Business

A Modern Summary of The Effective Executive by Peter Drucker

Ash Lal
December 21, 2020

The Effective Executive by Peter Drucker was originally published in 1966. Although the book offers timeless advice for productivity, today we have new tools that make it easier to implement. 

In this book summary, we'll review the most important tips from the book and provide suggestions for modern tools and frameworks that support its main principles.

We'll look at each chapter in turn and summarize the key points so you get all the main ideas in one actionable summary. 

Ready? Let's go. 

Chapter 1: Effectiveness Can Be Learned

According to Drucker, the effective executive is defined by practices rather than attributes. Therefore, he argues, effectiveness can be learned by practicing the 5 habits of effective executives: 

1) Know thy time. 

2) Focus on contribution.

3) Make strengths productive.

4) Put first things first. 

5) Take effective decisions. 

The rest of the book describes each of the habits and provides many valuable tips for productivity. Here, we'll try to extract the most important ones for today's working environment. 

Chapter 2: Know Thy Time

Drucker suggests a 3-step process to improve how you manage your time:

1) Record your time

2) Manage your time

3) Consolidate your time

Record

Effective executives don't start with planning. Instead, they first understand where their time goes. 

Drucker's advice is to keep a time log for at least 2 weeks and record everything you do in it. If you're not used to doing this, it may seem rigid and hard to execute (you might often forget to record a short activity like a 5-minute break). 

Fortunately, today we have tools like Toggl and Prodivy that make it much easier to track and understand where our time goes. My advice is to use Toggl for manually logging in your activities and Prodivy to monitor your web usage automatically in the background. 

Prodivy tracks your browser usage automatically so you don't have to start and stop a timer all the time.

You can go a step further and connect your calendar to analyze time spent in meetings and other events. 

Manage

Once you have enough data, say 2 weeks, you will notice patterns and time-wasters like email and social media that eat into your productivity. Drucker argues that removing distractions is the right thing to do now, instead of setting priorities for what you should be doing. 

In order to help with this, check out Block Site (for Chrome) and Forest (mobile app) to reduce time spent on distracting sites and apps.

Once you've taken the steps to minimize time-wasters, you can move to Drucker's third tip for improving your time management: 

Consolidate

Consolidation means you should group your remaining "discretionary" time to work on things that move the needle - in the largest possible chunks of time. 

This is usually between half a day and 2 weeks. According to Drucker, you need to minimize context switching and focus on one important task until it's done. 

He also provides a few tips for making this happen: 

  • Work from home once a day where you can't be distracted.
  • Batch smaller tasks like meetings and reviews on specific days of the week. 
  • Block off time on your calendar, such as mornings, to work on crucial projects. 

As you might have guessed - a well-structured calendar is your best tool here. I recommend Google Calendar because it's free and simple, but you can use anything that allows you to share your availability with colleagues and other stakeholders. 

Chapter 3: What Can I Contribute? 

Drucker suggests that effective executives focus on outward contribution rather than the work that can be done. He also provides a few guiding questions to help identify the crucial areas where you can contribute: 

  • What is the most important contribution I can make to the performance of this organization? 
  • 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? 

In effect, Drucker wants us to focus on results instead of internal issues and secondary tasks like "busy work". He outlines 3 important areas for any knowledge worker that should take up most of his or her time: 

  • The Meeting
  • The Report
  • The Presentation

The meeting

There are two key messages here: 

1) Minimize meetings as much as possible. 

2) Prepare for each meeting based on its purpose.

Drucker argues that too many meetings are a sign of overstaffing. As a rule, he suggests that meetings with co-workers should never occupy most of the executive's time. 

For the meetings that can't be avoided, preparation in advance is key. For example, if the purpose of a meeting is to agree on a quarterly plan, the draft plan must be distributed to all relevant people in advance. The meeting should serve to discuss any disagreements and have a clear outcome at the end. 

Some of the modern tools you can use to run effective meetings are Zoom and Miro

You're probably already familiar with Zoom as a video conferencing tool. Miro, on the other hand, gives you a virtual whiteboard that's super flexible and allows you to express ideas and collaborate both remotely and in-person.

The Report

The report describes a retrospective of some sort - such as results achieved or an analysis of available facts and their implication. 

If a report needs to be discussed in a meeting, you should distribute a copy in advance and set talking points to structure the discussion.

Nowadays there are great reporting tools at your disposal, including: 

  • Google Data Studio - to pull data from different tools and present it in a visual way.
  • Mixpanel - for web product analytics. 
  • Google Analytics - for web marketing analytics. 

The Presentation 

Presentations usually describe products, services, and future plans that need approval from multiple stakeholders. 

