Author: Peter Drucker
My recommendation: 5/5
Summary
A classic business book that everyone should read regardless of where they are in their career. This book is full time-tested approaches to being an effective leader.
My Takeaways
Up until recently, the problem of an organization was efficiency in the performance of a manual worker who did what he was told. Knowledge workers were not predominant in an organization.
Working on the right things is what makes knowledge work effective.
Knowledge work is defined by its results.
No matter what position you are in a knowledge work position, you must act as an executive within your sphere to achieve results for the organization.
Executives in corporations have to cooperate with the inevitable. These realities pressure executives towards non-results.
The flow of events determines what an executive is focused on unless he or she deliberately changes this.
Events don’t tell the executive anything unlike a patient visiting a doctor.
If executives lets the flow of events dictate what they do, then they will simply be “operating” and be wasting his knowledge.
Executives need criteria that enable them to work on what is truly important to get results, even though the criteria are not found in the flow of events.
Executives’ perceptions of the real world can be distorted and filtered through the lens of the organization they are within.
The higher up in the organization, the more inside focused the executive becomes.
The truly important events on the outside of an organization are not trends. They are changes in the trends.
Effective executives differ widely in abilities, what they do, personalities, knowledge and interests – all they have in common is the ability to get the right things done.
5 habits of the mind that have to be acquired by effective executives:
- Know where your time goes. Systematically manage time to bring under their control.
- Focus on outward contribution. Gear efforts towards results rather than work. Start out asking “what results are expected of me?” How can I contribute?
- Build on their own strengths and the strengths of coworkers. Build on the strengths of what they can do in a situation. Do not start out with building on weakness.
- Concentrate on a few major areas where performance will produce outstanding results. Set priorities and stick with them.
- Make effective decisions by designing a system of the right steps in the right sequence. Effective decision making is based on dissenting options and not consensus of facts. The right strategy vs razzle dazzle tactics.
Focus time in chunks to be more productive.
The larger the organization, the less actual time the executive will have. This means it’s more important for him/her to know where time goes and manage the little time he/she does have at their disposal.
The best way to manage your time is to record where it goes. We do this for manual labor type of work but not for knowledge work.
Effective executives systematically manage time by identifying and eliminating things that do not need to be done at all. These things are not tied to results.
Ask yourself which activities can be done by someone better?
Don’t be afraid to ask others if the executive is wasting their time.
Mitigate recurring “crises”.
Time spent in too many meetings is a sign of misorganization and should be re-examined.
Focusing efforts on downward is a subordinate no matter the title.
Focus on the contribution and hold yourself accountable for the performance as a whole.
Performance of an organization is direct results, building of values, reaffirmation and developing people for tomorrow.
Knowledge workers that are specialists should relate their narrow knowledge to the whole.
Effective human relations:
- Communication
- Teamwork
- Self development
- Development of others.
Focus on hiring based on strengths, not to minimize weakness.
Look for excellence in one major area and not for performance that gets by all around.
Effective executives are objective about filling jobs with people that meet the objective requirements.
Organizations need diversity to make better decisions.
Building teams of strength requires having a non/friend relationship.
Don’t be afraid to redesign job requirements
When designing a job, it should be big in scope for someone to grow into and evaluate performance.
Remove people quickly if they are not performing.
Staff a position based on strengths. Ask what this person can do instead of focusing on weaknesses. (General Marshall example.)
Help make the strengths of your superiors productive.
Build on strength to make weaknesses irrelevant.
Effective executives themselves should know what they are good at.
Don’t change human beings, but multiply the performance capacity by putting strength to use in people.
Executives concentrate the time they have on leveraging their strengths to focus on one thing at a time.
Effective execs do not race or rush important tasks. They put in the time necessary to complete each task effectively – for themselves and their organization.
Programs and processes in an organization often outlive their usefulness. It is important for the executive to constantly evaluate and remove yesterday’s programs that are no longer productive.
Move people into new positions within an organization that have a proven strength rather than hire a new person.
Execs bring in people just below the level off top leadership into an activity that is already defined and reasonably understood
Do not let the pressure dictate the important tasks an exec should concentrate on, because the pressure always favors yesterday. Do not favor urgent vs. relevant.
The reason why it’s hard to concentrate is because it’s hard to set “posteriorities” – what tasks not to tackle and sticking to that decision. (See similar takeaways from my book review on ‘Steve Jobs’)
How to identify priorities:
- Pick the future against the past.
- Focus on opportunity rather than on problem.
- Choose your own direction, rather than climb on the bandwagon.
- Aim high for something that will make a difference instead of something safe and easy to do.
- It is just as risky to do something small that is new, as it is to do something big that is new.
- Execs focus on making a few strategic decisions on the highest level, rather than simply solving problems.
Effective decision making criteria:
- Is the problem generic (can it be solved by applying a rule/principle) or specific (treated as a one-off)
- Think through the “boundary decisions” of what is right vs. what is acceptable and what the decision has to satisfy.
- Convert decisions into action with specific steps and identify people with the right behaviors and strengths to carry out and “operationalize” the new decision.
- Feedback has to be built into the decision to provide continue testing against actual events of the expectations that underlie the decision.
- Most people start out decisions with opinions – untested hypotheses and then find the fact to support their opinion.
- The effective executive asks “what do we have to know to test the validity of this hypothesis?”
- The effective decision maker assumes that the traditional measurements are not the right measurement. Otherwise there would generally be no need for a decision; a simple adjustment would be acceptable (yesterday’s decision) (Beginner’s mind)
- Effective executives insist on alternatives of measurement so they can choose the one appropriate one.
- Effective decision making comes from dissension and conflicting views. One does not make a decision unless there is disagreement. (Similar views as Ray Dalio in his book ‘Principals’)
- Think through the alternatives and have a backup plan. This stimulates imagination.
- The effective exec organizes disagreement, it gives him the alternatives to choose from
- Execs use conflict of opinion as a tool to make sure all major aspects of important matter are looked at carefully.
- One should evaluate if a decision even needs to be made at all.
- Everyone in an organization should be an effective decision maker.
Summary:
- An executive’s job is to be effective
- Effectiveness can be learned
- The needs of a large-scale organization have to be satisfied by common people achieving uncommon performance
- Organizations need to feed opportunities and starve problems.
- Organizations need to set priorities instead of trying to do a bit of everything