November 8, 2014

The Effective Executive

The Definitive Guide to Getting the Right
Things Done
Peter F. Drucker
©2006 by Peter F. Drucker
Adapted by permission of HarperCollins Publishers, Inc.
ISBN: 978-0-06-083345-9

Key Concepts
Executives can become more effective by focusing on five essential areas:

1. Time Management: The most effective executives are very clear and concise about where their time each day
goes. They record their activities in real time, not by memory, and quickly locate areas where improvement
is needed and then make the necessary changes.
2. Contributions: Effective executives focus intently on their contributions to their organizations. They do not
focus on their efforts, but rather their results.
3. Strength: Effective executives understand that weaknesses are inevitable in everyone, but they also know
that everyone has strengths as well. When building an organization, executives must focus on finding the
strengths in their staff and capitalizing on those strengths.
4. Concentration: Effective executives know that they need to put first things first. They must prioritize and
then concentrate on one thing at a time. Juggling too many things at once results in mediocre organiza-
tions.
5. Decision Making: Effective executives understand that decisions must be made with significant validity test-
ing, disagreement, and action planning.

Introduction
In The Effective Executive, Peter F. Drucker identifies the five practices that are essential to business effec-
tiveness. With examples from companies, government agencies, and the military, Drucker shows how effective
executives at all levels of an organization have the power to get things done and get them done right. Effective-

Business Book Summaries® • November 8, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 1
The Effective Executive Peter F. Drucker

ness is something that is separate from intelligence or an ability to work hard; it consists of some practices that
anyone can learn with some determination and practice.

Effectiveness Can Be Learned

Executives are expected to get things done and be effective, but many executive positions are filled by people
of high intelligence and creativity who may or may not actually be effective in their daily work. Without effec-
tiveness, intelligence, imagination, and knowledge, executives will not achieve desired results.

Very little attention is actually paid to effectiveness when it comes to executives. In manual labor jobs, efficiency
can be measured by output, and in days past, the manual worker predominated most organizations, which
made measuring an executive’s (or knowledge worker’s) effectiveness somewhat pointless. Any problems in
efficiency could generally be traced back to the manual worker, whether in a factory, in the military, or even in
the government. Knowledge workers, for the most part, were self-employed professionals who had maybe one
clerk or helper.

Today’s organization is different. The knowledge worker is now the center of most organizations. Measuring the
effectiveness of these workers is necessary but more difficult. Thinking is what the knowledge worker does. The
product created is not physical, but rather an idea that another knowledge worker must convert or execute on.

All knowledge workers are “executives” if they are responsible for a contribution that helps the organization get
results. It may seem that all managers are knowledge workers and all non-managers are not. However, this is not
always the case. Some managers are “overseers” who merely manage the work of others but do not contribute
to the direction of the company. Some non-managers, on the other hand, do have responsibilities that fall under
the knowledge worker category. Knowledge work is not defined by quantity or costs, but only by results. All
decision makers do the same kind of work as the company president, just with a more limited scope.

Executive have four realities that they cannot control and that can drive them
towards ineffectiveness: A systematic deci-
1. Their time belongs to everyone else. sion review can be
a powerful tool for
2. They are forced to keep on operating unless they take positive action to
se l f- d eve lo p m e nt .
change the reality in which they live and work.
Checking the results
3. They work within organizations where people must make use of what the of a decision against
executives contribute or their jobs are meaningless.
its expectations shows
4. They are within organizations, whereby they only see what is happening executives what their
inside the organization and have a distorted view of the outside. strengths are, where
If effectiveness were something people were born with, the present civiliza- they need to improve,
tion would be very vulnerable, and modern organizations would cease to and where they lack
exist. Effective executives do not come in one shape or size or have one set knowledge or infor-
of personality traits. Some rely on logic and analysis, while others rely on per- mation.
ception and intuition. What all executives have in common are the practices
that make them effective, and those practices are the same regardless of industry.

Executives need to acquire five habits of the mind in order to be effective:

1. Know where their time goes.

2. Focus on outward contribution.

Business Book Summaries® • November 8, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 2
The Effective Executive Peter F. Drucker

3. Build on their own strengths and the strengths of their superiors, colleagues, and subordinates.

4. Concentrate on the few major areas where superior performance will produce outstanding results.

5. Make effective decisions.

Know Thy Time

Plans rarely work when it comes to an executive’s time. Effective executives do not start out with planning but
instead start by figuring out where their time goes. They record it, then they manage it, and then they consoli-
date it.

