In this management classic, written by Peter Drucker, he argues the sole responsibility for the Executive is to be effective, where their effectiveness is defined by getting the right things done.
Drucker argues that as the economy transitions to be knowledge centred, so the challenge of the Executive to be effective is greater than ever before. If historically the workforce was primarily in primary or secondary industries (agriculture, mining, manufacturing etc) then the responsibilities of the typical worker were clearly defined and would not change often.
In contrast, as the workforce moves to the knowledge economy, so the worker of today has a set of responsibilities that are constantly changing as the expertise of the individual progress. Similarly, in the manufacturing economy, managing outputs can be achieved primarily through direct supervision, whereas in the knowledge economy that alone is not sufficient. Indeed, any worker in the knowledge economy should be trained to think as an effective executive to enable autonomous action and decision making.
With that, the purpose of this book is to outline the five steps the executive needs to take:
- Record where the time goes. Executives who don’t quantify how they spend their time and rely on memory alone will inevitably miscalculate. Drucker argues that this first step alone if implemented properly will result in immediate and substantial improvements through efficiency gains.
- Focus work on outward contribution. The executive needs to think through why they are on the payroll and what contribution they need to make that only they can do. Put another way, the person who focuses on downward authority (e.g. I run x department of y people) is subordinate in their thinking. Instead, the focus needs to be on contribution and what they are responsible for.
- Make strengths productive. Within a team, there will be different strengths each person brings with them. The effective executive should be able to recognise the strengths within his team and organise workflows to enable them to be successful in their area of expertise. Also, understand that over-familiarity can cloud judgement, so maintaining impartiality is critical, when asking the question, what can they do better than anyone else in the organisation. With that, avoid the trap of building jobs to suit personality.
- First things first, concentrate on one task at a time. Part of the reason people underperform is they under-estimate the time for anyone task as they expect everything will go right when in practice this is rarely true. Effective executives, therefore, allow a margin of time beyond what is needed. Secondly, an ineffectual executive will be beholden to arbitrary deadlines, which result in rushed work, which inevitably leads to being further behind. Effective executives focus on a steady pace that can be maintained. Finally, while they know they have to get many things done, and effectively, they concentrate on doing one thing at a time, and on prioritising first things first.
- Effective Decision making. Given that critical decision making is the exclusive purview of the executive, defining the elements therefore is a key first step, to effective decision making. An interesting insight offered in this segment is that if there is no disagreement in a meeting to discuss a new initiative or plan, then reschedule the meeting and invite participants to prepare objections for the rescheduled session.
In summary, this book is going to be most useful for people who are already running established businesses where they are looking to optimise their operational management to create compound growth. The book talks about how in the knowledge economy it is up to every person to think about how they work, equally logically it is down to the leadership to then create the culture so people can make these changes and with that, improve the performance of the company.