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Synopsis

The Effective Executive is a management classic from the 1960s. Peter Drucker offers readers guidance on how to become an effective executive. As long as your decisions impact your team’s productivity, you are an executive. You do not need to be managing people to be an executive. Therefore, The Effective Executive is a book for anybody who wants to make more effective workplace decisions. Plus, encourage others to make better decisions.

About Peter Drucker

Peter Drucker was an Austrian-born American management consultant, educator, and author. He was a leader in the development of management education and is described as “the founder of modern management.” Drucker went to California in 1971, where he developed one of the country’s first executive MBA programs for working professionals at Claremont Graduate University. From 1971 until his death, he was the Clarke Professor of Social Science and Management at Claremont. Claremont Graduate University’s management school was named the Peter F. Drucker Graduate School of Management in his honor in 1987.

Chapter 1 – Effectiveness Can Be Learned

“Knowledge has to be improved, challenged, and increased constantly, or it vanishes.”

– Peter Drucker

Effectiveness is the key ingredient for obtaining results. Intelligence, imagination, and knowledge are all essential for success. However, you will not experience this success without effectiveness. In fact, without effectiveness, these features can limit what you can attain. Effectiveness relates to your ability to work on the ‘right’ ideas, and knowledge workers responsible for this effectiveness are called executives. Hence, Drucker highlights you do not need to manage people to be an executive. Instead, you simply need to contribute to tasks that can affect the organization’s results.

Knowledge work should be measured against results rather than quantity or costs. If one cannot increase the supply of a resource, one must increase its yield. Effectiveness is one of the most valuable tools for increasing yield. 

Drucker describes effectiveness as a habit. Hence, it is something you can learn and build into your life. Crucially, there are five habits of an effective executive:

  1. Understand where your time is going. Systematically manage this time so you can be more effective.
  2. Focus on how you can contribute to the surrounding tasks. Drucker describes this as an outward contribution.
  3. Build on the strengths you already possess. Also, understand the strengths of your contemporaries and complement these strengths.
  4. Prioritize the tasks that will have the most significant positive impact on your performance before considering any other tasks.
  5. Learn to make the right decisions at the right time.

Chapter 2 – Know Thy Time

Time is a significant limiting factor for an effective executive. Subsequently, effective executives start with their time rather than their tasks. Essentially, planning is never the first port-of-call for effective executives. Instead, an effective executive starts by considering where their time will be going.

You can start effectively managing your time by cutting back on demands on your time that are unproductive. To solve this problem, they choose to allocate their time to the largest possible continuous units. The author recommends a three-step process to start implementing effective time in your work.

Step 1 – Recording Time

The first step when seeking to adopt executive effectiveness is to record your time use. The simplest way of doing this is to use a time log. You should not log this time after completing the task, though. Instead, try to use real-time logs of your time. This will allow the time log to be more accurate and less reliant on your memory. This time log should effectively guide your time management.

Step 2 – Managing Time

Time management allows you to cull the activities you spend considerable time on that are nonproductive. If your company’s productivity would not change if you removed a specific activity, then you should eliminate this task. There will also be tasks that other people could do equally well or even better than you. With these tasks, delegate them to others so you can focus on the most critical tasks.

Several forms of mismanagement can lead to wasted time. Firstly, insufficient foresight can lead to previously wasted time being wasted again. Secondly, a workforce too large will increase the amount of time wasted interacting rather than working. Drucker explains that senior people spending more than one-tenth on human relations problems is a sign you are over-staffed. You should only have individuals in your team whose knowledge and skills are required for day-to-day work. Any extra work can be dealt with through short-term contracts. Thirdly, an excess of meetings will mean that work never gets done. Meetings are often associated with follow-up meetings and further discussions about the meeting. Hence, meetings should be an exception rather than a rule. Finally, poor communication facilitates malfunction in information. Therefore, Drucker suggests you are always well-prepared for a meeting. 

“The most important thing in communication is to hear what isn’t being said.”

– Peter Drucker

Step 3 – Consolidating Time

After effectively managing your time, you need to consolidate the time when you can be most productive. These time frames should be readily available and under the executive’s control. Drucker offers multiple tips for consolidating your discretionary time:

  • Work at home one day a week.
  • Schedule all operating work into two days a week. Then, set aside the mornings of the remaining days for major issues.
  • Schedule a daily work period at home in the morning.

Chapter 3 – What Can I Contribute?

For a company to be successful, it needs to perform well in three major areas. Firstly, the organization must obtain direct results. Many executives focus downward. Essentially, they are more occupied with effort rather than results. Hence, executives fall into the trap of worrying about what others owe them. Stressing downward authority will make you the subordinate. Secondly, the organization must effectively build values and their affirmation among the workforce. If your organization doesn’t stand for anything, then you are encouraging disorganization and paralysis. Finally, a willingness to build and develop people for the future. Your decisions today need to renew your human capital.

Human Relations

One way that effective executives harness the right human relations is through their contribution. Effective human relations is less to do with having a talent for people. Instead, it is more to do with focusing on their contributions to their own work and their work relationships. Drucker outlines four factors that characterize human relations.

