The Effective Executive by Drucker

See also notes-books-effectiveExecutiveDetails.


Effectiveness is not inborn, it is learned. It consists of practices (habits).

" In forty-five years of work as a consultant... I have not come across a single "natural"... All the effective ones have had to practice.. But all the ones who worked on making themselves effective executives succeeded in doing so."

" Effectiveness... is a habit; that is, a complex of practices. And practices can always be learned. Practices are simple, deceptively so; even a seven-year-old has no difficulty in understanding a practice. But practices are always exceedingly hard to do well. They have to be acquired, as we all learn the multiplication table; that is, repeated ad nauseam until “6 x 6 = 36” has become unthinking, conditioned reflex, and firmly ingrained habit. Practices one learns by practicing and practicing and practicing again. "


"An effective executive does NOT need to be a leader in the sense that the term is now most commonly used."

8 practices:

The first two practices gave them the knowledge they needed. The next four helped them convert this knowledge into effective action. The last two ensured that the whole organization felt responsible and accountable."

" final, bonus practice. This one’s so important that I’ll elevate it to the level of a rule: "Listen first, speak last.”"

What needs to be done?

"Note that the question is not 'What do I want to do?'"

"...Concentrate on one task if at all possible." If you are in the "sizable minority—who work best with a change of pace in their working day, [then] pick two tasks. I have never encountered an executive who remains effective while tackling more than two tasks at a time."

"..after completing the original top-priority task, ... [reset] priorities rather than moving on to number two from the original list.

"asked [your]self which of the two or three tasks at the top of the list [you yourself are] best suited to undertake. [concentrate] on that task" and delegate the others.

What is right for the enterprise?

" not ask if it’s right for the owners, the stock price, the employees, or the executives...a decision that isn’t right for the enterprise will ultimately not be right for any of the stakeholders."

action plans

"Executives are doers; they execute"

"...think about desired results, probable restraints, future revisions, check-in points, and implications for how [you’ll] spend [your] time. "

“What contributions should the enterprise expect from me over the next 18 months to two years? What results will I commit to? With what deadlines?” Then [consider] the restraints on action: “Is this course of action ethical? Is it acceptable within the organization? Is it legal? Is it compatible with the mission, values, and policies of the organization?”

"The action plan is a statement of intentions rather than a commitment. It must not become a straitjacket. It should be revised often, because every success creates new opportunities. So does every failure"

"the action plan needs to create a system for checking the results against the expectations. Effective executives usually build two such checks into their action plans. The first check comes halfway through the plan’s time period; for example, at nine months. The second occurs at the end, before the next action plan is drawn up.

Finally, the action plan has to become the basis for the executive’s time management. Time is an executive’s scarcest and most precious resource. And organizations—whether government agencies, businesses, or nonprofits—are inherently time wasters. The action plan will prove useless unless it’s allowed to determine how the executive spends his or her time. Napoleon allegedly said that no successful battle ever followed its plan. Yet Napoleon also planned every one of his battles, far more meticulously than any earlier general had done. "

take responsibility for decisions

" A decision has not been made until people know:


" It’s just as important to review decisions periodically—at a time that’s been agreed on in advance... That way, a poor decision can be corrected before it does real damage. These reviews can cover anything from the results to the assumptions underlying the decision. "

" A systematic decision review can be a powerful tool for self-development, too.... "

"In areas [in which executives are simply incompetent], smart executives don’t make decisions or take actions. They delegate."

" Such a review is especially important for the most crucial and most difficult of all decisions, the ones about hiring or promoting people. Studies of decisions about people show that only one-third of such choices turn out to be truly successful. One-third are likely to be draws—neither successes nor outright failures. And one-third are failures, pure and simple. Effective executives know this and check up (six to nine months later) on the results of their people decisions. If they find that a decision has not had the desired results, they don’t conclude that the person has not performed. They conclude, instead, that they themselves made a mistake. "

Remove nonperforming individuals in important jobs, whether or not it is their fault. You owe this to their coworkers.

" People who have failed in a new job should be given the choice to go back to a job at their former level and salary. This option is rarely exercised; such people, as a rule, leave voluntarily, at least when their employers are U.S. firms. But the very existence of the option can have a powerful effect, encouraging people to leave safe, comfortable jobs and take risky new assignments. "

" Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake. Decisions are made at every level of the organization... " "

take responsibility for communicating

"...share their plans with and ask for comments from all [your] colleagues—superiors, subordinates, and peers."

" let each person know what information they’ll need to get the job done. The information flow from subordinate to boss is usually what gets the most attention. But executives need to pay equal attention to peers’ and superiors’ information needs.

We all know, thanks to Chester Barnard’s 1938 classic The Functions of the Executive, that organizations are held together by information rather than by ownership or command. Still, far too many executives behave as if information and its flow were the job of the information specialist—for example, the accountant. As a result, they get an enormous amount of data they do not need and cannot use, but little of the information they do need. The best way around this problem is for each executive to identify the information he needs, ask for it, and keep pushing until he gets it. "

focus on opportunities rather than problems

"...problem solving, however necessary, does not produce results. It prevents damage. Exploiting opportunities produces results.

...effective executives treat change as an opportunity rather than a threat. "

" make sure that problems do not overwhelm opportunities. In most companies, the first page of the monthly management report lists key problems. It’s far wiser to list opportunities on the first page and leave problems for the second page. Unless there is a true catastrophe, problems are not discussed in management meetings until opportunities have been analyzed and properly dealt with.

Staffing is another important aspect of being opportunity focused. Effective executives put their best people on opportunities rather than on problems. One way to staff for opportunities is to ask each member of the management group to prepare two lists every six months—a list of opportunities for the entire enterprise and a list of the best-performing people throughout the enterprise. These are discussed, then melded into two master lists, and the best people are matched with the best opportunities. In Japan, by the way, this match-up is considered a major HR task in a big corporation or government department; that practice is one of the key strengths of Japanese business "

Make meetings productive

" every study of the executive workday has found that even junior executives and professionals are with other people -- that is, in a meeting of some sort -- more than half of every business day. The only exceptions are a few senior researchers. Even a conversation with only one other person is a meeting. Hence, if they are to be effective, executives must make meetings productive. They must make sure that meetings are work sessions rather than bull sessions.

The key to running an effective meeting is to decide in advance what kind of meeting it will be. Different kinds of meetings require different forms of preparation and different results:

A meeting to prepare a statement, an announcement, or a press release. For this to be productive, one member has to prepare a draft beforehand. At the meeting’s end, a preappointed member has to take responsibility for disseminating the final text.

A meeting to make an announcement—for example, an organizational change. This meeting should be confined to the announcement and a discussion about it.

A meeting in which one member reports. Nothing but the report should be discussed.

A meeting in which several or all members report. Either there should be no discussion at all or the discussion should be limited to questions for clarification. Alternatively, for each report there could be a short discussion in which all participants may ask questions. If this is the format, the reports should be distributed to all participants well before the meeting. At this kind of meeting, each report should be limited to a preset time—for example, 15 minutes.

A meeting to inform the convening executive. The executive should listen and ask questions. He or she should sum up but not make a presentation.

A meeting whose only function is to allow the participants to be in the executive’s presence. Cardinal Spellman’s breakfast and dinner meetings were of that kind. There is no way to make these meetings productive. They are the penalties of rank. Senior executives are effective to the extent to which they can prevent such meetings from encroaching on their workdays. Spellman, for instance, was effective in large part because he confined such meetings to breakfast and dinner and kept the rest of his working day free of them.

Making a meeting productive takes a good deal of self-discipline. It requires that executives determine what kind of meeting is appropriate and then stick to that format. It’s also necessary to terminate the meeting as soon as its specific purpose has been accomplished. Good executives don’t raise another matter for discussion. They sum up and adjourn.

Good follow-up is just as important as the meeting itself. The great master of follow-up was Alfred Sloan, the most effective business executive I have ever known. Sloan, who headed General Motors from the 1920s until the 1950s, spent most of his six working days a week in meetings—three days a week in formal committee meetings with a set membership, the other three days in ad hoc meetings with individual GM executives or with a small group of executives. At the beginning of a formal meeting, Sloan announced the meeting’s purpose. He then listened. He never took notes and he rarely spoke except to clarify a confusing point. At the end he summed up, thanked the participants, and left. Then he immediately wrote a short memo addressed to one attendee of the meeting. In that note, he summarized the discussion and its conclusions and spelled out any work assignment decided upon in the meeting (including a decision to hold another meeting on the subject or to study an issue). He specified the deadline and the executive who was to be accountable for the assignment. He sent a copy of the memo to everyone who’d been present at the meeting. It was through these memos—each a small masterpiece—that Sloan made himself into an outstandingly effective executive. "

" Every meeting generates a host of little follow-up meetings... Meetings...need to be purposefully directed... But above all, meetings have to be the exception rather than the rule.... There are exceptions, special organs whose purpose it is to meet—the boards of directors, for instance, of such companies as Du Pont and Standard Oil of New Jersey which are the final organs of deliberation and appeal but which do not operate anything. But as these two companies realized a long time ago, the people who sit on these boards cannot be permitted to do anything else; for the same reason, by the way, that judges cannot be permitted to be also advocates in their spare time. "


Effective executives ask themselves: “Why are we having this meeting? Do we want a decision, do we want to inform, or do we want to make clear to ourselves what we should be doing?” They insist that the purpose be thought through and spelled out before a meeting is called, a report asked for, or a presentation organized. • The effective man always states at the outset of a meeting the specific purpose and contribution it is to achieve. He makes sure that the meeting addresses itself to this purpose. He does not allow a meeting called to inform to degenerate into a “bull session” in which everyone has bright ideas. But a meeting called by him to stimulate thinking and ideas also does not become simply a presentation on the part of one of the members, but is run to challenge and stimulate everybody in the room. He always, at the end of his meetings, goes back to the opening statement and relates the final conclusions to the original intent.

There are other rules for making a meeting productive (for instance, the obvious but usually disregarded rule that one can either direct a meeting and listen for the important things being said, or one can take part and talk; one cannot do both). But the cardinal rule is to focus it from the start on contribution. "

too-large meetings are no good



• The senior financial executive of a large organization knew perfectly well that the meetings in his office wasted a lot of time. This man asked all his direct subordinates to every meeting, whatever the topic. As a result the meetings were far too large. And because every participant felt that he had to show interest, everybody asked at least one question — most of them irrelevant. As a result the meetings stretched on endlessly. But the senior executive had not known, until he asked, that his subordinates too considered the meetings a waste of their time. Aware of the great importance everyone in the organization placed on status and on being “in the know,” he had feared that the uninvited men would feel slighted and left out.

