An effective business executive is a doer who learns how to get the right things done to enhance organizational opportunity. According to Peter Drucker’s book The Effective Executive: The Definitive Guide to Getting the Right Things Done, the effectiveness of an executive’s “doing” rests on five essential practices: time management, choosing what to contribute to the business, knowing how to identify and mobilize everyone’s strengths (including the owner’s) for best results, setting the right priorities; and learning how to optimize and sequence decision-making for ideal impact.
Written in 1967, Drucker’s book is as applicable today as it was 54 years ago. His tenets of effective business management help us rein in and optimize our limited time, leverage human resources and knowledge, and weave effective habits together to create deliberate, informed and rational action.
“Intelligence, imagination and knowledge are essential resources,” Drucker says, “but only effectiveness converts them into results. By themselves, they only set limits to what can be attained.”
Drucker says that effectiveness is a habit, “a complex of practices. And practices can always be learned.” Below are some of the practices that stand out in this timeless business classic.
An effective executive should always focus on opportunities, treating change not as a threat, but as something that holds potential. An effective executive should always ask how they can exploit change as an opportunity for the business.
An effective executive should not let the daily flow of events be the determining factor in what they will work on or what they take seriously, or else they will fritter too much time away on “operating.”
An effective executive focuses on contributions towards outward goals. Drucker says that we must ask, “What can I contribute that will significantly affect the performance and the results of the institution I serve?” He points out that most business owners and managers focus downward, that is, they are more occupied with efforts rather than results. He says that if an executive doesn’t ask what they can contribute, they’re “aiming too low and probably at the wrong things.”
An effective executive has concentration; they do first things first and do one thing at a time. A farm business owner/manager has so many tasks to do and quite often they all seem equally important. That makes it imperative to identify which activities and tasks no longer deliver results so you don’t become inefficiently scattered and trapped in a cycle of unproductivity. You should always be asking “Is this still worth doing?” If the answer is no, Drucker says toss it out and focus on the few tasks that “if done with excellence, will really make a difference in the results of [your] job and the performance of [the] organization.” To figure out what to do first, and to correctly set the boundaries of the equation in relation to the executive making the decision and not according to the surrounding pressures, Drucker recommends setting posteriorities rather than priorities. Posteriorities are the tasks that do not need to be tackled immediately. Drucker further suggests the following rules for identifying priorities: pick the future against the past, focus on opportunity rather than on the problem, choose your own direction rather than climbing on the bandwagon, and aim high for something that will make a difference rather than something that is “safe” and easy to do.
An effective executive always asks (after asking “what needs to be done”), “Is this the right thing for the enterprise” — a particularly important question for family-owned or -run businesses. This question helps focus priority setting on the business goals rather than on individual goals and/or individual subjective preferences.
An effective executive makes decisions systematically with “clearly defined elements and in a distinct sequence of steps.” Decision-making structures should be based on generating impact rather than on technique, meaning that the process should include “clear specifications as to what the decision has to accomplish,” says Drucker. “[A] decision that does not satisfy the boundary conditions is ineffectual and inappropriate.”
“Effectiveness can be learned and must be learned,” says Drucker. “[It] is our one hope to make modern society productive economically and viable socially.”