"The Effective Executive" Jude Wanniski January 2, 2002

Memo To: Fans, Browsers, Clients
From: Jude Wanniski
Re: Peter Drucker’s Seminal Book

In April of last year, I devoted a lesson at our Supply-Side University to “leadership.” I briefly mentioned and recommended a small book by Peter Drucker, which he wrote in 1966 from a collection of notes he had made for speeches he was giving to business people at the time. The Effective Executive is really the foundation of all Drucker’s later work as a management guru, and it applies to all forms of leadership. I’d given copies of it to some of my early clients, chief executive officers of Fortune 500 companies, and remember one of them telling me he found it so impressive that he put it on his calendar to re-read at the beginning of every new year. Defense Secretary Donald Rumsfeld, who was then ceo of G.D. Searle & Co., and one of my earliest clients, was not the fellow who decided to read it the first week of every January, as a refresher, but then Rumsfeld probably absorbed it all in one reading. There are only 174 pages of text, with small pages and easy-to-read type. Just the thing for a busy up-and-comer. Drucker, now in his early 90s, has since written a dozen big fat books that take considerable time to read, but they are all expansions or extensions of the same themes. Amazon has The Effective Executive in paperback for $12. As Drucker pointed out way back then, almost all white-collar workers in the modern knowledge world are in a sense executives and to be effective have to follow the same principles, five basic “habits of mind,” as he put it on page 23, the first chapter entitled “Effectiveness Can Be Learned”:

1. Effective executives know where their time goes. They work systematically at managing the little of their time that can be brought under their control.
2. Effective executives focus on outward contributions. They gear their efforts to results rather than work. They start out with the question, “What results are expected of me?” rather than the work to be done, let alone with its techniques and tools.
3. Effective executives build on strengths – their own strengths, the strengths of their superiors, colleagues, and subordinates; and on the strengths in the situation, that is, on what they can do. They do not build on weakness. They do not start out with the things they cannot do.
4. Effective executives concentrate on the few major areas where superior performance will produce outstanding results. They force themselves to set priorities and stay with their priority decisions. They know that they have no choice but to do first things first – and second things not at all. The alternative is to get nothing done.
5. Effective executives, finally, make effective decisions. They know that this is, above all, a matter of system – of the right steps in the right sequence. They know that an effective decision is always a judgment based on “dissenting opinions” rather than on a “consensus on the facts.” And they know that to make many decisions fast means to make the wrong decisions. What is needed are few, but fundamental, decisions. What is needed is the right strategy rather than razzle-dazzle tactics.

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Drucker devotes a chapter to each of the five points, with many examples of effective executives in business, politics and the military. One of my favorites is his description of how General George C. Marshall in the 1930s spotted a young major named Dwight Eisenhower who seemed to have great strengths as a team-builder and tactical planner. Marshall put Eisenhower into war planning, his weakness, and while Ike never became a strategist, his exposure to those with strengths in that area led him to concentrate on his strengths and defer to others who had gifts in strategic planning.

At the time I read the book in the late 1970s, when I decided to leave journalism and start my own business, I really did not know much about Ronald Reagan’s abilities as an executive. For a long time, I believed a good bit of the constant criticisms of his inability to stay awake during meetings and to ramble on when he got the chance, telling stories and jokes from his Hollywood days. Over time, I could see in him the qualities that Drucker described in this book, written at the time Reagan was first entering politics. Reagan was said to doze off in meetings, but instantly snapped to attention when the discussion was about taxes and economic policy or when “Star Wars,” the Strategic Defense Initiative was mentioned. Drucker would have to say a President who came into office with the economy in a shambles and the Communists on the move around the world, and left office with the economy booming and the USSR at death’s door, stuck to doing what he did best, and made the most of his time.