please summarize and post your takeaways from the below

Great managers may be charismatic or dull, generous or tightfisted, visionary or numbers oriented. But every effective executive follows eight simple practices. A N EFFECTIVE EXECUTIVE does not need to be a When Truman became president in 1945, he knew ex- leader in the sense that the term is now most actly what he wanted to do: complete the economic and commonly used. Harry Truman did not have one social reforms of Roosevelt's New Deal, which had been ounce of charisma, for example, yet he was among the deferred by World War II. As soon as he asked what most effective chief executives in U.S. history. Similarly, needed to be done, though, Truman realized that foreign some of the best business and nonprofit CEOs I've worked affairs had absolute priority. He organized his working with over a 65-year consulting career were not stereotyp- day so that it began with tutorials on foreign policy by the ical leaders. They were all over the map in terms of their secretaries of state and defense. As a result, he became personalities, attitudes, values, strengths, and weaknesses. the most effective president in foreign affairs the United They ranged from extroverted to nearly reclusive, from States has ever known. He contained Communism in both easygoing to controlling, from generous to parsimonious. Europe and Asia and, with the Marshall Plan, triggered What made them all effective is that they followed the 50 years of worldwide economic growth. same eight practices: Similarly, Jack Welch realized that what needed to be . They asked, "What needs to be done?" done at General Electric when he took over as chief ex- They asked, "What is right for the enterprise?" ecutive was not the overseas expansion he wanted to . They developed action plans. launch. It was getting rid of GE businesses that, no matter They took responsibility for decisions. how profitable, could not be number one or number two . They took responsibility for communicating. in their industries. . They were focused on opportunities rather than The answer to the question "What needs to be done?" problems. almost always contains more than one urgent task. But They ran productive meetings. effective executives do not splinter themselves. They con- . They thought and said "we" rather than "I." centrate on one task if at all possible. If they are among The first two practices gave them the knowledge they those people - a sizable minority - who work best with a needed. The next four helped them convert this knowl- change of pace in their working day, they pick two tasks. edge into effective action. The last two ensured that the I have never encountered an executive who remains ef- whole organization felt responsible and accountable. fective while tackling more than two tasks at a time. Hence, after asking what needs to be done, the effective Get the Knowledge You Need executive sets priorities and sticks to them. For a CEO, the priority task might be redefining the company's mission. The first practice is to ask what needs to be done. Note For a unit head, it might be redefining the unit's relation- that the question is not "What do I want to do?" Asking ship with headquarters. Other tasks, no matter how im- what has to be done, and taking the question seriously, is portant or appealing, are postponed. However, after com- crucial for managerial success. Failure to ask this question pleting the original top-priority task, the executive resets will render even the ablest executive ineffectual. priorities rather than moving on to number two from the JUNE 2004 59What Makes an Effective Executive original list. He asks, "What must be done now?" This gen- Write an Action Plan erally results in new and different priorities. To refer again to America's best-known CEO: Every five Executives are doers; they execute. Knowledge is useless years, according to his autobiography, Jack Welch asked to executives until it has been translated into deeds. But himself, "What needs to be done now?" And every time, he before springing into action, the executive needs to plan came up with a new and different priority. his course. He needs to think about desired results, prob- But Welch also thought through another issue before able restraints, future revisions, check-in points, and im- deciding where to concentrate his efforts for the next five plications for how he'll spend his time. years. He asked himself which of the two or three tasks First, the executive defines desired results by asking: at the top of the list he himself was best suited to under- "What contributions should the enterprise expect from take. Then he concentrated on that task; the others he del- me over the next 18 months to two years? What results egated. Effective executives try to focus on jobs they'll do will I commit to? With what deadlines?" Then he considers especially well. They know that enterprises perform if top the restraints on action: "Is this course of action ethical? management performs - and don't if it doesn't. Is it acceptable within the organization? Is it legal? Is it Effective executives' second practice-fully as important compatible with the mission, values, and policies of the as the first - is to ask, "Is this the right thing for the en- organization?" Affirmative answers don't guarantee that terprise?" They do not ask if it's right for the owners, the the action will be effective. But violating these restraints stock price, the employees, or the executives. Of course is certain to make it both wrong and ineffectual. they know that shareholders, employees, and executives The action plan is a statement of intentions rather than are important constituencies who have to support a de- a commitment. It must not become a straitjacket. It cision, or at least acquiesce in it, if the choice is to be ef- should be revised often, because every success creates fective. They know that the share price is important not new opportunities. So does every failure. The same is true only for the shareholders but for changes in the business envi- also for the enterprise, since the ronment, in the market, and espe- price/earnings ratio sets the cost Asking what has to be done, cially in people within the enter- of capital. But they also know prise-all these changes demand that a decision that isn't right for and taking the question that the plan be revised. A writ- the enterprise will ultimately ten plan should anticipate the not be right for any of the stake- seriously, is crucial for need for flexibility. holders. managerial success. In addition, the action plan This second practice is espe- needs to create a system for cially important for executives at checking the results against the family owned or family run businesses - the majority of expectations. Effective executives usually build two such businesses in every country - particularly when they're checks into their action plans. The first check comes making decisions about people. In the successful