Refining Management: How to Become an Effective Executive

Refining Management: How to Become an Effective Executive

Among the many works by the great management thinker Peter Drucker, The Practice of Management and The Effective Executive are the two books most worth revisiting from time to time. As their titles suggest, each has its own emphasis and they complement one another well. The former focuses more on principles and practices for managing people, work, and systems, aiming to articulate management principles that can be replicated in everyday practice. It is the kind of book one can keep on the desk and consult regularly. The latter places a higher-level demand on managers: it asks them to clearly understand their own condition and level of managerial competence, and on that basis continue to refine and improve themselves. For managers in mature organizations, The Practice of Management often serves more as a source of refinement and correction, while The Effective Executive sounds like a great bell, reminding managers to raise their standards and expectations of themselves in a serious and meaningful way.

At the very beginning of The Effective Executive, Drucker points out the special nature of managers as knowledge workers. He emphasizes that in a modern society led by knowledge, the role managers play is crucial. Yet because of the multiplicity of their time commitments and responsibilities, they are often unable to focus their energy on what truly matters or make decisions that are genuinely important. As a result, managerial efficiency declines and the overall level of management stagnates. This book offers a systematic response to those problems, and therefore has direct practical value for improving the effectiveness and efficiency of individual managers as well as organizations as a whole.

Drucker’s definition of a manager begins by distinguishing management from mere status or title. As he bluntly states in the book: “Many people are merely somebody else’s boss—even the boss of many people—but their behavior does not significantly affect the performance of the organization. Therefore, whether a knowledge worker is a manager cannot be determined by whether he has subordinates.” For all knowledge workers, whether they work independently or occupy any level within an organization, the situations they face share similar characteristics to varying degrees. In that sense, all of them need to engage in management. And the degree of managerial effectiveness directly affects the effectiveness of their work.

In Drucker’s view, the most important contribution of a truly effective executive lies in creating new thoughts, visions, and ideas. To do this, a manager must devote a great deal of energy and serious thinking. Yet the paradox of management is that most of a manager’s time is occupied by other people and other matters; routine and redundant tasks consume far too much of it. The time and space left for deep thinking are extremely limited. Therefore, if one wants to become an effective executive, managing limited time well is always the first priority. Without carving out meaningful time from routine work, effective management cannot even begin. Compared with today’s overwhelming number of books on time management, the time-management section of this book does not go very deeply into techniques or details; it provides more of an outline and guiding framework. But for managers, once this awareness is in place, it becomes easy enough to seek out and study books such as those on GTD (Getting Things Done) and put them into practice.

Besides time, decision-making is another matter managers must take especially seriously. Generally speaking, in a mature organization, managers do not need to make too many decisions too frequently. That is because once an effective set of rules is in place, most decisions can be made naturally through process rather than personal preference. Yet it is precisely the small number of issues that do require decisions that often carry crucial meaning and value for management. In the book, Drucker presents the important principle of “boundary conditions” in decision-making, along with the key aspects and steps that deserve attention—a characteristic practical strength of his writing.

In the other parts of The Effective Executive, much like in The Practice of Management, Drucker also offers effective ideas and measures for improvement in areas managers should value, such as hiring and communication. One could almost say that this book points out the direction and path toward becoming an effective executive. It deserves to be read repeatedly by every knowledge worker and put into practice as a companion to real work. And because management is such a deeply practical discipline, any theory can all too easily become a source of self-satisfied armchair talk if one is not careful, difficult to truly absorb or apply flexibly. Unlike the natural sciences, understanding a principle does not necessarily make a manager excellent overnight. Only through continuous learning combined with conscious training, practice, reflection, and improvement can one take the next step on the road toward becoming an effective executive.

Some excerpts from the book are below:

Generally speaking, managers tend to be intelligent, imaginative, and highly knowledgeable. But a person’s effectiveness has surprisingly little to do with intelligence, imagination, or knowledge. Talented people are often the least effective, because they fail to realize that talent itself is not achievement. They also do not understand that talent produces results only when it is directed through orderly and systematic work.

Many people are merely somebody else’s boss—even the boss of many people—but their behavior does not significantly affect the performance of the organization. Therefore, whether a knowledge worker is a manager cannot be determined by whether he has subordinates.

As a knowledge worker, he knows that his contribution lies in creating new thoughts, visions, and ideas. His guiding principle is: What can I contribute? How can I motivate others to contribute toward the overall objective? His goal is to improve overall performance. With computers, managers may become dismissive of information and stimuli that cannot be translated into computer logic and language. As a result, they may lose perceptiveness—the awareness of a situation—and focus only on facts, that is, the numbers that appear after events have already occurred. In this way, an abundance of computer-generated information may actually isolate them from reality. Record time, diagnose time, and optimize time.

There are many reasons why managers fail. A common one is that when taking on a new position, they cannot or will not change in order to meet the new role’s requirements. Because they succeeded in the past, they remain satisfied with their old methods, and failure becomes inevitable.

Managers who focus on contribution, both in their work and in their relationships with others, usually have good human relationships, and their work becomes effective as a result. Perhaps that is the true meaning of so-called “good human relations.” The four basic requirements of effective human relationships are: communication, teamwork, self-development, and developing others.

Effective executives know that it is hard to build something new, and that any new job is difficult at the start and bound to encounter obstacles. Before a new undertaking begins, there should already be ways to overcome the great difficulties that are likely to arise; otherwise, the seeds of failure are planted from the very beginning.

When deciding what should come first and what can be postponed, what matters most is not analysis but the courage to act. The following principles can help determine priorities, and each is closely related to courage: focus on the future rather than the past; focus on opportunities rather than problems; choose your own direction instead of following others blindly; aim high and seek innovation rather than safety and convenience.

Characteristics of decision-making:

1. One must understand the nature of the problem. If it is a recurring problem, it can only be solved by a decision that establishes a rule or principle.
2. One must identify the boundary conditions that any solution must satisfy.
3. One must carefully consider what the right solution is and what conditions it must meet, and only then consider the necessary compromises, adaptations, and concessions required for the decision to be accepted.
4. A decision must include the actions needed for implementation, so that it can be translated into practice.
5. During implementation, feedback must be taken seriously in order to verify the correctness of the decision.

A decision that does not satisfy the boundary conditions is certainly ineffective and inappropriate. Such a decision may even be more harmful than one based on the wrong boundary conditions.

Most books on decision-making say, “Collect the facts first.” But effective decision-makers know that the process often does not begin with collecting facts; it begins with their own judgments. Good decisions should be based on conflicting opinions, selecting from different perspectives and different judgments. Therefore, without differing views, there can be no real decision.

He knows the importance of improving communication and selectively gathering the information he truly needs. He understands that some things cannot be quantified, and that too much information leads to confusion and disorder.

One of the basic weaknesses of large organizations is that middle managers rarely have opportunities to practice decision-making, making it difficult for them to take on senior decision-making roles. The earlier operating managers learn to judge and decide under conditions of risk and uncertainty, the sooner this weakness can be overcome.

When choosing senior executives, he values outstanding performance and integrity of character. He keenly senses that selecting people for key positions is a profoundly difficult task. Effective executives also know that no one is free of mistakes forever. They understand that no one is perfect. Even the most capable people have weaknesses. What matters is what a person can do, not what he cannot do. They work to fully concentrate and apply people’s knowledge and strengths in order to achieve the organization’s goals.