What Makes an Effective Executive? -2021

In June 2004, the magazine Havard Business Review - Latin America, published the article What makes an executive effective?.Efficient de Restaurants He has kept this article for years and today he wants to share it with his readers.

Cash title
Peter Ferdinand Drucker (Vienna, November 19, 1909-Claremont, November 11, 2005) was a business consultant and professor, Austrian writer, and career lawyer, considered the greatest philosopher of the administration (also known as management) of the twentieth century.

He was the author of more than 35 books, and his ideas were decisive in the creation of the Modern Corporation. Drucker wrote multiple world-renowned works on topics related to the management of organizations, information systems and the knowledge society, an area in which he is recognized as a father and mentor in conjunction with Fritz Machlup.

Drucker left in his works the mark of his great intelligence and his tireless activity. Today he is considered the father of management as a discipline and continues to be studied in the most prestigious business schools.


What Makes an Effective Executive?

An effective executive does not need to be a leader in the current sense of the term.

Harry Truman, for example, didn't have a shred of charisma, but he was one of the most effective heads of state in American history. During my 65-year career as a consultant, some of the best corporate and nonprofit CEOs I have ever worked with were not stereotypical leaders. They were very diverse in terms of personality, attitudes, values, strengths and weaknesses. They ranged from outgoing to lonely, from laid-back to controlling, from generous to easygoing.

What made them all effective is that they followed the same eight practices:

  • They asked what is there to do?
  • They asked what is good for the company?
  • They developed action plans.
  • They took responsibility for their strategic.
  • They took on the responsibility of communicating.
  • They focused on opportunities rather than problems.
  • They conducted productive meetings.
  • They thought and said "we" instead of "me".

The first two practices allowed them to obtain the knowledge they needed. The next four helped them turn that knowledge into effective action. The last two ensured that the entire organization felt responsible.

Get the knowledge you need

The first practice is to ask what to do. Note that the question is not “What do I want to do? Asking what to do and taking it seriously is critical to managerial success. If this question is not asked, even the most capable of executives are rendered useless.

When Truman assumed the presidency in 1945, he knew exactly what he wanted to do: complete the social and economic reforms of Roosevelt's New Deal, which had been postponed by World War II.

Yet as soon as he asked himself what to do, Truman realized that international relations had absolute priority. He organized his work day to begin with reports on international politics from the secretaries of state and defense. Thus, he became the most competent president in international affairs that the United States has ever had. It contained communism in both Europe and Asia and, with the Marshall Plan, spawned 50 years of global economic growth.

Similarly, when Jack Welch took over as CEO of General Electric, he realized that the intercontinental expansion he was trying to launch was not the right thing to do. It had to get rid of GE companies that, regardless of their profitability, could not be the first or second in their industries.

The answer to the question "What is there to do?" it almost always includes more than one urgent task. But effective executives don't fragment. If possible, focus on a single task. If they are one of those people who work best with a change of pace in their workday - a significant minority - they undertake two tasks. But I've never met an executive who tackles more than two tasks at a time and is still effective. Therefore, after wondering what to do, the effective executive sets priorities and sticks to them.

For a CEO, the priority task may be to redefine the mission of the company. For a unit director it may be to redefine the relationship of his division with the parent company. The other tasks, regardless of their importance and attractiveness, are postponed. But after completing that first priority task, the executive redefines the priorities instead of going to number two on the original list. It asks the question "What should be done now?" This generally leads to new and different priorities.

We will mention again the best known CEO in the United States. According to his autobiography, every five years Jack Welch asked himself "What is there to do now?" And each time he came across a new and different priority.

But before deciding where to focus his efforts for the next five years, Welch reflected on another topic as well. He wondered which of the first two or three tasks on the list he was best suited for. Then he would focus on that task and delegate the others. Effective executives try to focus on jobs they do especially well. They know that companies perform well if top management performs well, and the same is true the other way around.

The second practice of effective executives, which is as important as the first, is to ask, "Is this the right thing to do for the company?" They don't ask if it's right for the owners, for the stock price, for the employees or the executives. Of course, they know that shareholders, employees, and executives are important players who must support a decision, or at least accept it, if they are to be effective.

They know that the price of the stock is not only relevant to shareholders, but also to the company, since the price-earnings ratio determines the cost of equity. But they also know that a decision that is not right for the company will ultimately not be right for any of the stakeholders.

