior.

Making Yourself Effective

Effective executives lead from strength in their own work. They make productive what they can do.

All in all, the effective executive tries to be himself; he does not pretend to be someone else. He looks at his own performance and at his own results and tries to discern a pattern.

“What are the things that I seem to be able to do with relative ease, while they come rather hard to other people?”

To be effective, the executive builds on what he knows he can do and does it the way he has found out he works best.

Chapter 5: First Things First

If there is anyone “secret” of effectiveness, it is concentration. Effective executives do first things first and they do one thing at a time.

Sloughing Off Yesterday

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.

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. 

Systematic sloughing off of the old is the one and only way to force the new.

Priorities and Posteriorities

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 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.

If the pressures rather than the executive are allowed to make the decision, the important tasks will predictably be sacrificed.

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.

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 the problem
• Choose your own direction—rather than climb on the bandwagon
• Aim high, aim for something that will make a difference, rather than for something that is “safe” and easy to do

Chapter 6: The Elements of Decision-Making

Effective executives do not make a great many decisions. They concentrate on the important ones.

They try to make the few important decisions on the highest level of conceptual understanding. 

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.

The 5 Elements of the Decision Process:

1. Ask if it’s a generic situation or an exception
2. Clear “boundary conditions” as to what the decision has to accomplish
3. Start with what is right rather than what is acceptable
4. Convert the decision into action
5. Build feedback into the decision

Chapter 7: Effective Decisions

A decision is a choice between alternatives. It is rarely a choice between right and wrong.

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

People inevitably start out with an opinion; to ask them to search for the facts first is even undesirable. They will simply 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 effective executive encourages opinions. He then asks: “What do we have to know to test the validity of this hypothesis?” The people who voice an opinion also need to take responsibility for fact-finding.

“What is the criterion of relevance?” This turns on the measurement appropriate to the matter under discussion and to the decision to be reached.

The best way to find the appropriate measurement is again to go out and look for the “feedback” —only this is “feedback” before the decision.

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

The executive who wants to make the right decision forces himself to see opposition as his means to think through the alternatives.

The final question the effective decision-maker asks: “Is a decision really necessary?” There’s always the alternative of doing nothing.

If the answer to “What will happen if we do nothing?” is “It will take care of itself,” one does not interfere.