Now, however, he satisfies the status needs of his subordinates in a different manner. He sends out a printed form which reads: “I have asked [Messrs Smith, Jones, and Robinson] to meet with me [Wednesday at 3] in [the fourth floor conference room] to discuss budget. Please come if you think that you need the information or want to take part in the discussion. But you will in any event receive right away a full summary of the discussion and of any decisions reached, together with a request for your comments.”

Where formerly a dozen people came and stayed all afternoon, three men and a secretary to take the notes now get the matter over with within an hour or so. And no one feels left out. "

Think and Say “We”

"Don’t think or say “I.” Think and say “we.” Effective executives know that they have ultimate responsibility, which can be neither shared nor delegated. But they have authority only because they have the trust of the organization. This means that they think of the needs and the opportunities of the organization before they think of their own needs and opportunities. This one may sound simple; it isn’t, but it needs to be strictly observed. "

chapter 1: effectiveness can be learned

defn exec and effectiveness

effectiveness := the job of the executive := to get the RIGHT things done

any knowledge worker whose job is important for the whole organization is an "executive" the way he uses the term in this book;


Every knowledge worker in modern organization is an “executive” if, by virtue of his position or knowledge, he is responsible for a contribution that materially affects the capacity of the organization to perform and to obtain results,"

the need for "effectiveness" skills [i would just say "executive" skills] is that you may be able to measure how much work someone does, but you cannot measure how good they are at choosing the RIGHT things to get done. "

effectiveness is uncorrelated with intelligence, imagination, and knowledge

" of high effectiveness are conspicuous by their absence in executive jobs. High intelligence is common enough among executives. Imagination is far from rare. The level of knowledge tends to be high. But there seems to be little correlation between a man's effectiveness and his intelligence, his imagination or his knowledge"

effectiveness is important for knowledge workers

" The knowledge worker cannot be supervised closely or in detail. He can only be helped. But he must direct himself, and he must direct himself toward performance and contribution, that is, toward effectiveness. "

" The motivation of the knowledge worker depends on his being effective, on his being able to achieve. If effectiveness is lacking in his or her work, his commitment to work and to contribution will soon wither, and he will become a time-server going through the motions from 9-5. "

Four problems that executives have

The executive’s time tends to belong to everybody else

Executives are forced to keep on “operating” unless they take positive action to change the reality in which they live and work

"...the complaint is common that the company president -- or any other senior officer -- still continues to run marketing or the plant, even though he is now in charge of the whole business and should be giving his time to its direction.

The fundamental problem is the reality around the executive. Unless he changes it by deliberate action, the flow of events will determine what he is concerned with and what he rarely tell the executive anything, let alone the real problem...

If the executive lets the flow of events determine what he does, what he works on, and what he takes seriously, he will fritter himself away “operating.” He may be an excellent man. But he is certain to waste his knowledge and ability and to throw away what little effectiveness he might have achieved. What the executive needs are criteria which enable him to work on the truly important, that is, on contributions and results, even though the criteria are not found in the flow of events. "

he is effective only if and when other people make use of what he contributes

often his peers, not subordinates or superiors

the executive is within an organization

"Every executive... sees the inside -- the organization -- as close and immediate reality. He sees the outside only through thick and distorting lenses, if at all....received through an organizational filter of reports, that is, in an already predigested and highly abstract form that imposes organizational criteria of relevance on the outside reality. ... Specifically, there are no results within the organization. All the results are on the outside. "

Compare the four problems to physicians (non-executives)

"The patient who walks into his office brings with him everything to make the physician’s knowledge effective. During the time he is with the patient, the doctor can, as a rule, devote himself to the patient. He can keep interruptions to a minimum. The contribution the physician is expected to make is clear. What is important, and what is not, is determined by whatever ails the patient. The patient’s complaints establish the doctor’s priorities. And the goal, the objective, is given: It is to restore the patient to health or at least to make him more comfortable. Physicians are not noted for their capacity to organize themselves and their work. But few of them have much trouble being effective. ... an executive cannot, as a rule, like the physician, stick his head out the door and say to the nurse, “I won’t see anybody for the next half hour.” ...

Depending on the flow of events is appropriate for the physician. The doctor who looks up when a patient comes in and says: “Why are you here today?” expects the patient to tell him what is relevant. When the patient says, “Doctor, I can’t sleep. I haven’t been able to go to sleep the last three weeks,” he is telling the doctor what the priority area is. Even if the doctor decides, upon closer examination, that the sleeplessness is a fairly minor symptom of a much more fundamental condition he will do something to help the patient to get a few good nights’ rest.

But events rarely tell the executive anything, let alone the real problem. For the doctor, the patient’s complaint is central because it is central to the patient. The executive is concerned with a much more complex universe. What events are important and relevant and what events are merely distractions the events themselves do not indicate. They are not even symptoms in the sense in which the patient’s narrative is a clue for the physician.

inside the organization, and a danger of reliance upon facts

quantifiable facts are usually only found within the organization. "The relevant outside events are rarely available in quantifiable form until it is much too late to do anything about them."

"The danger is that executives will become contemptuous of information and stimulus that cannot be reduced to computer logic and computer language. Executives may become blind to everything that is perception (i.e., event) rather than fact (i.e., after the event)."

the promise of effectiveness

" Increasing effectiveness may well be the only area where we can hope significantly to raise the level of executive performance, achievement, and satisfaction. "

many management books envisage "the manager of tomorrow" as people who are good at an in-credible variety of disparate areas. This is impossible (or at least, training to that level is not cost-effective). Academics often make the same impossible demand. Instead, we must make do with what we have; adapt the organization to people actually available in the real world.

(however, "I am not saying that one need not try to understand the fundamentals of every one of these has a responsibility to know at least what these areas are about, why they are around, and what they are trying to do. One need not know psychiatry to be a good urologist. But one had better know what psychiatry is all about. One need not be an international lawyer to do a good job in the Department of Agriculture. But one had better know enough about international politics not to do international damage through a parochial farm policy.")

5 practices

" 1. Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control.

2. Effective executives focus on outward contribution. They gear their efforts to results rather than to work. They start out with the question, “What results are expected of me?” rather than with the work to be done, let alone with its techniques and tools.

3. Effective executives build on strengths—their own strengths, the strengths of their superiors, colleagues, and subordinates; and on the strengths in the situation, that is, on what they can do. They do not build on weakness. They do not start out with the things they cannot do.

4. Effective executives concentrate on the few major areas where superior performance will produce outstanding results. They force themselves to set priorities and stay with their priority decisions. They know that they have no choice but to do first things first—and second things not at all. The alternative is to get nothing done.

5. Effective executives, finally, make effective decisions. They know that this is, above all, a matter of system—of the right steps in the right sequence. They know that an effective decision is always a judgment based on “dissenting opinions” rather than on “consensus on the facts.” And they know that to make many decisions fast means to make the wrong decisions. What is needed are few, but fundamental, decisions. What is needed is the right strategy rather than razzle-dazzle tactics. "

chapter 2: know thy time

" Most discussions of the executive’s task start with the advice to plan one’s rarely works. The plans always remain on paper, always remain good intentions. They seldom turn into achievement.

Effective executives, in my observation, do not start with their tasks. They start with their time. And they do not start out with planning. They start by finding out where their time actually goes. Then they attempt to manage their time and to cut back unproductive demands on their time. Finally they consolidate their “discretionary” time into the largest possible continuing units....three-step process:

record how you spend your time in a log

"If we rely on our memory...we do not know how time has been spent.

I sometimes ask executives who pride themselves on their memory to put down their guess as to how they spend their own time. Then I lock these guesses away for a few weeks or months. In the meantime, the executives run an actual time record on themselves. There is never much resemblance between the way these men thought they used their time and their actual records. "

So record how you spend your time.

" A good many effective executives keep such a log continuously and look at it regularly every month. At a minimum, effective executives have the log run on themselves for three to four weeks at a stretch twice a year or so, on a regular schedule. "

how to optimize time use after you keep a time log

cut out unimportant things

"[ask] of all activities in the time records: “What would happen if this were not done at all?” And if the answer is, “Nothing would happen,” then obviously the conclusion is to stop doing it. ... example:

"• The chief executive mentioned above who had to dine out every night found, when he analyzed these dinners, that at least one third would proceed just as well without anyone from the company’s senior management. In fact, he found (somewhat to his chagrin) that his acceptance of a good many of these invitations was by no means welcome to his hosts. They had invited him as a polite gesture. But they had fully expected to be turned down and did not quite know what to do with him when he accepted. "

almost everyone can cut out at least 1/4 of the demands on their time without anyone noticing.


“Which of the activities on my time log could be done by somebody else just as well, if not better?”

note: this does NOT mean delegating "your work" out of laziness! It means you working hard, and working on the stuff that (a) you consider important (b) you are good at, (c) you are committed to doing, by pushing work that is not your strength to other people whenever possible.

examples of things to look at:

stop wasting others' time

" There is no one symptom for this. But there is still a simple way to find out. That is to ask other people. Effective executives have learned to ask systematically and without coyness: “What do I do that wastes your time without contributing to your effectiveness?” To ask this question, and to ask it without being afraid of the truth, is a mark of the effective executive. "

many people know about various time wastes, but "are afraid to prune them. They are afraid to cut out something important by mistake.". But it's better to overprune and then correct. It's unlikely that you won't notice if you overprune. And people tend to overrate rather than underrate their own importance, so you probably won't overprune.

pruning time wasters at the organizational level

recurrent crises

" identify the time-wasters which follow from lack of system or foresight. The symptom to look for is the recurrent “crisis,” the crisis that comes back year after year. A crisis that recurs a second time is a crisis that must not occur again... a well-managed organization is a “dull” organization. The “dramatic” things in such an organization are basic decisions that make the future, rather than heroics in mopping up yesterday. "

when you find a recurrent crisis, create a system to handle it in a routine manner.


" • My first-grade arithmetic primer asked: “If it takes two ditch-diggers two days to dig a ditch, how long would it take four ditch-diggers?” In first grade, the correct answer is, of course, “one day.” In the kind of work, however, with which executives are concerned, the right answer is probably “four days” if not “forever.” A work force may, indeed, be too small for the task. And the work then suffers, if it gets done at all. But this is not the rule. Much more common is the work force that is too big for effectiveness, the work force that spends, therefore, an increasing amount of its time “interacting” rather than working.