This second practice is especially important for executives of family-owned or family-run companies - which are the majority of companies in all countries - especially when making decisions about people. In a successful family business, one family member is promoted only if, in measurable terms, it is better than all employees at the same level.

At DuPont, for example, when the company was still run as a family business, all the top executives (except the controller and the attorney) were part of the owning family. Every male descendant of the founders was entitled to an entry-level job in the company. After that, a family member was only promoted if a jury consisting mainly of executives from outside the family judged that person to be better, in skill and performance, than other employees of the same level.

The same rule applied for a century at the British family business J. Lyons & Company, now part of a major conglomerate, when it dominated Britain's food and hospitality industry.

Wonder "What is the right thing for the company?" it does not guarantee that the correct decision will be made. Even the brightest of executives is human, therefore prone to error and prejudice. But not asking the question virtually guarantees a wrong decision.

Write an action plan

Executives do things, they execute. For them, knowledge is useless until it has been translated into action. But before taking action, the executive must draw up his plan. You need to think about your desired results, possible restrictions, future reviews, points to consider, and consequences for how you will use your time.

First, the executive defines the desired results by asking, “What contributions should the company expect from me in the next 18 to 24 months? What results can you commit me to? With what deadlines? Then he considers the limits to his actions: “Is this line of action ethical? Is it acceptable within the organization? Is it legal? Is it compatible with the mission, values ​​and policies of the organization? ”. Positive responses to these

questions do not guarantee effective action. But violating these limits will certainly lead to wrong and ineffective action. The action plan is a statement of intent rather than a commitment. It must not become a straitjacket.

It must be reviewed many times, because all success, and all failure, create new opportunities. The same happens with changes in the environment of the company, the market and especially in the people within the company. All of those changes require the plan to be revised. A written plan should anticipate the need for flexibility.

In addition, the action plan needs to create a system for control results based on expectations. Effective executives often include two such controls in their action plans. The first check is done halfway through the plan, for example, at nine months. The second takes place at the end, before drawing up the next plan of action.

Finally, the action plan should serve as the basis for the administration of the executive's time. Time is an executive's scarcest and most valuable resource. And organizations - be they state agencies, businesses, or nonprofits - are inherently time wasters. The action plan will be useless if it does not allow you to determine how the executive will use his time.

Napoleon supposedly said that no successful battle ever followed the original plan. Yet Napoleon meticulously planned each of his battles, far more than any general before him. Without a plan of action, an executive becomes a prisoner of events. And without control elements to reexamine the plan as events unfold, the executive has no way of knowing which events are really important and which are just a smokescreen.

Act

When translating their plans into action, executives must pay close attention to decision-making, communication, opportunities (rather than problems), and meetings. I will consider these aspects one by one.

Take responsibility for decisions. A decision is not made as long as people do not know:

  • the name of the person in charge of carrying it out;
  • the term;
  • the names of the people who will be affected by the decision, and who, therefore, should be aware of it, understand it and accept it - or at least not be too opposed to it - and
  • the name of the people who should be informed of the decision, even if they are not directly affected.

An enormous number of organizational decisions turn into problems because they do not consider these principles. I had a client 30 years ago who lost his leadership position in the Japanese market, which was growing at a rapid rate.

After deciding to do a joint venture with a new Japanese partner, the company never made it clear who would inform the purchasing agents that the partner had made its specification in meters and kilos, rather than feet and pounds, and no one ever transmitted that specification. information.

Periodically reviewing decisions - at a pre-established time - is as important as taking them carefully at the beginning. Thus, a bad decision can be corrected before it does real damage. These reviews can consider everything from the results to the assumptions that support the decision.

Such a review is especially important for the most relevant and difficult decisions, those related to hiring or promotion. Studies of decisions about people show that only a third of these decisions are truly successful. One-third are likely to be neither a total success nor a total failure. And a third are simply failures.

Effective executives know this and review (six to nine months later) the results of the decisions they made about people. If they find that a decision has not had the expected results, they do not conclude that that person has been unproductive. Instead they conclude that they made a mistake themselves. In a well-run company, it is understood that if a person does poorly in a new job, especially after a promotion, they are not necessarily responsible for it.

