The first principle is that the effective executive (by which he means not only a CEO but anyone who is responsible for making decisions that in some way affect the organization) must manage his time. The purpose of the executive is to note outside trends and adapt his company to them, but unavoidably he will spend most of his time on internal matters. The only way to spend less time on internal (and unimportant to his task) matters is to record what time is spent doing things and ruthless prune away any tasks that cannot be done by someone else. Next, make sure that you have large chunks of time (not necessarily large quantities) to work on the important things and that you are uninterrupted during that time. One executive, for instance, scheduled 1.5 hour meetings because that was his attention span—he could get something accomplished but he didn’t waste time after his attention wandered.
The second principle is asking “what can I contribute?”. The purpose of everyone in the organization is to contribute something and the effective executive needs to ask what his contribution should be. What can he do to change the company in a way that will make it more successful? “Increase profits” does not qualify although focusing on efficient manufacturing, or low rates of return, or identifying talented managers might. Merely playing the job of CEO, expecting wield power and authority are ego boosters, not effectiveness.
The third principle is to use the peoples’ strengths and not worry about their weaknesses. Drucker observes that an organization can be more effective than one person because each person contributes their strength but does not contribute their weaknesses. So therefore, hire for strengths. Do not worry about a person’s weaknesses (unless it prevents them from using their strengths) as they are largely irrelevant. We all have our weaknesses and people with great strengths tend to have great weaknesses. Hiring for lack of weakness results in hiring mediocrity and does not take advantage of one of the main purposes of an organization.
The fourth principle is the process of decision making. The executive does not need to make many decisions, but he needs to make them at a high level. It is the executive’s job to determine whether a problem is a unique situation or a manifestation of a general trend. If it is the latter, and it is in more cases than we think, the executive must determine a principle for solving it. Drucker observed that too many decisions are made on the assumption that the problem is unique when it is really not. Drucker also argues that correct decisions cannot be made unless there are a multiplicity of viewpoints, for only then can one option be compared with the others and the correct option for the organization’s boundary conditions (i.e. requirements) be selected.
Drucker maintains a very clear understanding of the concepts of effectiveness and presents these to the reader with concise writing and pointed examples. The book, in fact, follows the outline of a good speech to the letter, except that the discussion of the material has more depth than the length of an oration will permit. The clarity of thought presented in The Effective Executive will, without doubt, impart much of Drucker’s concepts to the reader.
The book is clear, concise, with good examples. Each point is reinforced several times and expanded to convey a better idea of the area the topic covers. Although the book may possibly be boring for someone who has already understood the concepts, as Drucker points out, very few executives have learned the secret of being effective, so the first-time reader is almost certain to gain very key insights. And it is the insights that are important to the book—these are true insights, the sort that are easily put and yet perfectly applicable.