Time wasters are everywhere. The higher up in the organization an executive is, the more demands the organi-
zation will place on him or her. Even non-managers are bombarded with demands on their time that add little
to their productivity but cannot be ignored.

To be effective, executives need to be able to dispose of time in large chunks. Spending a little time here and a
little time there is not an efficient way to get things done. To have an impact when dealing with people, execu-
tives cannot expect to accomplish anything in a 15-minute meeting. More time is essential.

Effective executives
know that they have
ultimate responsi-
bility, which can be
neither shared nor
delegated. But they
have authority only
because they have
the trust of the orga-
nization. This means
that they think of the
needs and the oppor-
tunities of the orga-
nization before they
think of their own
needs and opportuni-
ties.
The first step toward executive effectiveness is to record how their time is
actually used. The method is not important. Executives can do it themselves
or have assistants do it for them. It just needs to be done in real time and not
depend on memory.
The next step is time management. Once time use is recorded, executives can
find the nonproductive activities and get rid of them. They must identify the
tasks that need not be done at all, which can be delegated to others, and what
tasks waste other people’s time.
When deciding what tasks to prune, executives should first identify the time
wasters that follow from lack of system or foresight. Anytime there is a recur-
ring crisis, this is a sign that something is not working right. Executives should
also note any overstaffing. If management spends more than ten percent
of its time on human relations issues, it is a sign that the staff is too large.
The third thing executives should note is the number of meetings. Too many
meetings is a sign of an inefficient organization. The last thing to look for is a
malfunction in information.
All effective executives control their time constantly. They keep ongoing logs
and perform regular analysis. They also set deadlines for important activities
based on their judgment and their discretionary time.

What Can I Contribute?

Effective executives want to know what they can contribute that will improve their institutions’ results. They are
not focused on their downward authority or what others owe them. By focusing on contribution, executives
turn their attention away from their own specialties and departments and focus instead on the performance of
the whole. Executives who do this will think in terms of the customer.

Contribution can mean different things. Every organization needs performance in three areas: direct results,
value building, and people development. While direct results always come first, all organizations need a com-
Business Book Summaries® • November 8, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 3
The Effective Executive Peter F. Drucker

mitment to values and something they stand for. It also must perpetuate itself by steadily upgrading its human
resources. Otherwise, the organization will not survive into the future.

An unwillingness to change is one of the most detrimental traits an executive can have. Organizations evolve
and change, and what has been successful in the past will not always be successful. Executives must understand
this.

Specialists alone cannot produce results. Their efforts must be combined with other specialists to deliver an
effective output. Effective executives understand that specialists must be concerned about the usability of their
products or knowledge. They continually ask their colleagues what it is they can contribute in order for them to
be able to make a difference.

Executives who have good relationships focus on their own work and on their interactions with others. The
desire to contribute by itself supplies the four basic requirements of effective relationships: communication,
teamwork, self-development, and development of others.

Effective executives always know the purpose of any meetings they are in. All meetings serve the contributions
to which executives have committed themselves. Focusing on contribution makes all meetings and events rel-
evant. It also results in stronger teams and forces executives to pay attention to outside results.

Making Strength Productive

Maximizing strengths is essential in creating an effective organization. The first
step in building strength is staffing. Staffing practices should focus on build- To ask, “What can
ing strengths, not mitigating weaknesses. Staffing to avoid weakness will only
I contribute?” is to
result in mediocrity. Strong people have strong weaknesses. There is no such
thing as a well-rounded person who has no weaknesses.
look for the unused
potential in the job.
No executive has ever suffered because his or her subordinates were strong And what is consid-
and effective. Executives know that subordinates are paid to perform and not
to please their superiors. It does not matter if they are pleasant to be around or
ered excellent per-
have friendly personalities as long as they do their jobs well. formance in a good
many positions is
While people with many interests do exist, there are very few people who
often but a pale
have outstanding accomplishments in multiple areas. Executives must look for
individuals’ strengths and work at making those strengths productive within shadow of the job’s
their organizations. Jobs should not be structured to fit personalities. Every full potential of con-
change in the definition of a job sets off a chain reaction through the entire tribution.
organization. A change to one job can affect everyone’s work, and this is highly
inefficient. Jobs should be impersonal and task-based.