We won't go into much detail here but you have many modern options for creating presentations nowadays, including: 

  • Prezi - for a more visual alternative to PowerPoint/Google Slides. 
  • Future Present - if you need help creating great presentations. 

Chapter 4: Making Strength Productive

The key message here is utilizing strengths rather than fixing weaknesses. 

According to Drucker, strengths can make weaknesses irrelevant. On the other hand, focusing on fixing your weaknesses will make you mediocre at best. 


And this is not just on a personal level - you should aim to utilize the strengths of your peers, superiors, and the organization as a whole. 

Here, Drucker suggests a framework used by successful Japanese corporations. In this example, each member of the management group prepares 2 lists: one with opportunities and one with the best-performing people throughout the company. 

Then, they discuss the lists and match the best people with the most relevant opportunities. You can make this process easier with performance appraisal tools like Appreiz. This way, your organization can recognize top performers publicly, as measured by both peers and superiors. 

Another tip from Drucker is focusing on job design. If 2-3 consecutive employees fail in a given role, the duties and responsibilities should be reconsidered. He suggests every role should be big, demanding, and inspiring. 

Chapter 5: First Things First

This chapter is all about concentrating on the few things that are worth it. 

Drucker suggests you constantly question tasks and projects by asking: 

"Is this still worth doing?" 

And

"If we did not already do this, would we go into it now?" 

He argues that deciding what you should NOT do is more important than deciding what you should. 

He also suggests aiming high for things that make a difference, rather than safe and easy targets.

To help with putting first things first, there are two dominant frameworks you can use nowadays: 

1) OKRs

2) 4DX

OKRs stand for "Objectives and Key Results". You can read more about this framework here or watch the below video. 

4DX stands for The 4 Disciplines of Execution. It was introduced by FranklinCovey and you can see it as an alternative to OKRs. The principles are similar but you may find one or the other works better for your team. You can read more about 4DX here.  

A great way to digitally manage your team priorities is Workpath. This is a tool that supports both OKR and 4DX-style priorities so your whole organization is aligned about what's important. 

Workpath calls itself a "strategic operating system".


Chapter 6: The Elements of Decision-making

According to Drucker, effective executives make decisions using a process. Here are the elements of this process: 

1) Ask "Is this a generic situation or an exception?" Generic situations must be addressed using principles or rules. 

2) Set clear objectives about what the decision should accomplish. 

3) Start with what is right, not what is acceptable, based on the objectives you set.

4) Degenerate into action - decisions that don't turn into actions are "intentions" at best.

5) Build feedback into the decision - from facts, figures, and relevant stakeholders.

It's clear here that communication between stakeholders is essential. As Drucker says, “organizations are held together by information rather than by ownership or command”. 

If you want to improve your decision-making process, make sure to adopt modern communication tools like Slack, Twist, or Microsoft Teams to involve all relevant stakeholders.

Chapter 7: Effective Decisions

Furthermore on the subject of decision-making, Drucker suggests that decisions should only be made in light of disagreement. If everyone agrees or "doing nothing" leads to the same outcome, no decision should be made. 

It's important to understand that decisions are usually a choice between alternatives, not between right and wrong. This makes it easier to encourage new and differing opinions between stakeholders that, in turn, lead to better decisions. 

Nowadays, you can use tools like Slido to let people express their opinion and questions to stimulate the decision-making process. 

Conclusion: Effectiveness Must Be Learned

As a conclusion to this book, Drucker argues that effectiveness must be learned because the demand for it is much greater than the supply of talented individuals who are "born effective". 

In order to learn how to be effective, you should apply self-discipline in practicing the 5 habits: 

1) Record where your time goes and manage it systematically.

2) Constantly strive for outward contribution. 

3) Focus on strengths and opportunities rather than weaknesses and problems. 

4) Concentrate your efforts on the few but important things. 

5) Take effective decisions using a process that always leads to action. 

Key action points from this summary

The Effective Executive is full of golden advice that's still relevant today, more than 50 years after it was originally published. However, you might find it fragmented and outdated in certain areas. 

This summary is an attempt to synthesize the most important points and suggest modern tools to help you implement the principles from the book. 

If you want to make the most of it, below I've distilled the key actions you can take right now that will help you to immediately put the book into practice: 

  • Track your time with Prodivy and Toggl.
  • Remove distractions with Block Site and Forest.
  • Consolidate discretionary time on your calendar in large units of time, at least for this week.
  • Use Miro in your next virtual meeting.
  • Try Prezi for your next presentation. 
  • Read more about the OKRs and 4DX strategy frameworks. 
  • Recognize employees and allocate jobs using Appreiz
Ash Lal
Ash is the Founder and CEO of Prodivy. He was a Product Manager at a large technology firm before starting Prodivy.

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