There is a fairly reliable symptom of overstaffing. If the senior people in the group—and of course the manager in particular—spend more than a small fraction of their time, maybe one tenth, on “problems of human relations,” on feuds and frictions, on jurisdictional disputes and questions of cooperation, and so on, then the work force is almost certainly too large. "

" The excuse for overstaffing is always “but we have to have a thermodynamicist [or a patent lawyer, or an economist] on the staff.” This specialist is not being used much; he may not be used at all; but “we have to have him around just in case we need him.” (And he always “has to be familiar with our problem” and “be part of the group from the start”!) One should only have on a team the knowledges and skills that are needed day in and day out for the bulk of the work. Specialists that may be needed once in a while, or that may have to be consulted on this or on that, should always remain outside. "


" Its symptom is an excess of meetings. ...if executives in an organization spend more than a fairly small part of their time in meeting, it is a sure sign of malorganization.

Too many meetings signify that work that should be in one job or in one component is spread over several jobs or several components. They signify that responsibility is diffused and that information is not addressed to the people who need it.

malfunction in information

when the executive's time is spent passing on information, or translating information to a different representation, when the information source could just as well communicate directly with the person who needs the informatin.

consolidating 'discretionary time'

it's much more efficient to do most things in a large block of time rather than split into many small blocks.

" Even one quarter of the working day, if consolidated in large time units, is usually enough to get the important things done. But even three quarters of the working day are useless if they are only available as fifteen minutes here or half an hour there. .... There are a good many ways of doing this. Some people, usually senior men, work at home one day a week; this is a particularly common method of time-consolidation for editors or research scientists.

Other men schedule all the operating work—the meetings, reviews, problem-sessions, and so on for two days a week, for example, Monday and Friday, and set aside the mornings of the remaining days for consistent, continuing work on major issues. ... Another fairly common method is to schedule a daily work period at home in the morning. ... But the method by which one consolidates one’s discretionary time is far less important than the approach. Most people tackle the job by trying to push the secondary, the less productive matters together, thus clearing, so to speak, a free space between them. This does not lead very far, however. One still gives priority in one’s mind and in one’s schedule to the less important things, the things that have to be done even though they contribute little. As a result, any new time pressure is likely to be satisfied at the expense of the discretionary time and of the work that should be done in it. Within a few days or weeks, the entire discretionary time will then be gone again, nibbled away by new crises, new immediacies, new trivia.

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....

how much time people tend to have

" Whenever I see a senior executive asserting that more than half his time is under his control and is really discretionary time which he invests and spends according to his own judgment, I am reasonably certain that he has no idea where his time goes.

Senior executives rarely have as much as one quarter of their time truly at their disposal and available for the important matters, the matters that contribute, the matters they are being paid for. This is true in any organization except that in the government agency the unproductive time demands on the top people tend to be even higher than they are in other large organizations.

The higher up an executive, the larger will be the proportion of time that is not under his control and yet not spent on contribution. The larger the organization, the more time will be needed just to keep the organization together and running, rather than to make it function and produce. "

this is an ongoing process

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.

• One highly effective man I know keeps two such lists—one of the urgent and one of the unpleasant things that have to be done—each with a deadline. When he finds his deadlines slipping, he knows his time is again getting away from him. "

chapter 3: What Can I Contribute?

" The effective executive focuses on contribution. He looks up from his work and outward toward goals. He asks: “What can I contribute that will significantly affect the performance and the results of the institution I serve?” His stress is on responsibility. "

" To ask, “What can I contribute?” is to look for the unused potential in the job. And what is considered excellent performance in a good many positions is often but a pale shadow of the job’s full potential of contribution. "

what the opposite looks like

" The great majority of executives tend to focus downward. They are occupied with efforts rather than with results. They worry over what the organization and their superiors “owe” them and should do for them. And they are conscious above all of the authority they “should have.” As a result, they render themselves ineffectual.

• The head of one of the large management consulting firms always starts an assignment with a new client by spending a few days visiting the senior executives of the client organization one by one. After he has chatted with them about the assignment and the client organization, its history and its people, he asks (though rarely, of course, in these words): “And what do you do that justifies your being on the payroll?” The great majority, he reports, answer: “I run the accounting department,” or “I am in charge of the sales force.” Indeed, not uncommonly the answer is, “I have 850 people working under me.” Only a few say, “It’s my job to give our managers the information they need to make the right decisions,” or “I am responsible for finding out what products the customer will want tomorrow,” or “I have to think through and prepare the decisions the president will have to face tomorrow.”

The man who focuses on efforts and who stresses his downward authority is a subordinate no matter how exalted his title and rank. But the man who focuses on contribution and who takes responsibility for results, no matter how junior, is in the most literal sense of the phrase, “top management.” He holds himself accountable for the performance of the whole. "

types of contribution

" ...every organization needs performance in three major areas: It needs direct results; building of values and their reaffirmation; and building and developing people for tomorrow. If deprived of performance in any one of these areas, it will decay and die. "


The direct results of an organization are clearly visible, as a rule... even direct results are not totally unambiguous...when there is confusion as to what they should be, there are no results. ... Direct results always come first. In the care and feeding of an organization, they play the role calories play in the nutrition of the human body. But any organization also needs a commitment to values and their constant reaffirmation, as a human body needs vitamins and minerals. There has to be something “this organization stands for,” or else it degenerates into disorganization, confusion, and paralysis. In a business, the value commitment may be to technical leadership or (as in Sears Roebuck) to finding the right goods and services for the American family and to procuring them at the lowest price and the best quality. "

"The most common cause of executive failure is inability or unwillingness to change with the demands of a new position." e.g. by not adapting to a new balance of types of contribution demanded.


" For the knowledge worker to focus on contribution is particularly important. This alone can enable him to contribute at all.

Knowledge workers do not produce a “thing.” They produce ideas, information, concepts. The knowledge worker, moreover, is usually a specialist. In fact, he can, as a rule, be effective only if he has learned to do one thing very well; that is, if he has specialized. By itself, however, a specialty is a fragment and sterile. Its output has to be put together with the output of other specialists before it can produce results.

The task is not to breed generalists. It is to enable the specialist to make himself and his specialty effective. This means that he must think through who is to use his output and what the user needs to know and to understand to be able to make productive the fragment the specialist produces. "

" The man of knowledge has always been expected to take responsibility for being understood. It is barbarian arrogance to assume that the layman can or should make the effort to understand him, and that it is enough if the man of knowledge talks to a handful of fellow experts who are his peers. Even in the university or in the research laboratory, this attitude—alas, only too common today—condemns the expert to uselessness and converts his knowledge from learning into pedantry. If a man wants to be an executive—that is, if he wants to be considered responsible for his contribution—he has to concern himself with the usability of his “product”—that is, his knowledge. "

" Effective executives find themselves asking other people in the organization, their superiors, their subordinates, but above all, their colleagues in other areas: “What contribution from me do you require to make your contribution to the organization? When do you need this, how do you need it, and in what form?” "

chapter 4: Making Strength Productive


make staffing decisions based upon maximizing strength, not on minimizing weakness. Don't ask “What can a man not do?," ask, “What can he do uncommonly well?” "...look for excellence in one major area, and not for performance that gets by all around."

"There is no such thing as a “good man.” Good for what? is the question."

don't ask "How does he get along with me?”". "subordinates are paid to perform and not to please their superiors... it does not matter how many tantrums a prima donna throws as long as she brings in the customers."

"men who build first-class executive teams are not usually close to their immediate colleagues and subordinates"

This may seem obvious. Why do ppl do otherwise? "The main reason is that the immediate task of the executive is not to place a man; it is to fill a job. The tendency is therefore to start out with the job... It is only too easy to be misled this way into looking for the “least misfit”"...The widely advertised “cure” for this is to structure jobs to fit the personalities available. But this cure is worse than the disease—except perhaps in a very small and simple organization"

two arguments for impersonal, objective jobs

"One reason for this is that every change in the definition, structure, and position of a job within an organization sets off a chain reaction of changes throughout the entire institution.""

" It is the only way to provide the organization with the human diversity it needs. It is the only way to tolerate — indeed to encourage—differences in temperament and personality in an organization. To tolerate diversity, relationships must be task-focused rather than personality-focused. Achievement must be measured against objective criteria of contribution and performance. This is possible, however, only if jobs are defined and structured impersonally. Otherwise the accent will be on “Who is right?” rather than on “What is right?” In no time, personnel decisions will be made on “Do I like this fellow?” or “Will he be acceptable?” rather than by asking “Is he the man most likely to do an outstanding job?” Structuring jobs to fit personality is almost certain to lead to favoritism and conformity. "

" Of course there are always exceptions where the job should be fitted to the man. Even Sloan, despite his insistence on impersonal structure, consciously designed the early engineering organization of General Motors around a man, Charles F. Kettering, the great inventor"

argument against expecting to find people who are good at everything

" People with many interests do exist—and this is usually what we mean when we talk of a “universal genius.” People with outstanding accomplishments in many areas are unknown. Even Leonardo performed only in the area of design despite his manifold interests; if Goethe’s poetry had been lost and all that were known of his work were his dabblings in optics and philosophy, he would not even rate a footnote in the most learned encyclopedia. What is true for the giants holds doubly for the rest of us. "

" Of course there are always exceptions where the job should be fitted to the man. Even Sloan, despite his insistence on impersonal structure, consciously designed the early engineering organization of General Motors around a man, Charles F. Kettering, the great inventor...these exceptions should be rare. And they should only be made for a man who has proven exceptional capacity to do the unusual with excellence. "

four rules

1. make sure the job requirements are feasible

1. [be] on guard against the “impossible” job.

Such jobs are common. They usually look exceedingly logical on paper. But they cannot be filled. One man of proven performance capacity after the other is tried—and none does well. Six months or a year later, the job has defeated them.

Almost always such a job was first created to accommodate an unusual man and tailored to his idiosyncrasies. It usually calls for a mixture of temperaments that is rarely found in one person...

The rule is simple: Any job that has defeated two or three men in succession, even though each had performed well in his previous assignments, must be assumed unfit for human beings. It must be redesigned.


" ....the test of organization is not genius. It is its capacity to make common people achieve uncommon performance. "

2. make each job demanding and big

"It should have challenge to bring out whatever strength a man may have."