Effective executives staff for strength by following four rules:

1. Jobs are created by humans and may be flawed and need to be redesigned.

2. All jobs should be demanding and challenging.

3. People should be evaluated and appraised long before the time comes when they need to decide on the
right person to fill a bigger position.

4. To get strength, one has to put up with weaknesses.

Business Book Summaries® • November 8, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 4
The Effective Executive Peter F. Drucker

While most executives are conscious of their limitations and also of what they are not allowed to do, they do not
concern themselves with this. Instead, they find ways to get things done no matter the obstacles.

First Things First

Concentration is one of the most important parts of effectiveness. While some people may be able to do two
tasks at a time, very few people can do more than that with excellence. Executives have so many tasks to take
care of that concentration is essential.

People inevitably
start out with an
opinion; to ask them
to search for the facts
first is even undesir-
able. They will simply
do what everyone is
far too prone to do
anyhow: look for
the facts that fit the
conclusion they have
already reached.
The secret to doing many things well is to do one thing at a time. In the end,
executives who do this use less time than people who try to divide their time
between tasks. Effective executives concentrate their own time and energy, as
well as their organization’s time and energy, to doing one thing at a time and
doing first things first.
The first thing executives must do is cease all programs that are no longer pro-
ductive. Executives are constantly bailing out the past, yet their focus must also
be on committing today’s resources to the future. While failures are easy to
eliminate, yesterday’s successes are harder to let go. However, they must be or
they will drain the lifeblood of the organization. When starting up a new task,
it is tempting to hire new people. Effective executives know that new people
should only be hired to expand on already established and smoothly running
activities. Tried and true employees should be given the task of taking on new
projects. To free up the veterans, it is essential to slough off any old projects
that are no longer benefitting the company or contributing to the company’s
growth.

Concentration is difficult for executives because of the inability to decide what tasks not to tackle. Most execu-
tives know that postponing a project often means abandoning it. This makes executives reluctant to shelf a
project. The fear is that these posteriorities (tasks that are not tackled) may become someone else’s top priority
and even a competitor’s triumph. Courage, not analysis, dictates the four rules for identifying priorities:

1. Pick the future, not the past.

2. Focus on opportunities, not problems.

3. Choose the direction instead of following others.

4. Aim high for something that will make a difference instead of going the safe route.

The Elements of Decision Making

Effective executives have a systematic process for making decisions. They focus on important decisions and
try to be strategic rather than trying to solve problems. They understand when a decision has to be based on
principle and when it should be made on the merits of the case. While decision making is complex, the action
to carry it out should be as simple as possible.

The features of the decision-making process that permeated the decisions of great executives such as Theodore
Vail of the Bell Telephone System and Alfred P. Sloan, Jr. of General Motors were:

1. They realized the problems were generic and needed a rule or principle established.

Business Book Summaries® • November 8, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 5
The Effective Executive Peter F. Drucker

2. They understood the conditions that the answer to the problem had to satisfy.

3. They completely thought through the best decisions before making any compromises or adaptations that
would make these decisions more acceptable.