  1. Communications – Subordinates are less likely to take in information if their superior is trying too hard to get the point across. In these instances, the subordinate will hear what they expect to hear rather than the reality. Instead, allow your subordinates to fill in the gaps and take responsibility.
  2. Teamwork – Focusing on contribution allows your communication to become horizontal rather than vertical. This makes teamwork far easier. 
  3. Self-development – Focusing on contribution will allow you to consider how you can improve. 
  4. Development of others – Executives who focus on contribution will encourage others to develop themselves. This is because effective executives set standards that demand excellence.

Effective Meetings

Even when you have maximized your time, meetings will remain a substantial portion of an effective executive’s work time. As an effective executive, you should understand what the purpose of the meeting should be. This purpose should be relayed to the staff before the meetings to prepare the workforce for a specific topic. Effective executives keep meetings structured and do not use this time as an opportunity to brainstorm alongside colleagues. You should conclude effective meetings by relating the meeting’s findings to the initial purpose of the meeting.

Chapter 4 – Making Strength Productive

Build on Strengths

Productivity and results cannot be built upon weaknesses. Therefore, effective executives have to make use of all available strengths. This includes the strengths of your associates and superiors. Strengths offer genuine opportunities and can make your team’s weaknesses irrelevant. Therefore, aim to maximize your team’s strengths rather than minimizing its weaknesses. Avoiding weakness will only leave you with mediocre results as the most successful often have strong weaknesses too. To be truly successful, you must become extremely strong in one area to the detriment of other less critical areas.

Effective Staffing

Generally, the most impactful effective executives build teams where they are not close to their immediate colleagues. You should be choosing your colleagues based on what they can do rather than their likes and dislikes. Drucker describes this as seeking performance rather than conformance. Despite this, you should not be hoping to find a genius for every position. Often this is impossible, and a better alternative is to make common people achieve uncommon performance. Therefore, as with oneself, you should be willing to accept colleagues with weaknesses. As long as they have strengths in the desirable areas, they are a satisfactory option for the job. Similarly, individuals who are consistently underperforming should be let go. You must be ruthless to maintain the effectiveness of your team.

Peter Drucker offers four rules for staffing with strength in mind:

  1. A job that has defeated two or three men in succession should be redesigned.
  2. Make all your organization’s jobs demanding.
  3. Hire individuals based on what they can do rather than what the job requires.
  4. Accept people’s weaknesses to harness their strengths.

As well as being accepting of those you staff, you must also be accepting of yourself. Try to be yourself within the workplace. Additionally, look at your own performance and identify patterns underlying success and failure. Double-down on the areas you have been performing well and delegate more of the work where you seem to fail.

Chapter 5 – First Things First

Effective executives concentrate on the most critical tasks first. Plus, they only do one thing at a time. Ask yourself, ‘If we did not already do this, would we go into it now’? If your answer to this question isn’t a clear yes, then you should quickly drop or delay this activity.

There will always be more productive tasks for tomorrow than time to do them. Additionally, there will always be more opportunities than there are capable people to grasp them. Therefore, you must learn how to prioritize so you can complete tasks that have the greatest impact. You need to prevent the pressures of work from choosing the tasks you prioritize and make the decision as an executive.

Peter Drucker does not recommend setting priorities, though. A more difficult, yet more rewarding, approach is to set posteriorities. Essentially, you should decide which tasks not to tackle. 

  • Pick the future as against the past.
  • Focus on opportunity rather than on the problem.
  • Choose your own direction rather than climbing on the bandwagon.
  • Aim high for something that will make a difference rather than being safe.

Chapter 6 – The Elements of Decision-Making

“Unless commitment is made, there are only promises and hopes; but no plans.”

– Peter Drucker

Effective executives attempt to make just a few essential decisions on the highest level of conceptual understanding.

Peter Drucker outlines five elements of an effective executive’s decision process:

  1. First, you must identify if the situation is common or a unique event. If the situation is familiar, you should be dealing with it based on a set of company rules or principles. 
  2. Decide what your decisions aim to accomplish. Additionally, consider the conditions your decisions have to satisfy to reach these outcomes. These conditions are called boundary conditions. The more concisely boundary conditions are defined, the more likely your decisions will be effective.
  3. You will often have to compromise when making decisions. Therefore, ensure you start the decision process by considering what is right rather than what is acceptable. Starting with what is right will allow you to identify the right and wrong compromise when it comes to it.
  4. Convert your decision to action by building commitments into your decision-making process.
  5. Incorporate feedback into your decision-making process. For example, Peter Drucker recommends continuous testing accompanied by reports and figures. 

Chapter 7 – Effective Decisions

A decision is always a choice between alternatives. Most people use opinions as their starting point. Therefore, they then ask them to search for facts as they will search for those supporting their opinion. As you have to adopt this approach, you should encourage opinions. Force those who voice an opinion to take responsibility for identifying the level of evidence required to support this claim. Then, factual findings should be searched to see if this level of evidence can be obtained.

As an effective executive, you should not make a decision if there has been no disagreement. Effective decisions are made when conflicting views have clashed, and the alternatives have been weighed up against each other. In this way, effective executives should never be intuitive decision-makers. On top of this, before making a decision, you should always question whether the decision is necessary. Sometimes the alternative, doing nothing, is a more viable option.


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