This, however, is not the policy of most large organizations. They tend to make the job small ... The demands of any job above the simplest are also bound to change, and often abruptly. The “perfect fit” then rapidly becomes the misfit. Only if the job is big and demanding to begin with, will it enable a man to rise to the new demands of a changed situation. "

" This rule applies to the job of the beginning knowledge worker in particular...the most important thing to find out is what he really can do.

It is equally important for him to find out as early as possible whether he is indeed in the right place, or even in the right kind of work. "

•...It is equally true between organizations of the same kind. I have yet to see two large businesses which have the same values and stress the same contributions. That a man who was happy and productive as a member of the faculty of one university may find himself lost, unhappy, and frustrated when he moves to another one every academic administrator has learned. "

" Every survey of young knowledge workers...produces the same results. The ones who are enthusiastic and who, in turn, have results to show for their work, are the ones whose abilities are being challenged and used. Those that are deeply frustrated all say, in one way or another: “My abilities are not being put to use.” "

" The young knowledge worker whose job is too small to challenge and test his abilities either leaves or declines rapidly into premature middle-age, soured, cynical, unproductive. Executives everywhere complain that many young men with fire in their bellies turn so soon into burned-out sticks. They have only themselves to blame: They quenched the fire by making the young man’s job too small. "

3. start with what a man can do rather than with what a job requires

" [effective executives] do their thinking about people long before the decision on filling a job has to be made, and independently of it.

This is the reason for the wide adoption of appraisal procedures today, in which people, especially those in knowledge work, are regularly judged. The purpose is to arrive at an appraisal of a man before one has to decide whether he is the right person to fill a bigger position.

However, while almost every large organization has an appraisal procedure, few of them actually use it....Everybody dismisses them as so much useless paper. Above all, almost without exception, the “appraisal interview” in which the superior is to sit down with the subordinate and discuss the findings never takes place. Yet the appraisal interview is the crux of the whole system. One clue to what is wrong was contained in an advertisement of a new book on management which talked of the appraisal interview as “the most distasteful job” of the superior. "

the problem is that typically appraisals focus on weaknesses rather than strengths. good managers know this is a bad idea and so refuse to use them.

" For a superior to focus on weakness, as our appraisals require him to do, destroys the integrity of his relationship with his subordinates. ... To discuss a man’s defects when he comes in as a patient seeking help is the responsibility of the healer. But, as has been known since Hippocrates, this presupposes a professional and privileged relationship between healer and patient which is incompatible with the authority relationship between superior and subordinate. It is a relationship that makes continued working together almost impossible. That so few executives use the official appraisal is thus hardly surprising. It is the wrong tool, in the wrong situation, for the wrong purpose.

Appraisals—and the philosophy behind them—are also far too much concerned with “potential.” But experienced people have learned that one cannot appraise potential for any length of time ahead or for anything very different from what a man is already doing. ... All one can measure is performance. And all one should measure is performance. This is another reason for making jobs big and challenging. It is also a reason for thinking through the contribution a man should make to the results and the performance of his organization. For one can measure the performance of a man only against specific performance expectations.

Still one needs some form of appraisal procedure—or else one makes the personnel evaluation at the wrong time, that is when a job has to be filled. Effective executives, therefore, usually work out their own radically different form. It starts out with a statement of the major contributions expected from a man in his past and present positions and a record of his performance against these goals. Then it asks four questions:

(a) “What has he [or she] done well?”

(b) “What, therefore, is he likely to be able to do well?”

(c) “What does he have to learn or to acquire to be able to get the full benefit from his strength?”

(d) “If I had a son or daughter, would I be willing to have him or her work under this person?”

(i) “If yes, why?”

(ii) “If no, why?”

This appraisal actually takes a much more critical look at a man than the usual procedure does. But it focuses on strengths. It begins with what a man can do. Weaknesses are seen as limitations to the full use of his strengths and to his own achievement, effectiveness, and accomplishment.

The last question (ii) is the only one which is not primarily concerned with strengths. Subordinates, especially bright, young, and ambitious ones, tend to mold themselves after a forceful boss. There is, therefore, nothing more corrupting and more destructive in an organization than a forceful but basically corrupt executive. Such a man might well operate effectively on his own; even within an organization, he might be tolerable if denied all power over others. But in a position of power within an organization, he destroys. Here, therefore, is the one area in which weakness in itself is of importance and relevance.

By themselves, character and integrity do not accomplish anything. But their absence faults everything else. Here, therefore, is the one area where weakness is a disqualification by itself rather than a limitation on performance capacity and strength. "

4. [know] that to get strength one has to put up with weaknesses

" The effective executive will therefore ask: “Does this man have strength in one major area? And is this strength relevant to the task? If he achieves excellence in this one area, will it make a significant difference?” And if the answer is “yes,” he will go ahead and appoint the man.

Effective executives rarely suffer from the delusion that two mediocrities achieve as much as one good man. They have learned that, as a rule, two mediocrities achieve even less than one mediocrity—they just get in each other’s way. They accept that abilities must be specific to produce performance. They never talk of a “good man” but always about a man who is “good” for some one task. But in this one task, they search for strength and staff for excellence.

focus on opportunity in staffing, not on problems

"Altogether it must be an unbreakable rule to promote the man who by the test of performance is best qualified for the job to be filled. All arguments to the contrary—“He is indispensable” . . . “He won’t be acceptable to the people there” . . . “He is too young” . . . or “We never put a man in there without field experience”—should be given short shrift. Not only does the job deserve the best man. The man of proven performance has earned the opportunity. Staffing the opportunities instead of the problems not only creates the most effective organization, it also creates enthusiasm and dedication. "

"[be] intolerant of the argument: “I can’t spare this man; I’d be in trouble without him.” They have learned that there are only three explanations for an “indispensable man”: He is actually incompetent and can only survive if carefully shielded from demands; his strength is misused to bolster a weak superior who cannot stand on his own two feet; or his strength is misused to delay tackling a serious problem if not to conceal its existence.

In every one of these situations, the “indispensable man” should be moved anyhow—and soon. Otherwise one only destroys whatever strengths he may have.

• The chief executive who was mentioned in Chapter 3 for his unconventional methods of making effective the manager-development policies of a large retail chain also decided to move automatically anyone whose boss described him as indispensable. “This either means,” he said, “that I have a weak superior or a weak subordinate—or both. Whichever of these, the sooner we find out, the better.” "

remove a person who consistently fails to perform with high distinction

" 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. It is grossly unfair to the whole organization. It is grossly unfair to his subordinates who are deprived by their superior’s inadequacy of opportunities for achievement and recognition. Above all, it is senseless cruelty to the man himself. He knows that he is inadequate whether he admits it to himself or not. Indeed, I have never seen anyone in a job for which he was inadequate who was not slowly being destroyed by the pressure and the strains, and who did not secretly pray for deliverance. That neither the Japanese “lifetime employment” nor the various civil service systems of the West consider proven incompetence ground for removal is a serious weakness—and an unnecessary one.

• General Marshall during World War II insisted that a general officer be immediately relieved if found less than outstanding. To keep him in command, he reasoned, was incompatible with the responsibility the army and the nation owed the men under an officer’s command. Marshall flatly refused to listen to the argument: “But we have no replacement.” “All that matters,” he pointed out, “is that you know that this man is not equal to the task. Where his replacement comes from is the next question.”

But Marshall also insisted that to relieve a man from command was less a judgment on the man than on the commander who had appointed him. “The only thing we know is that this spot was the wrong one for the man,” he argued. “This does not mean that he is not the ideal man for some other job. Appointing him was my mistake, now it’s up to me to find what he can do.” "


" the effective executive tries to make fully productive the strengths of his own superior.

I have yet to find a manager, whether in business, in government, or in any other institution, who did not say: “I have no great trouble managing my subordinates. But how do I manage my boss?” It is actually remarkably easy...effective executives make the strengths of the boss productive.

• This should be elementary prudence. Contrary to popular legend, subordinates do not, as a rule, rise to position and prominence over the prostrate bodies of incompetent bosses. If their boss is not promoted, they will tend to be bottled up behind him. And if their boss is relieved for incompetence or failure, the successor is rarely the bright, young man next in line. He usually is brought in from the outside and brings with him his own bright, young men. Conversely, there is nothing quite as conducive to success, as a successful and rapidly promoted superior. "

don't try to "reform" the boss (this is focusing on weakness rather than strength). ask “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?” He does not worry too much over what the boss cannot do.

e.g. "The able senior civil servant is inclined to see himself as the tutor to the newly appointed political head of his agency. He tries to get his boss to overcome his limitations. The effective ones ask instead: “What can the new boss do?” And if the answer is: “He is good at relationships with Congress, the White House, and the public,” then the civil servant works at making it possible for his minister to use these abilities. For the best administration and the best policy decisions are futile unless there is also political skill in representing them. Once the politician knows that the civil servant supports him, he will soon enough listen to him on policy and on administration."

start with one is right and present it in a form which is accessible to the superior

"One does not make the strengths of the boss productive by toadying to him. One does it by starting out with what is right and presenting it in a form which is accessible to the superior."

The adaptation needed to think through the strengths of the boss and to try to make them productive always affects the “how” rather than the “what.” It concerns the order in which different areas, all of them relevant, are presented, rather than what is important or right. If the superior’s strength lies in his political ability in a job in which political ability is truly relevant, then one presents to him first the political aspect of a situation. This enables him to grasp what the issue is all about and to put his strength effectively behind a new policy. "

also consider if the boss is a reader, or a listener (or the small group of people who get information by talking and then judging others' reactions); if the boss needs a one-page summary or a complete exposition of your thought process; if they want to hear about each matter at the early stages, or only when the matter is "ripe" for decision


focus on your strengths, not your weaknesses.


" • Everyone in the management of one of the major railroads knew that the government would not let the company do anything. But then a new financial vice-president came in who had not yet learned that “lesson.” Instead he went to Washington, called on the Interstate Commerce Commission and asked for permission to do a few rather radical things. “Most of these things,” the commissioners said, “are none of our concern to begin with. The others you have to try and test out and then we will be glad to give you the go-ahead.” The assertion that “somebody else will not let me do anything” should always be suspected as a cover-up for inertia. But even where the situation does set limitations—and everyone lives and works within rather stringent limitations—there are usually important, meaningful, pertinent things that can be done. The effective executive looks for them. If he starts out with the question: “What can I do?” he is almost certain to find that he can actually do much more than he has time and resources for. "

do things in the way that makes you perform best, e.g. working in the morning vs. night; writing many quick drafts vs. one good draft; speaking with or without a prepared speech; working in a committee or alone; with a detailed outline, or none; under pressure, or ahead of time; reader vs. listener.

and focus on your strengths. e.g. are you good at writing reports? making decisions? working alone or with others? negotiating? predicting what the other side will ask for in a negotiation?


