Develop action plans.

Develop action plans.

General ManaGeMent

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On Leadership

If you read nothing else on leadership, read these 10 articles. We’ve combed through hundreds of Harvard Business Review articles on leadership and selected the most important ones to help you maximize your own and your organization’s performance.

This book will inspire you to: • Motivate others to excel • Build your team’s self-confidence • Provoke positive change • Set direction • Encourage smart risk-taking • Manage with tough empathy • Credit others for your success • Increase self-awareness • Draw strength from adversity

On Leadership If you read nothing else on leadership, read these definitive articles from Harvard Business Review.

Go from being a good manager to being an extraordinary leader.

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Other books you may be interested in: Harvard Business Review on Building Better Teams

Harvard Business Review on Communicating Effectively

Harvard Business Review on Increasing Customer Loyalty

Harvard Business Review on Making Smart Decisions

Harvard Business Review on Winning Negotiations

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HBR’s 10 Must Reads paperback series is the definitive collection of books for new and experienced leaders alike. leaders looking for the inspiration that big ideas provide, to accelerate both their own growth and that of their companies, should look no further.

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FEATURING “ What Makes an effective executive”

By Peter F. Drucker

US$24.95 / CAN$27.50

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A What Makes an Effective Executive by Peter F. Drucker

AN EFFECTIVE EXECUTIVE DOES NOT need to be a leader in the sense that the term is now most commonly used. Harry Truman did not have one ounce of charisma, for example, yet he was among the most effective chief executives in U.S. history. Similarly, some of the best business and nonprofit CEOs I’ve worked with over a 65-year consulting career were not stereotypical leaders. They were all over the map in terms of their personalities, attitudes, values, strengths, and weaknesses. They ranged from extroverted to nearly reclusive, from easygoing to controlling, from generous to parsimonious.

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

• They asked, “What needs to be done?”

• They asked, “What is right for the enterprise?”

• They developed action plans.

• They took responsibility for decisions.

• They took responsibility for communicating.

• They were focused on opportunities rather than problems.

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• They ran productive meetings.

• They thought and said “we” rather than “I.”

The first two practices gave them the knowledge they needed. The next four helped them convert this knowledge into effective action. The last two ensured that the whole organization felt respon- sible and accountable.

Get the Knowledge You Need

The first practice is to ask what needs to be done. Note that the ques- tion is not “What do I want to do?” Asking what has to be done, and taking the question seriously, is crucial for managerial success. Failure to ask this question will render even the ablest executive ineffectual.

When Truman became president in 1945, he knew exactly what he wanted to do: complete the economic and social reforms of Roo- sevelt’s New Deal, which had been deferred by World War II. As soon as he asked what needed to be done, though, Truman realized that foreign affairs had absolute priority. He organized his working day so that it began with tutorials on foreign policy by the secretaries of state and defense. As a result, he became the most effective presi- dent in foreign affairs the United States has ever known. He con- tained Communism in both Europe and Asia and, with the Marshall Plan, triggered 50 years of worldwide economic growth.

Similarly, Jack Welch realized that what needed to be done at General Electric when he took over as chief executive was not the overseas expansion he wanted to launch. It was getting rid of GE businesses that, no matter how profitable, could not be number one or number two in their industries.

The answer to the question “What needs to be done?” almost al- ways contains more than one urgent task. But effective executives do not splinter themselves. They concentrate on one task if at all possi- ble. If they are among those people—a sizable minority—who work best with a change of pace in their working day, they pick two tasks. I have never encountered an executive who remains effective while tackling more than two tasks at a time. Hence, after asking what

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WHAT MAKES AN EFFECTIVE EXECUTIVE

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Idea in Brief Worried that you’re not a born leader? That you lack charisma, the right talents, or some other secret ingredient? No need: lead- ership isn’t about personality or talent. In fact, the best leaders exhibit wildly different personali- ties, attitudes, values, and strengths—they’re extroverted or reclusive, easygoing or controlling, generous or parsimonious, numbers or vision oriented.

So what do effective leaders have in common? They get the right things done, in the right ways—by following eight simple rules:

• Ask what needs to be done.

• Ask what’s right for the enterprise.

• Develop action plans.

• Take responsibility for decisions.

• Take responsibility for communicating.

• Focus on opportunities, not problems.

• Run productive meetings.

• Think and say “We,” not “I.”