Executives also owe it to the organization and its employees not to allow unproductive people in important positions. The employee may not be held responsible for his poor performance, but he must still be removed. If a person has done badly in a new position, they should have the option of returning to a job and a salary similar to what they had before.

But this option is rarely carried out. These people often leave voluntarily, at least if their employers are US companies. But the very existence of this possibility can have a powerful effect, encouraging people to leave a safe and comfortable job to take on new and risky tasks. The performance of the organization depends on the willingness of employees to take advantage of possibilities like these.

A systematic review of decisions can also be a great tool for personal development. Reviewing the results of a decision against expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information. It shows them their biases.

Often times it shows them that their decisions didn't pay off because they didn't pick the right people for the job. Assigning the best people to the right positions is a crucial but difficult task that many executives neglect, in part, because the best people are always busy.

Systematic review of decisions also shows executives their own weaknesses, especially the areas in which they are simply incompetent. Smart executives don't make decisions or act in those areas. What they do is delegate. We all have those areas. The executive who is a genius in everything does not exist.

Many of the debates around decision-making assume that only top executives make decisions, or that only the decisions of top executives matter. This is a dangerous mistake.

Decisions are made at all levels of the organization, starting with external professionals who contribute to the company and front-line supervisors. These seemingly low-level decisions are extremely important in a knowledge-based organization.

Knowledge workers are supposed to know more about their specialty - tax accounting, for example - and therefore their decisions are likely to affect the entire organization. Making good decisions is a key skill at all levels. In knowledge-based organizations this must be explicitly taught to everyone in the world.

Take responsibility for communicating. Effective executives ensure that both their action plans and information needs are understood. Specifically, this means that they share their plans with all their colleagues - superiors, subordinates, and peers - and ask them for feedback.

At the same time, they point out to each person what information they will need to do the job. It is the flow of information from subordinate to boss that generally attracts the most attention. But executives need to pay equal attention to the information needs of their peers and superiors.

We all know, thanks to the Chester Barnard classic The functions of the executiveof 1938, that organizations are held together by information rather than ownership or command. Still, too many executives act as if the information and its flow are being handled by an information specialist, such as the accountant.

As a result, they receive an enormous amount of data that they do not need or cannot use, but little of the information that they do need. The best way to deal with this problem is for each executive to determine the information they need, ask for it, and keep pushing until they get it.

Focus on the opportunities. Good executives focus on opportunities rather than problems. Of course there are problems to be faced, they should not be ignored. But troubleshooting, while necessary, does not produce results, but rather prevents damage. Taking advantage of opportunities does produce results.

First of all, effective executives view change as an opportunity rather than a threat. They systematically observe changes, inside and outside the company, and ask, "How can we take advantage of this change to make it an opportunity for our company?" Specifically, executives examine these seven situations for opportunities:

  • an unexpected success or failure in the company, a competitor or the industry;
  • a gap between what is done and what could be done in a process, product, service or market (for example, in the 19th century the paper industry used 10% of every tree that could be transformed into paper pulp, and totally ignored the chances of the remaining 90%, which was discarded);
  • an innovation in a process, product or service, whether inside or outside the company or the sector;
  • changes in the structure of the sector and the market;
  • demographic data;
  • changes in mental disposition, values, perception, moods or meaning, and
  • new knowledge or a new technology.

Effective executives also make sure that problems don't drown out opportunities. In most companies, the first page of the monthly management report contains the list of key problems. It is much more sensible to show the list of opportunities on the first page and leave the problems for the second. Unless there is a real catastrophe, problems are not addressed in management meetings until the opportunities have been properly discussed and addressed.

Staffing is another important aspect of the executive targeting opportunities. Effective executives assign their best people to opportunities, not problems. One way to staff based on opportunities is to ask your leadership group members to prepare two lists each semester: one of opportunities for the entire company and one of the top performers in the company. The lists are analyzed and then merged into two main lists, in order to match the best people with the best opportunities.

In Japan, by the way, this task is considered one of the main functions of the human resources area in large corporations or government agencies. This practice is one of the key strengths of Japanese companies.

Make meetings productive. The most visible, powerful, and effective nongovernmental executive in the United States of World War II and the years after was not a businessman.