"only strength produces results. Weakness only produces headaches—and the absence of weakness produces nothing.

The task of an executive is not to change human beings. Rather, as the Bible tells us in the parable of the Talents, the task is to multiply performance capacity of the whole by putting to use whatever strength, whatever health, whatever aspiration there is in individuals.

it's important to have strong leaders

...the standard of any human group is set by the performance of the leaders. And he, therefore, never allows leadership performance to be based on anything but true strength. • In sports we have long learned that the moment a new record is set every athlete all over the world acquires a new dimension of accomplishment. For years no one could run the mile in less than four minutes. Suddenly Roger Bannister broke through the old record. And soon the average sprinters in every athletic club in the world were approaching yesterday’s record, while new leaders began to break through the four-minute barrier.

In human affairs, the distance between the leaders and the average is a constant. If leadership performance is high, the average will go up. The effective executive knows that it is easier to raise the performance of one leader than it is to raise the performance of a whole mass. He therefore makes sure that he puts into the leadership position, into the standard-setting, the performance-making position, the man who has the strength to do the outstanding, the pace-setting job. This always requires focus on the one strength of a man and dismissal of weaknesses as irrelevant unless they hamper the full deployment of the available strength. "

chapter 5: First Things First

Concentrate. "Do first things first and... do one thing at a time"

some people work better when doing two things at a time. But that's it.

this maximizes throughput. People who “do so many things” can do so because they get each one done quickly, because they do only one at a time.

The people who get nothing done often work a great deal harder.

Be careful not to underestimate the time for tasks. Never assume that everything will go right, always leave a time margin. "


it is to be expected that executives will have to spend most of their time and energy "patching up or bailing out the actions and decisions of yesterday". however, try to minimize this.

Periodically review projects and ask: " “If we did not already do this, would we go into it now?” And unless the answer is an unconditional “Yes,” ...drop the activity or curtail it sharply". Certainly, immediately pull out the best people and "put [them] to work on the opportunities of tomorrow"

"No one has much difficulty getting rid of the total failures. They liquidate themselves. Yesterday’s successes, however, always linger on long beyond their productive life. Even more dangerous are the activities which should do well and which, for some reason or other, do not produce... It is always the most capable people who are wasted in the futile attempt to obtain for the investment in managerial ego the “success it deserves.”

kill an old activity before starting a new one

" ...nothing new is easy. It always gets into trouble. Unless one has therefore built into the new endeavor the means for bailing it out when it runs into heavy weather, one condemns it to failure from the start. The only effective means for bailing out the new are people who have proven their capacity to perform. Such people are always already busier than they should be. Unless one relieves one of them of his present burden, one cannot expect him to take on the new task.

The alternative—to “hire in” new people for new tasks—is too risky. One hires new people to expand on already established and smoothly running activity. But one starts something new with people of tested and proven strength, that is, with veterans. Every new task is such a gamble—even if other people have done the same job many times before—that an experienced and effective executive will not, if humanly possible, add to it the additional gamble of hiring an outsider to take charge. He has learned the hard way how many men who looked like geniuses when they worked elsewhere show up as miserable failures six months after they have started working “for us.”

.... There is no lack of ideas in any organization I know. “Creativity” is not our problem. But few organizations ever get going on their own good ideas. Everybody is much too busy on the tasks of yesterday. "


The effects of not prioritizing

" 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. But somehow the tasks will be adjusted to the available time and the opportunities will become available only to the extent to which capable people are around to take charge of them.

If the pressures rather than the executive are allowed to make the decision... Typically, there will then be no time for the most time-consuming part of any task, the conversion of decision into action. ... This almost always means that no task is completed unless other people have taken it on as their own, have accepted new ways of doing old things or the necessity for doing something new, and have otherwise made the executive’s “completed” project their own daily routine. If this is slighted because there is no time, then all the work and effort have been for nothing.


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. ... In particular, a top group which lets itself be controlled by the pressures... will not pay attention to the outside of the organization....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. "

" A good many studies of research scientists have shown that achievement (at least below the genius level of an Einstein, a Niels Bohr, or a Max Planck) depends less on ability in doing research than on the courage to go after opportunity. Those research scientists who pick their projects according to the greatest likelihood of quick success rather than according to the challenge of the problem are unlikely to achieve distinction. They may turn out a great many footnotes, but neither a law of physics nor a new concept is likely to be named after them. Achievement goes to the people who pick their research priorities by the opportunity and who consider other criteria only as qualifiers rather than as determinants.

Similarly, in business the successful companies are not those that work at developing new products for their existing line but those that aim at innovating new technologies or new businesses. As a rule it is just as risky, just as arduous, and just as uncertain to do something small that is new as it is to do something big that is new. "

The difficulty in prioritizing is courage, not analysis

The job is, however, not to set priorities. That is easy.... 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. "

" That one actually abandons what one postpones makes executives, however, shy from postponing anything altogether. They know that this or that task is not a first priority, but giving it a posteriority is risky. What one has relegated may turn out to be the competitor’s triumph. There is no guarantee that the policy area a politician or an administrator has decided to slight may not explode into the hottest and most dangerous political issue. ... 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.

A great deal could be said about the analysis of priorities. The most important thing about priorities and posteriorities is, however, not intelligent analysis but courage. "

What to prioritize

" 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. "

chapter 6: The Elements of Decision-making

Decision-making takes a small fraction of executives' time, but since only executives make decisions [note however that his definition of 'executive' is very broad, and his definition of 'decision' is very narrow (most decisions he calls mere 'adaptations'], we'll give it two chapters.

" Effective executives do not make a great many decisions. They concentrate on the important ones. They try to think through what is strategic and generic, rather than “solve problems.” They try to make the few important decisions on the highest level of conceptual understanding. They try to find the constants in a situation. They are, therefore, not overly impressed by speed in decision-making. Rather they consider virtuosity in manipulating a great many variables a symptom of sloppy thinking. They want to know what the decision is all about and what the underlying realities are which it has to satisfy. "

" 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. "

"[tackle] a problem at the highest conceptual level of understanding. [first, try] to think through what the decision was all about, and [only] then [try] to develop a principle for dealing with has to start with what is right rather than what is acceptable (let alone who is right) precisely because one always has to compromise in the end."



The truly important features of the decisions Vail and Sloan made are neither their novelty nor their controversial nature. They are:"

1. realized that the problem was generic and could only be solved through a decision which established a rule/principle 2. defined the specifications which the answer to the problem had to satisfy 3. thought through what is “right,” that is, the solution which will fully satisfy the specifications before attention is given to the compromises needed to make the decision acceptable 4. built into the decision the action needed to carry it out 5. later, got feedback to test the validity and effectiveness of the decision

Step 1: determine if the problem is generic or exceptional

1. The first question the effective decision-maker asks is: “Is this a generic situation or an exception?”... The genetic always has to be answered through a rule, a principle. The exceptional can only be handled as such and as it comes.

four types of occurrences

All events but the truly unique require a generic solution. They require a rule, a policy, a principle.

determining which type you are facing

The effective decision-maker spends time to determine with which of these four situations he is dealing. He knows that he will make the wrong decision if he classifies the situation wrongly. "

• This largely explains why the American automobile industry found itself in 1966 suddenly under sharp attack for its unsafe cars—and also why the industry itself was so totally bewildered by the attack. It is simply not true that the industry has paid no attention to safety. On the contrary, it has worked hard at safer highway engineering and at driver training. ... Long ago it should have become clear that we have to do something about a small but significant probability of accidents that will occur despite safety laws and safety training. And this means that safe-highway and safe-driving campaigns have to be supplemented by engineering to make accidents themselves less dangerous. 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.

This example shows why the incomplete explanation is often more dangerous than the totally wrong explanation. Everyone connected with safe-driving campaigns—the automobile industry, but also state highway commissioners, automobile clubs, and insurance companies—felt that to accept a probability of accidents was to condone, if not to encourage, dangerous driving— just as my grandmother’s generation believed that the doctor who treated venereal diseases abetted immorality. It is this common human tendency to confuse plausibility with morality which makes the incomplete hypothesis so dangerous a mistake and so hard to correct. "


[therefore, always [assume] initially that the problem is generic, and that the event that clamors for [your] attention is in reality a symptom.]

... 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. "

" The decision-maker also always tests for signs that something atypical, something unusual, is happening; he always asks: “Does the explanation explain the observed events and does it explain all of them?; he always writes out what the solution is expected to make happen—make automobile accidents disappear, for instance—and then tests regularly to see if this really happens; and finally, he goes back and thinks the problem through again when he sees something atypical, when he finds phenomena his explanation does not really explain, or when the course of events deviates, even in details, from his expectations. "

don't make "temporary" decisions you aren't willing to live with for a long time

" One of the most obvious facts of social and political life is the longevity of the temporary. British licensing hours for taverns, for instance, French rent controls, or Washington “temporary” government buildings, all three hastily developed in World War I to last “a few months of temporary emergency” are still with us fifty years later. The effective decision-maker knows this. He too improvises, of course. But he asks himself every time, “If I had to live with this for a long time, would I be willing to?”

And if the answer is “No,” he keeps on working to find a more general, a more conceptual, a more comprehensive solution— one which establishes the right principle. "

note: Holocracy disagrees, as the "INTEGRATIVE DECISION-MAKING PROCESS" specifically constrains any discussion of any proposal to be "focused around each Objection one at a time, about how to add to or amend the proposal to make it a workable option for addressing just the tension behind the original proposal (and nothing more).", and the criteria for raising any Objection includes that the Objectivion be "based on presently-known data or events rather than predicted data or events, provided that an opportunity is likely to exist in the future to sense and respond if and when such predictions begin to manifest"

generic decisions lead to less decisions

"This also explains why the effective decision-maker always tries to put his solution on the highest possible conceptual level. He does not solve the immediate financing problem by issuing whatever security would be easiest to sell at the best price for the next few years. If he expects to need the capital market for the foreseeable future, he invents a new kind of investor and designs the appropriate security for a mass-capital market that does not yet exist." (a reference to Vail of Bell, who invented "grandmother stocks" that paid reliable dividends, in an era where stocks were for speculators)

As a result, the effective executive does not make many decisions. But the reason is not that he takes too long in making one—in fact, a decision on principle does not, as a rule, take longer than a decision on symptoms and expediency. The effective executive does not need to make many decisions. Because he solves generic situations through a rule and policy, he can handle most events as cases under the rule; that is, by adaptation. “A country with many laws is a country of incompetent lawyers,” says an old legal proverb. It is a country which attempts to solve every problem as a unique phenomenon, rather than as a special case under general rules of law. Similarly, an executive who makes many decisions is both lazy and ineffectual.