Using discipline to apply these rules, you gain the knowledge you need to make smart decisions, convert that knowledge into effective action, and ensure accountability throughout your organization.

needs to be done, the effective executive sets priorities and sticks to them. For a CEO, the priority task might be redefining the company’s mission. For a unit head, it might be redefining the unit’s relationship with headquarters. Other tasks, no matter how important or appeal- ing, are postponed. However, after completing the original top-priority task, the executive resets priorities rather than moving on to number two from the original list. He asks, “What must be done now?” This generally results in new and different priorities.

To refer again to America’s best-known CEO: Every five years, ac- cording to his autobiography, Jack Welch asked himself, “What needs to be done now?” And every time, he came up with a new and different priority.

But Welch also thought through another issue before deciding where to concentrate his efforts for the next five years. He asked himself which of the two or three tasks at the top of the list he himself was best suited to undertake. Then he concentrated on that

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Idea in Practice Get the Knowledge You Need

Ask what needs to be done. When Jack Welch asked this question while taking over as CEO at General Electric, he realized that dropping GE businesses that couldn’t be first or second in their industries was es- sential—not the overseas expansion he had wanted to launch. Once you know what must be done, identify tasks you’re best at, concentrating on one at a time. After completing a task, reset priorities based on new realities.

Ask what’s right for the enterprise. Don’t agonize over what’s best for owners, investors, employees, or customers. Decisions that are right for your enterprise are ultimately right for all stakeholders.

Convert Your Knowledge into Action Develop action plans. Devise plans that specify desired results and

constraints (Is the course of action legal and compatible with the company’s mission, values, and policies?). Include check-in points and implications for how you’ll spend your time. And revise plans to reflect new opportunities.

Take responsibility for decisions. Ensure that each decision specifies who’s accountable for carrying it out, when it must be imple- mented, who’ll be affected by it, and who must be informed. Regularly review decisions, especially hires and promotions. This enables you to correct poor decisions before doing real damage.

Take responsibility for commu- nicating. Get input from superiors, subordinates, and peers on your action plans. Let each know what information you need to get the

task; the others he delegated. Effective executives try to focus on jobs they’ll do especially well. They know that enterprises perform if top management performs—and don’t if it doesn’t.

Effective executives’ second practice—fully as important as the first—is to ask, “Is this the right thing for the enterprise?” They do not ask if it’s right for the owners, the stock price, the employees, or the executives. Of course they know that shareholders, employees, and executives are important constituencies who have to support a deci- sion, or at least acquiesce in it, if the choice is to be effective. They know that the share price is important not only for the shareholders but also for the enterprise, since the price/earnings ratio sets the cost

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WHAT MAKES AN EFFECTIVE EXECUTIVE

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the discussion, spelling out new work assignments and deadlines for completing them. General Motors CEO Alfred Sloan’s legendary mastery of meeting follow-up helped secure GM’s industry dominance in the mid-twentieth century.

Think and say “We,” not “I.” Your authority comes from your organization’s trust in you. To get the best results, always consider your organization’s needs and opportunities before your own.

job done. Pay equal attention to peers’ and superiors’ information needs.

Focus on opportunities, not problems. You get results by exploiting opportunities, not solving problems. Identify changes inside and outside your organization (new technologies, product innovations, new market structures), asking “How can we exploit this change to benefit our enterprise?” Then match your best people with the best opportunities.

Ensure Companywide Accountability Run productive meetings. Articulate each meeting’s purpose (Making an announcement? Delivering a report?). Terminate the meeting once the purpose is accomplished. Follow up with short communications summarizing

of capital. But they also know that a decision that isn’t right for the enterprise will ultimately not be right for any of the stakeholders.

This second practice is especially important for executives at fam- ily owned or family run businesses—the majority of businesses in every country—particularly when they’re making decisions about people. In the successful family company, a relative is promoted only if he or she is measurably superior to all nonrelatives on the same level. At DuPont, for instance, all top managers (except the controller and lawyer) were family members in the early years when the firm was run as a family business. All male descendants of the founders were entitled to entry-level jobs at the company. Beyond the entrance

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level, a family member got a promotion only if a panel composed pri- marily of nonfamily managers judged the person to be superior in ability and performance to all other employees at the same level. The same rule was observed for a century in the highly successful British family business J. Lyons & Company (now part of a major conglomer- ate) when it dominated the British food-service and hotel industries.

Asking “What is right for the enterprise?” does not guarantee that the right decision will be made. Even the most brilliant executive is human and thus prone to mistakes and prejudices. But failure to ask the question virtually guarantees the wrong decision.

Write an Action Plan

Executives are doers; they execute. Knowledge is useles

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