It was Cardinal Francis Spellman, the head of the Catholic Archdiocese of New York and an advisor to several US presidents. When Spellman took office, the diocese was bankrupt and totally demoralized. His successor, instead, inherited the leadership position in the Catholic Church in the United States. Spellman used to say that during the day he was alone only twice: the 25 minutes that he prayed when he got up each morning, and the 25 minutes that he prayed before going to bed.

The rest of the time was spent surrounded by people in meetings, beginning with a breakfast with a Catholic organization and ending with a dinner with another organization.

Top executives are not as trapped as the archbishop of a major Catholic diocese. But all studies of executive working hours show that even lower-level executives and professionals spend more than half of the day with other people, that is, in some kind of meeting. The only exceptions are a few high-level researchers. Even a conversation with one person is already a meeting. Therefore, if they want to be effective, executives must conduct productive meetings. They should make sure that the meetings are work sessions and not chat rooms.

The key to conducting an effective meeting is to define in advance what type of meeting will be held. Different types of meeting require different forms of preparation and different results:

A meeting to prepare a statement, announcement, or press release. For this meeting to be productive, a participant must have previously prepared a draft. At the end of the meeting, a pre-designated participant should assume responsibility for releasing the final text.

A meeting to announce something, for example, an organizational change. This meeting should be limited to the announcement and a discussion around it.

A meeting in which a participant presents a report. Nothing else should be covered except the report itself.

A meeting in which several or all members present a report. Either there is no discussion, or the discussion should be limited to clarifying questions. An alternative is for each report to have a short discussion in which all participants can ask questions. If so, the reports should be distributed to all participants well in advance. In this type of meeting, each report should be limited to a certain time, for example, 15 minutes.

A meeting to inform the calling executive. The executive must listen and ask questions. You should then summarize the session, but not make a presentation.

A meeting whose sole function is to place the participants in the presence of the executive. Cardinal Spellman's breakfast or dinner meetings were of this type. There is no way to make these meetings productive. They are the perks of the trade. Senior executives are effective as they manage to prevent these meetings from interfering with their workday. Spellman, for example, was effective because it limited these meetings to breakfast or dinner, freeing up the rest of the day.

Running a productive meeting takes a lot of self-discipline. Executives are required to determine what type of meeting is appropriate and then stick to that format. It is also necessary to end the meeting as soon as its specific purpose has been fulfilled. Good executives don't raise another topic for debate. Summary and cancel the session.

Good follow-up is just as important as the meeting itself. The great master of tracking was Alfred Sloan, the most effective executive I have ever met. Sloan, who ran General Motors from the 20s to the 50s, spent most of his six-business-day week in meetings: three days in formal committee meetings with a set group of participants, the other three days in ad hoc meetings. to discuss speci fi c topics with individual GM executives or a small group of executives.

At the beginning of a formal meeting, Sloan announced the purpose of the meeting. Then he listened. He never took notes and rarely spoke, except to clear up a confusing point. At the end he summarized, thanked the participants and left. He would then write a short memo addressed to one of the participants.

There he would summarize the session and its conclusions and clearly explain any tasks that had been decided at the meeting (including a decision to hold another meeting on the topic or to discuss any matter). It specified who would be the executive responsible for that work and the deadline for doing it. He sent a copy of the memo to everyone who had attended the meeting. With these memos, which were little masterpieces, Sloan became an extremely effective executive.

Effective executives know that a meeting is either productive or a total waste of time.

Think and say "we"

The last practice is this: Don't think or say "I"; think and say "we". Effective executives know that they have ultimate responsibility, and that it cannot be shared or delegated. But they only have authority because they have the trust of the organization. This means that they think about the organization's needs and opportunities before they think about their own needs and opportunities. This may sound simple, but it is not and must be strictly followed.

We just reviewed Eight Practices of Effective Executives. I'm going to add one last, one additional practice. It is so important that I will elevate it to the category of rule: Listen first, speak last.

Among effective executives there are great differences in personality, strengths, weaknesses, values ​​and convictions. What they have in common is that they manage to do the right thing. Some were born effective. But there is too much demand to satisfy it with extraordinary talent. Efficacy is a discipline. And like all discipline, it can be learned and must be earned.

I am a dreamer and in my dreams I believe that a better world is possible, that no one knows more than anyone, we all learn from everyone. I love gastronomy, numbers, teaching and sharing all the little I know, because by sharing I also learn. "Let's all go together from foundation to success"
effective executive
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