Step 2: specification

" 2. The second major element in the decision process is clear specifications as to what the decision has to accomplish. What are the objectives the decision has to reach? What are the minimum goals it has to attain? " (he calls these "boundary conditions"; i call them "specifications" or "axioms")

" Yet, defining the specifications and setting the boundary conditions cannot be done on the “facts” in any decision of importance. It always has to be done on interpretation. It is risk-taking judgment.

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.

wrong specification is better than no specification

"The effective executive knows that a decision that does not satisfy the boundary conditions is ineffectual and inappropriate. It may be worse indeed than a decision that satisfies the wrong boundary conditions. Both will be wrong, of course. But one can salvage the appropriate decision for the incorrect boundary conditions. It is still an effective decision. One cannot get anything but trouble from the decision that is inadequate to its specifications. "

examples of problems from poorly specified decisions

" In fact, clear thinking about the boundary conditions is needed so that one knows when a decision has to be abandoned. There are two famous illustrations for this—one of a decision where the boundary conditions had become confused and one of a decision where they were kept so clear as to make possible immediate replacement of the outflanked decision by a new and appropriate policy. • The first example is the famous Schlieffen Plan of the German General Staff at the outbreak of World War I. This plan was meant to enable Germany to fight a war on both the eastern and the western fronts simultaneously without having to splinter her forces between East and West. To accomplish this, the Schlieffen Plan proposed to offer only token opposition to the weaker enemy, that is, to Russia, and to concentrate all forces first on a quick knockout blow against France, after which Russia would be dealt with. This, of course, implied willingness to let the Russian armies move fairly deeply into German territory at the outbreak of the war and until the decisive victory over France. But in August 1914, it became clear that the speed of the Russian armies had been underrated. The Junkers in East Prussia whose estates were overrun by the Russians set up a howl for protection.

Schlieffen himself had kept the boundary conditions clearly in his mind. But his successors were technicians rather than decision-makers and strategists. They jettisoned the basic commitment underlying the Schlieffen Plan, the commitment not to splinter the German forces. They should have dropped the plan. Instead they kept it but made its attainment impossible. They weakened the armies in the West sufficiently to deprive their initial victories of full impact, yet did not strengthen the armies in the East sufficiently to knock out the Russians. They thereby brought about the one thing the Schlieffen Plan had been designed to prevent: a stalemate with its ensuing war of attrition in which superiority of manpower, rather than superiority of strategy, eventually had to win. Instead of a strategy, all they had from there on was confused improvisation, impassioned rhetoric, and hopes for miracles. "

" But clear thinking about the boundary conditions is needed also to identify the most dangerous of all possible decisions: the one that might—just might—work if nothing whatever goes wrong. These decisions always seem to make sense. But when one thinks through the specifications they have to satisfy, one always finds that they are essentially incompatible with each other. That such a decision might succeed is not impossible—it is merely grossly improbable. The trouble with miracles is not, after all, that they happen rarely; it is that one cannot rely on them. "

(Bay of Pigs example) " ... The mistake was failure to think through clearly the boundary conditions that the decision had to satisfy, and refusal to face up to the unpleasant reality that a decision that has to satisfy two different and at bottom incompatible specifications is not a decision but a prayer for a miracle. "

Step 3: finding the ideal

BEFORE making compromises

" 3. One has to start out with what is right rather than what is acceptable (let alone who is right) precisely because one always has to compromise in the end. But if one does not know what is right to satisfy the specifications and boundary conditions, one cannot distinguish between the right compromise and the wrong compromise—and will end up by making the wrong compromise. "

" For there are two different kinds of compromise. One kind is expressed in the old proverb: “Half a loaf is better than no bread.” The other kind is expressed in the story of the Judgment of Solomon, which was clearly based on the realization that “half a baby is worse than no baby at all.” In the first instance, the boundary conditions are still being satisfied. "

" It is fruitless and a waste of time to worry about what is acceptable and what one had better not say so as not to evoke resistance. The things one worries about never happen. And objections and difficulties no one thought about suddenly turn out to be almost insurmountable obstacles. One gains nothing in other words by starting out with the question: “What is acceptable?” And in the process of answering it, one gives away the important things, as a rule, and loses any chance to come up with an effective, let alone with the right, answer. "

Step 4: converting the decision into action

" 4. Converting the decision into action is the fourth major element in the decision process. While thinking through the boundary conditions is the most difficult step in decision-making, converting the decision into effective action is usually the most time-consuming one. Yet a decision will not become effective unless the action commitments have been built into the decision from the start.

In fact, no decision has been made unless carrying it out in specific steps has become someone’s work assignment and responsibility. Until then, there are only good intentions.

... Converting a decision into action requires answering several distinct questions: Who has to know of this decision? What action has to be taken? Who is to take it? And what does the action have to be so that the people who have to do it can do it? The first and the last of these are too often overlooked—with dire results. ...The action must also be appropriate to the capacities of the people who have to carry it out. ...think what action commitments a specific decision requires, what work assignments follow from it, and what people are available to carry it out. "

examples of decisions with no action committments

"• This is the trouble with so many policy statements, especially of business: They contain no action commitment. To carry them out is no one’s specific work and responsibility. No wonder that the people in the organization tend to view these statements cynically if not as declarations of what top management is really not going to do. "

examples of decisions with no who

" • A story that has become a legend among operations researchers illustrates the importance of the question “Who has to know?” A major manufacturer of industrial equipment decided several years ago to discontinue one model. For years it had been standard equipment on a line of machine tools, many of which were still in use. It was decided, therefore, to sell the model to present owners of the old equipment for another three years as a replacement, and then to stop making and selling it. Orders for this particular model had been going down for a good many years. But they shot up as former customers reordered against the day when the model would no longer be available. No one had, however, asked, “Who needs to know of this decision?” Therefore nobody informed the clerk in the purchasing department who was in charge of buying the parts from which the model itself was being assembled. His instructions were to buy parts in a given ratio to current sales—and the instructions remained unchanged. When the time came to discontinue further production of the model, the company had in its warehouse enough parts for another eight to ten years of production, parts that had to be written off at a considerable loss. "

must change incentives to match decision

" All this becomes doubly important when people have to change behavior, habits, or attitudes if a decision is to become effective action. Here one has to make sure not only that responsibility for the action is clearly assigned and that the people responsible are capable of doing the needful. One has to make sure that their measurements, their standards for accomplishment, and their incentives are changed simultaneously. Otherwise, the people will get caught in a paralyzing internal emotional conflict.

examples of changing or failing to chaneg incentives

• 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.

• In sharp contrast is the recent failure of a brilliant chairman and chief executive to make effective a new organization structure and new objectives in an old, large, and proud American company. Everyone agreed that the changes were needed. The company, after many years as leader of its industry, showed definite signs of aging; in almost all major fields newer, smaller, and more aggressive competitors were outflanking it. But to gain acceptance for the new ideas, the chairman promoted the most prominent spokesmen of the old school into the most visible and best-paid positions— especially into three new executive vice-presidencies. This meant only one thing to the people in the company: “They don’t really mean it.”

If the greatest rewards are given for behavior contrary to that which the new course of action requires, then everyone will conclude that this contrary behavior is what the people at the top really want and are going to reward. "

Step 5: feedback

" 5. Finally, a feedback has to be built into the decision to provide a continuous testing, against actual events, of the expectations that underlie the decision. "

why feedback

" Decisions are made by men. Men are fallible; at their best their works do not last long. Even the best decision has a high probability of being wrong. Even the most effective one eventually becomes obsolete. ....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. "

" With the coming of the computer this will become even more important, for the decision-maker will, in all likelihood, be even further removed from the scene of action "

get feedback from a source other than the person carrying out the decision

" When General Eisenhower was elected president, his predecessor, Harry S. Truman, said: “Poor Ike; when he was a general, he gave an order and it was carried out. Now he is going to sit in that big office and he’ll give an order and not a damn thing is going to happen.” The reason why “not a damn thing is going to happen” is, however, not that generals have more authority than presidents. It is that military organizations learned long ago that futility is the lot of most orders and organized the feedback to check on the execution of the order. They learned long ago that to go oneself and look is the only reliable feedback.* Reports—all a president is normally able to mobilize—are not much help. 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.

• This is the reason why a battalion commander is expected to go out and taste the food served his men. He could, of course, read the menus and order this or that item to be brought in to him. But no; he is expected to go into the mess hall and take his sample of the food from the same kettle that serves the enlisted men. "

chapter 7: Effective Decisions

usually no clear answer

" A decision is a judgment. It is a choice between alternatives. It is rarely a choice between right and wrong. It is at best a choice between “almost right” and “probably wrong”—but much more often a choice between two courses of action neither of which is provably more nearly right than the other. "

undisputed facts are usually unavailable; decisions start with opinions

Most books on decision-making tell the reader: “First find the facts.” But ... one does not start with facts. One starts with opinions. These are, of course, nothing but untested hypotheses and, as such, worthless unless tested against reality. To determine what is a fact requires first a decision on the criteria of relevance, especially on the appropriate measurement. This is the hinge of the effective decision, and usually its most controversial aspect.

"the effective decision does not ... 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. "

"people do not start out with the search for facts. They start out with an opinion. There is nothing wrong with this. People experienced in an area should be expected to have an opinion.... to ask them to search for the facts first is even undesirable. 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. And no one has ever failed to find the facts he is looking for. The good statistician knows this and distrusts all figures—he either knows the fellow who found them or he does not know him; in either case he is suspicious.