4. They built the action needed to carry out the decision into the decision itself.

5. They solicited feedback to test the validity and effectiveness of the decisions against the actual events.

Decisions are never entirely right or entirely wrong. Effective executives make Executives, whether
decisions by starting with analyzing opinions, not facts. Getting facts first is
they like it or not,
an impossible task, so the effective executive encourages opinions but also
expects people to test the validity of those opinions. A more important ques- are forever bailing
tion becomes, “What is the criterion for relevance?” The answer to this question out the past. This is
helps determine the measurement needed for the matter under discussion. inevitable. Today is
Traditional measurements may not be the right measurements for today’s
always the result of
problems. If they were, then a decision would not likely be necessary; a simple actions and decisions
adjustment would suffice. To find the appropriate measurement, it is essential taken yesterday.
to look at the feedback that is attained before the decision. Finding the appro- Man, however, what-
priate measurement is a risk-taking judgment rather than a guaranteed one. ever his title or rank,
One of the first rules in decision making is not to make a decision unless there cannot foresee the
is a disagreement. A clash of conflicting views makes the decision-making pro- future. Yesterday’s
cess more thorough. Disagreement is the only safeguard against the decision actions and deci-
maker becoming a prisoner of the organization. Disagreement alone can pro- sions, no matter how
vide alternatives to the decision. Disagreement is also needed to stimulate the
imagination and develop new and different ways of understanding the issues.
courageous or wise
they may have been,
Effective executives never start out by assuming that one proposed deci- inevitably become
sion is right and one is wrong. They are committed to finding out why people
today’s problems,
disagree. They do not assume that those who disagree are fools, but instead
assume that those who disagree must see a different reality or are concerned crises, and stupidi-
with a different problem. ties.
The final question that decision makers must ask is whether or not a decision is even necessary. Doing nothing
is always an alternative solution. Only when a condition is likely to degenerate if nothing is done does a decision
prove necessary. Overall, it is important for executives to weigh all risks and determine if the benefits are worth
the effort.

Once the legwork is done, the specifications have been thought through, the alternatives explored, and the
risks and gains weighed, the decision almost makes itself. This is also where the unpleasantness of the decision
is fully known, making it clear that the decision is not going to make people happy. Courage in decision making
is an essential component, but executives must not rush into anything. While most fears are unfounded, it is
important to give some time and thought to the decision before implementing it just in case there truly was a
blunder somewhere in the process.

As new tools such as computer technologies enter and expand inside organizations, it is easy to assume that
decision making will become less relevant. However, these technologies are merely tools with narrow limita-
tions. Technology is logical, but humans are perceptual and can adapt. Decisions have to be anticipated, thought
through, and based on principle. As such, knowledge workers at all levels of the organization must be decision

Business Book Summaries® • November 8, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 6
The Effective Executive Peter F. Drucker
makers. The ability to make effective decisions increasingly determines the ability of every knowledge worker
to be effective together.

Features of the Book

Estimated Reading Time: 4–5 hours, 178 pages

The Effective Executive is a powerful tool for anyone in a knowledge-management role within an organization.
With plenty of real world examples to illustrate his points, Peter F. Drucker shows what it takes to be the type of
person that can get things done and get them done right.

Drucker makes it clear that the tactics in the book can be used by anyone at any level of an organization who is
responsible for developing solutions and creating new ideas, whether at the senior level or not. Senior execu-
tives can definitely benefit from this information as well, as their responsibilities are multiplied many times over.
The book lays out five steps toward more effective leadership and should be read in the order it is written. The
book contains an index for easy reference.

Contents
Preface

Introduction: What Makes an Effective Executive?

1. Effectiveness Can Be Learned

2. Know Thy Time

3. What Can I Contribute?

4. Making Strength Productive

5. First Things First

6. The Elements of Decision-making

7. Effective Decisions

Conclusion: Effectiveness Must Be Learned

Index

Further Information
Information about the author and subject:
www.druckerinstitute.com
Information about this book and other business titles:
www.harpercollins.com

Click Here to Purchase the Book

Business Book Summaries® • November 8, 2014 • Copyright © 2014 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 7
The Effective Executive Peter F. Drucker

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About the Author

Peter F. Drucker (1909-2005) is widely considered the seminal writer on and father of modern management
theory. A writer, teacher, and strategy consultant for business and social sector organizations, Drucker’s career
spanned nearly seventy-five years. As a writer, his groundbreaking work turned modern management theory
into a respected discipline. He is best known for his work on decentralization, privatization, empowerment, and
understanding the “knowledge worker.” He authored thirty-one books and was an editorial columnist for The
Wall Street Journal. As a consultant, he worked extensively with some of the world’s largest businesses and non-
profits including General Electric, Coca-Cola, Citicorp, Intel, the Salvation Army, the Girl Scouts of the USA, and
the American Red Cross. Drucker taught at the Graduate Business School of New York University for over twenty
years and went on to develop the country’s first executive MBA program for working professionals at Claremont
Graduate University. Its management school was later named the Peter F. Drucker Graduate School of Manage-
ment in his honor. He was the recipient of honorary doctorates from universities worldwide and awarded the
Presidential Medal of Freedom in 2002.

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