The only rigorous method, the only one that enables us to test an opinion against reality, is based on the clear recognition that opinions come first—and that this is the way it should be. Then no one can fail to see that we start out with untested hypotheses—in decision-making as in science the only starting point. We know what to do with hypotheses—one does not argue them; one tests them. One finds out which hypotheses are tenable, and therefore worthy of serious consideration, and which are eliminated by the first test against observable experience. "

test opinions by experiment after the decision

" 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. "

think carefully about what to measure

" Perhaps the crucial question here is: “What is the criterion of relevance?”

The effective decision-maker assumes that the traditional measurement is not the right measurement. Otherwise, there would generally be no need for a decision; a simple adjustment would do. The traditional measurement reflects yesterday’s decision. That there is need for a new one normally indicates that the measurement is no longer relevant. "

go out and look for yourself

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

• In most personnel matters, for instance, events are measured in “averages,” such as the average number of lost-time accidents per hundred employees, the average percentage of absenteeism in the whole work force, or the average illness rate per hundred. But the executive who goes out and looks for himself will soon find that he needs a different measurement. The averages serve the purposes of the insurance company, but they are meaningless, indeed misleading, for personnel management decisions.

The great majority of all accidents occur in one or two places in the plant. The great bulk of absenteeism is in one department. Even illness resulting in absence from work, we now know, is not distributed as an average, but is concentrated in a very small part of the work force, e.g., young unmarried women. The personnel actions to which dependence on the averages will lead—for instance, the typical plantwide safety campaign—will not produce the desired results, may indeed make things worse.

Similarly, failure to go and look was a major factor in the failure of the automobile industry to realize in time the need for safety engineering of the car. The automobile companies measured only by the conventional averages of number of accidents per passenger mile or per car. Had they gone out and looked, they would have seen the need to measure also the severity of bodily injuries resulting from accidents. And this would soon have highlighted the need to supplement their safety campaigns by measures aimed at making the accident less dangerous; that is, by automotive design.

Finding the appropriate measurement is thus not a mathematical exercise. It is a risk-taking judgment. "

consider alternative measurements

" Whenever one has to judge, one must have alternatives among which one can choose. A judgment in which one can only say “yes” or “no” is no judgment at all. Only if there are alternatives can one hope to get insight into what is truly at stake.

Effective executives therefore insist on alternatives of measurement—so that they can choose the one appropriate one.

• There are a number of measurements for a proposal on a capital investment. One of these focuses on the length of time it will take before the original investment has been earned back. Another one focuses on the rate of profitability expected from the investment. A third one focuses on the present value of the returns expected to result from the investment, and so on. The effective executive will not be content with any one of these conventional yardsticks, no matter how fervently his accounting department assures him that only one of them is “scientific.” He knows, if only from experience, that each of these analyses brings out a different aspect of the same capital investment decision. Until he has looked at each possible dimension of the decision, he cannot really know which of these ways of analyzing and measuring is appropriate to the specific capital decision before him. Much as it annoys the accountants, the effective executive will insist on having the same investment decision calculated in all three ways—so as to be able to say at the end: “This measurement is appropriate to this decision.” "

create disagreement

" 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.

• Alfred P. Sloan is reported to have said at a meeting of one of his top committees: “Gentlemen, I take it we are all in complete agreement on the decision here.” Everyone around the table nodded assent. “Then,” continued Mr. Sloan, “I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.”

Sloan was anything but an “intuitive” decision-maker. He always emphasized the need to test opinions against facts and the need to make absolutely sure that one did not start out with the conclusion and then look for the facts that would support it. But he knew that the right decision demands adequate disagreement.

... Washington, we know, hated conflicts and quarrels and wanted a united Cabinet. Yet he made quite sure of the necessary differences of opinion on important matters by asking both Hamilton and Jefferson for their opinions.

• The President who understood best the need for organized disagreement was probably Franklin D. Roosevelt. Whenever anything of importance came up, he would take aside one of his aides and say to him, “I want you to work on this for me—but keep it a secret.” (This made sure, as Roosevelt knew perfectly well, that everybody in Washington heard about it immediately.) Then Roosevelt would take aside a few other men, known to differ from the first and would give them the same assignment, again “in the strictest confidence.” As a result, he could be reasonably certain that all important aspects of every matter were being thought through and presented to him. He could be certain that he would not become the prisoner of somebody’s preconceived conclusions. "

why disagreement

seriously consider the other points of view

" The effective decision-maker does not start out with the assumption that one proposed course of action is right and that all others must be wrong. Nor does he start out with the assumption, “I am right and he is wrong.” He starts out with the commitment to find out why people disagree.

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.*

In a good law office, the beginner, fresh out of law school, is first assigned to drafting the strongest possible case for the other lawyer’s client.

... No matter how high his emotions run, no matter how certain he is that the other side is completely wrong and has no case at all, the executive who wants to make the right decision forces himself to see opposition as his means to think through the alternatives. He uses conflict of opinion as his tool to make sure all major aspects of an important matter are looked at carefully. "

consider the alternaitve of doing nothing

" 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 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.

At the opposite end there are those conditions in respect to which one can, without being unduly optimistic, expect that they will take care of themselves even if nothing is done. If the answer to the question “What will happen if we do nothing?” is “It will take care of itself,” one does not interfere. Nor does one interfere if the condition, while annoying, is of no importance and unlikely to make any difference anyhow.

• It is a rare executive who understands this. The controller who in a desperate financial crisis preaches cost reduction is seldom capable of leaving alone minor blemishes, elimination of which will achieve nothing. He may know, for instance, that the significant costs that are out of control are in the sales organization and in physical distribution. And he will work hard and brilliantly at getting them under control. But then he will discredit himself and the whole effort by making a big fuss about the “unnecessary” employment of two or three old employees in an otherwise efficient and well-run plant. And he will dismiss as immoral the argument that eliminating these few semipensioners will not make any difference anyhow. “Other people are making sacrifices,” he will argue, “Why should the plant people get away with inefficiency?”

When it is all over, the organization will forget fast that he saved the business. They will remember, though, his vendetta against the two or three poor devils in the plant— and rightly so. “De minimis non curat praetor” [The magistrate does not consider trifles] said the Roman law almost two thousand years ago—but many decision-makers still need to learn it. "

[note: rework disagrees; it says to make decisions. that alternative process for workplaces, i forgot its name, agrees; it says to postpone committment when possible (but to try things out immediately); but this "try things out" probably disagrees with Drucker about making decisions on the highest conceptual level, rather than always only making adaptations]

" 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. "

when to stop thinking about it and make the decision

" The decision is now ready to be made. The specifications have been thought through, the alternatives explored, the risks and gains weighed. Everything is known. Indeed, it is always reasonably clear by now what course of action must be taken. At this point the decision does indeed almost “make itself.”

And it is at this point that most decisions are lost. It becomes suddenly quite obvious that the decision is not going to be pleasant, is not going to be popular, is not going to be easy. It becomes clear that a decision requires courage as much as it requires judgment. .... 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?”. "

" But at the same time he will not rush into a decision unless he is sure he understands it. Like any reasonably experienced adult, he has learned to pay attention to what Socrates called his “daemon”: the inner voice, somewhere in the bowels, that whispers, “Take care.” Just because something is difficult, disagreeable, or frightening is no reason for not doing it if it is right. But one holds back—if only for a moment—if one finds oneself uneasy, perturbed, bothered without quite knowing why. “I always stop when things seem out of focus,” is the way one of the best decision-makers of my acquaintance puts it.

Nine times out of ten the uneasiness turns out to be over some silly detail. But the tenth time one suddenly realizes that one has overlooked the most important fact in the problem, has made an elementary blunder, or has misjudged altogether...

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.

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. "


" the computer will force executives to make, as true decisions, what are today mostly made as on-the-spot adaptations. It will convert a great many people who traditionally have reacted rather than acted into genuine executives and decision-makers.

... • A simple and a common area where the typical traditional manager acts by way of on-the-spot adaptation is the commonplace inventory and shipping decision. The typical district sales manager knows, albeit most inaccurately, that customer A usually runs his plant on a tight schedule and would be in real trouble if a promised delivery did not arrive on time. He knows also that customer B usually has adequate inventories of materials and supplies and can presumably manage to get by for a few days even if a delivery were late. He knows that customer C is already annoyed at his company and is only waiting for a pretext to shift his purchases to another supplier. He knows that he can get additional supplies of one item by asking for them as a special favor from this or that man in the plant back home, and so on. And on the basis of these experiences, the typical district sales manager adapts and adjusts as he goes along.

The computer knows none of these things. ... The moment a company tries to put inventory control on the computer, it realizes that it has to develop rules. It has to develop an inventory policy. As soon as it tackles this, it finds that the basic decisions in respect to inventory are not inventory decisions at all. They are highly risky business decisions. ... As a result, decision-making can no longer be confined to the very small group at the top. In one way or another almost every knowledge worker in an organization will either have to become a decision-maker himself or will at least have to be able to play an active, an intelligent, and an autonomous part in the decision-making process. What in the past had been a highly specialized function, discharged by a small and usually clearly defined organ—with the rest adapting within a mold of custom and usage—is rapidly becoming a normal if not an everyday task of every single unit in this new social institution, the large-scale knowledge organization. "

and this is great:

" The sooner operating managers learn to make decisions as genuine judgments on risk and uncertainty, the sooner we will overcome one of the basic weaknesses of large organization—the absence of any training and testing for the decision-making top positions. "

"The computer might also change one of the typical mistakes in decision-making. Traditionally we have tended to err toward treating generic situations as a series of unique events. Traditionally we have tended to doctor symptoms. The computer, however, can only handle generic situations—this is all logic is ever concerned with. Hence we may well in the future tend to err by handling the exceptional, the unique, as if it were a symptom of the generic. "

conclusion: effectiveness must be learned

" There is nothing exalted about being an effective executive. It is simply doing one’s job like thousands of others. There is little danger that anyone will compare this essay on training oneself to be an effective executive with, say, Kierkegaard’s great self-development tract, Training in Christianity. There are surely higher goals for a man’s life than to become an effective executive. But only because the goal is so modest can we hope at all to achieve it; that is, to have the large number of effective executives modern society and its organizations need. If we required saints, poets, or even first-rate scholars to staff our knowledge positions, the large-scale organization would simply be absurd and impossible. The needs of large-scale organization have to be satisfied by common people achieving uncommon performance. "

(bayle: note that despite having two chapters on decision-making, he never actually tells you specifically how to make the decision. This seems to be a special case of a general pattern in business advice. i haven't seen the pattern stated in full generality anywhere so i'll state it here. Decision-making methodologies, heuristics, and other advice you read or are told about how to do business, are not good at telling you an algorithm for actually making a decision, at least not in a startup. If you knew the various probabilities you could calculate it but in a startup you are inherently dealing with things that are qualitatively different from what you have dealt with beforesuch advice is usually too simplistic, so you lack the numerical inputs with which to calculate*.

This is often phrased as "when you see this, do that"* (or even just "do that"), but this phrasing is usually an oversimplification. Often you will find two different books, or even one book, giving contradictory advice for one situation. Instead, what these books are trying to give you is just a library of stories and metaphors that deal with frequently occuring patterns of events, and tell you what is likely to result if you make various choices, so that you don't fail to recognize stereotypical issues and opportunities that a more experienced businessperson would recognize. It will often be the case that more than one pattern will apply, and then you will have to make a decision, calling upon the library of stories to inform you as to what the likely consequences of each decision are. Even putting aside the uncertaintly*, the advice given may not tell you which set of likely consequences is more desirable in such a situation, so it is still up to you to choose your path.

A formalized, fully-specified strategy would be an algorithm for making such a choice. But informally, a strategy may be seen as a meta-narrative, a longer story in which you imagine the stories that you acquired through experience and advice to occur as chapters. You can then choose which set of likely consequences is more desirable by seeing which one seems to mesh better with the larger story. )

conclusion: effectiveness must be learned


Even more important is the social need for executive effectiveness. The cohesion and strength of our society depend increasingly on the integration of the psychological and social needs of the knowledge worker with the goals of organization and of industrial society.

The knowledge worker['s] .... psychological needs and personal values need to be satisfied in and through his work and position in the organization. He is considered and considers himself a professional. Yet he is an employee and under orders. He is beholden to a knowledge area, yet he has to subordinate the authority of knowledge to organizational objectives and goals. In a knowledge area there are no superiors or subordinates, there are only older and younger men. Yet organization requires a hierarchy. These are not entirely new problems, to be sure. Officer corps and civil service have known them for a long time, and have known how to resolve them. But they are real problems. The knowledge worker is not poverty-prone. He is in danger of alienation, to use the fashionable word for boredom, frustration, and silent despair.

Just as the economic conflict between the needs of the manual worker and the role of an expanding economy was the social question of the nineteenth century in the developing countries, so the position, function and fulfillment of the knowledge worker is the social question of the twentieth century in these countries now that they are developed.

It is not a question that will go away if we deny its existence. To assert (as do in their own way both orthodox economists and Marxists) that only the objective reality of economic and social performance exists will not make the problem go away. Nor, however, will the new romanticism of the social psychologists (e.g., Professor Chris Argyris at Yale) who quite rightly point out that organizational goals are not automatically individual fulfillment and therefrom conclude that we had better sweep them aside. We will have to satisfy both the objective needs of society for performance by the organization, and the needs of the person for achievement and fulfillment.

Self-development of the executive toward effectiveness is the only available answer. It is the only way in which organization goals and individual needs can come together. The executive who works at making strengths productive his own as well as those of others works at making organizational performance compatible with personal achievement. He works at making his knowledge area become organizational opportunity. And by focusing on contribution, he makes his own values become organization results. " -- Peter F Drucker, The Effective Executive


some stuff on management that i thought was wrongly interspersed into the other sections

how to supervise knowledge workers

" Since the knowledge worker directs himself, he must understand what achievement is expected of him and why. He must also understand the work of the people who have to use his knowledge output.... Wherever knowledge workers perform well in large organizations, senior executives take time out, on a regular schedule, to sit down with them, sometimes all the way down to green juniors, and ask: “What should we at the head of this organization know about your work? What do you want to tell me regarding this organization? Where do you see opportunities we do not exploit? Where do you see dangers to which we are still blind? And, all together, what do you want to know from me about the organization?”

...such a session takes a great deal of time, especially as it should be unhurried and relaxed. People must feel that “we have all the time in the world.” This actually means that one gets a great deal done fast. But it means also that one has to make available a good deal of time in one chunk and without too much interruption.

Mixing personal relations and work relations is time-consuming. If hurried, it turns into friction. Yet any organization rests on this mixture. The more people are together, the more time will their sheer interaction take, the less time will be available to them for work, accomplishment, and results. "

span of control

" ... one man can manage only a few people if these people have to come together in their own work.... On the other hand, managers of chain stores in different cities do not have to work with each other, so that any number could conceivably report to one regional vice-president without violating the principle of the “span of control.” "

personnel decisions should be made slowly and carefully

" ...Among the effective executives I have had occasion to observe, there have been people who make decisions fast, and people who make them rather slowly. But without exception, they make personnel decisions slowly and they make them several times before they really commit themselves.


People-decisions are time-consuming, for the simple reason that the Lord did not create people as “resources” for organization. They do not come in the proper size and shape for the tasks that have to be done in organization—and they cannot be machined down or recast for these tasks. People are always “almost fits” at best. To get the work done with people (and no other resource is available) therefore requires lots of time, thought, and judgment. "

leading by example: contribution

" An executive’s focus on contribution by itself is a powerful force in developing people. People adjust to the level of the demands made on them. The executive who sets his sights on contribution, raises the sights and standards of everyone with whom he works.

• A new hospital administrator, holding his first staff meeting, thought that a rather difficult matter had been settled to everyone’s satisfaction, when one of the participants suddenly asked: “Would this have satisfied Nurse Bryan?” At once the argument started all over and did not subside until a new and much more ambitious solution to the problem had been hammered out.

Nurse Bryan, the administrator learned, had been a long-serving nurse at the hospital. She was not particularly distinguished, had not in fact ever been a supervisor. But whenever a decision on patient care came up on her floor, Nurse Bryan would ask, “Are we doing the best we can do to help this patient?” Patients on Nurse Bryan’s floor did better and recovered faster. Gradually over the years, the whole hospital had learned to adopt what came to be known as “Nurse Bryan’s Rule”; had learned, in other words, to ask: “Are we really making the best contribution to the purpose of this hospital?”

Though Nurse Bryan herself had retired almost ten years earlier, the standards she had set still made demands on people who in terms of training and position were her superiors. "

example: a guy who decided his contribution would be developing managers

" ... he walked through the personnel department three times a week on his way back from lunch and picked up at random eight or ten file folders of young men in the supervisory group. Back in his office, he opened the first man’s folder, scanned it rapidly, and put through a telephone call to the man’s superior. “Mr. Robertson, this is the president in New York. You have on your staff a young man, Joe Jones. Didn’t you recommend six months ago that he be put in a job where he could acquire some merchandising experience? You did. Why haven’t you done anything about it?” And down would go the receiver.

The next folder opened, he would call another manager in another city: “Mr. Smith, this is the president in New York. I understand that you recommended a young man on your staff, Dick Roe, for a job in which he can learn something about store accounting. I just noticed that you have followed through with this recommendation, and I want to tell you how pleased I am to see you working at the development of our young people.” This man was in the president’s chair only a few years before he himself retired. But today, ten or fifteen years later, executives who never met him attribute to him, and with considerable justice, the tremendous growth and success of the company since his time.


the right human relations


Executives in an organization do not have good human relations because they have a “talent for people.” They have good human relations because they focus on contribution in their own work and in their relationships with others. As a result, their relationships are productive—and this is the only valid definition of “good human relations.” Warm feelings and pleasant words are meaningless, are indeed a false front for wretched attitudes, if there is no achievement in what is, after all, a work-focused and task-focused relationship. On the other hand, an occasional rough word will not disturb a relationship that produces results and accomplishments for all concerned. "


The focus on contribution by itself supplies the four basic requirements of effective human relations:


" We have been working at communications downward from management to the employees, from the superior to the subordinate. But communications are practically impossible if they are based on the downward relationship.... The harder the superior tries to say something to his subordinate, the more likely is it that the subordinate will mishear. He will hear what he expects to hear rather than what is being said.

But executives who take responsibility for contribution in their own work will as a rule demand that their subordinates take responsibility too. They will tend to ask their men: “What are the contributions for which this organization and I, your superior, should hold you accountable? What should we expect of you? What is the best utilization of your knowledge and your ability?” And then communication becomes possible, becomes indeed easy.

Once the subordinate has thought through what contribution should be expected of him, the superior has, of course, both the right and the responsibility to judge the validity of the proposed contribution. • According to all our experience, the objectives set by subordinates for themselves are almost never what the superior thought they should be... Who is right in such a difference is not as a rule important. For effective communication in meaningful terms has already been established. "


" The focus on contribution leads to communications sideways and thereby makes teamwork possible.

The question, “Who has to use my output for it to become effective?” immediately shows up the importance of people who are not in line of authority, either upward or downward, from and to the individual executive. "

" Communications within the knowledge work force is becoming critical as a result of the computer revolution in information. Throughout the ages the problem has always been how to get “communication” out of “information.” Because information had to be handled and transmitted by people, it was always distorted by communications; that is, by opinion, impression, comment, judgment, bias, and so on. Now suddenly we are in a situation in which information is largely impersonal and, therefore, without any communications content. It is pure information.

But now we have the problem of establishing the necessary minimum of communications so that we understand each other and can know each other’s needs, goals, perceptions, and ways of doing things. Information does not supply this. Only direct contact, whether by voice or by written word, can communicate.

The more we automate information-handling, the more we will have to create opportunities for effective communication. "


" 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?” "

" We know very little about self-development. But we do know one thing: If [people] demand little of themselves, they will remain stunted. If they demand a good deal of themselves, they will grow to giant stature—without any more effort than is expended by the nonachievers. "

development of others

" The executive who focuses on contribution also stimulates others to develop themselves "

bringing in new people

"An organization needs to bring in fresh people with fresh points of view fairly often. If it only promotes from within it soon becomes inbred and eventually sterile. But if at all possible, one does not bring in the newcomers where the risk is exorbitant—that is, into the top executive positions or into leadership of an important new activity. One brings them in just below the top and into an activity that is already defined and reasonably well understood. "

pattern language

Bring in fresh people

what: get people involved who weren't involved before

when: continuously




balance: the pro is much stronger than the cons. bring them on continuously, but slowly, and "if at all possible, one does not bring in the newcomers where the risk is exorbitant—that is, into the top executive positions or into leadership of an important new activity. One brings them in just below the top and into an activity that is already defined and reasonably well understood."


hmm writing that pattern was enlightening, but it's too long. much of that stuff everyone knows, that part should be left out.