family halfway through the plan's time period; for example, at company, a relative is promoted only if he or she is mea- nine months. The second occurs at the end, before the surably superior to all nonrelatives on the same level. At next action plan is drawn up. DuPont, for instance, all top managers (except the con- Finally, the action plan has to become the basis for the troller and lawyer) were family members in the early executive's time management. Time is an executive's years when the firm was run as a family business. All male scarcest and most precious resource. And organizations- descendants of the founders were entitled to entry-level whether government agencies, businesses, or nonprof- jobs at the company. Beyond the entrance level, a family its - are inherently time wasters. The action plan will member got a promotion only if a panel composed pri- prove useless unless it's allowed to determine how the marily of nonfamily managers judged the person to be executive spends his or her time. superior in ability and performance to all other employ- Napoleon allegedly said that no successful battle ever ees at the same level. The same rule was observed for a followed its plan. Yet Napoleon also planned every one century in the highly successful British family business of his battles, far more meticulously than any earlier gen- J. Lyons & Company (now part of a major conglomerate) eral had done. Without an action plan, the executive be- when it dominated the British food-service and hotel comes a prisoner of events. And without check-ins to re- industries. Asking "What is right for the enterprise?" does not Peter F. Drucker is the Marie Rankin Clarke Professor of guarantee that the right decision will be made. Even the Social Science and Management at the Peter F. Drucker and most brilliant executive is human and thus prone to mis- Masatoshi Ito Graduate School of Management at Clare- takes and prejudices. But failure to ask the question vir- mont Graduate University in Claremont, California. He has tually guarantees the wrong decision. written nearly two dozen articles for HBR. 60 HARVARD BUSINESS REVIEWWhat Makes an Effective Executive examine the plan as events unfold, the executive has no Executives also owe it to the organization and to their way of knowing which events really matter and which are fellow workers not to tolerate nonperforming individuals only noise. in important jobs. It may not be the employees' fault that they are underperforming, but even so, they have to be re- Act moved. People who have failed in a new job should be given the choice to go back to a job at their former level When they translate plans into action, executives need to and salary. This option is rarely exercised; such people, as pay particular attention to decision making, communica- a rule, leave voluntarily, at least when their employers are tion, opportunities (as opposed to problems), and meet- U.S. firms. But the very existence of the option can have ings. I'll consider these one at a time. a powerful effect, encouraging people to leave safe, com- Take responsibility for decisions. A decision has not fortable jobs and take risky new assignments. The organi- been made until people know: zation's performance depends on employees' willingness the name of the person accountable for carrying it out; to take such chances. the deadline; A systematic decision review can be a powerful tool for the names of the people who will be affected by the self-development, too. Checking the results of a decision decision and therefore have to know about, under- against its expectations shows executives what their stand, and approve it- or at least not be strongly op- strengths are, where they need to improve, and where they posed to it - and lack knowledge or information. It shows them their biases. the names of the people who have to be informed of the Very often it shows them that their decisions didn't pro- decision, even if they are not directly affected by it. duce results because they didn't put the right people on An extraordinary number of organizational decisions the job. Allocating the best people to the right positions run into trouble because these bases aren't covered. One is a crucial, tough job that many executives slight, in part of my clients, 30 years ago, lost its leadership position in because the best people are already too busy. Systematic the fast-growing Japanese market because the company, decision review also shows executives their own weak- after deciding to enter into a joint venture with a new Jap- nesses, particularly the areas in which they are simply in- anese partner, never made clear who was to inform the competent. In these areas, smart executives don't make de- purchasing agents that the partner defined its specific cisions or take actions. They delegate. Everyone has such cations in meters and kilograms rather than feet and areas; there's no such thing as a universal executive genius. pounds- and nobody ever did relay that information. Most discussions of decision making assume that only It's just as important to review decisions periodi- senior executives make decisions or that only senior ex- cally- at a time that's been agreed on in advance -as it is ecutives' decisions matter. This is a dangerous mistake. to make them carefully in the first place. That way, a poor Decisions are made at every level of the organization, be- decision can be corrected before it does real damage. ginning with individual professional contributors and These reviews can cover anything from the results to the frontline supervisors. These apparently low-level deci- assumptions underlying the sions are extremely important decision. in a knowledge-based organi- Such a review is especially Executives owe it to the zation. Knowledge workers important for the most crucial and most difficult of all deci- organization and their fellow are supposed to know more about their areas of special- sions, the ones about hiring or workers not to tolerate ization - for example, tax ac- promoting people. Studies of nonperforming people in counting -than anybody else, decisions about people show so their decisions are likely to that only one-third of such important jobs. have an impact throughout choices turn out to be truly the company. Making good successful. One-third are likely decisions is a crucial skill at to be draws- neither successes nor outright failures. And every level. It needs to be taught explicitly to everyone one-third are failures, pure and simple. Effective execu- in organizations that are based on knowledge. tives know this and check up (six to nine months later) on Take responsibility for communicating. Effective the results of their people decisions. If they find that a executives make sure that both their action plans and decision has not had the desired results, they don't con- their information needs are understood. Specifically, this clude that the person has not performed. They conclude, means that they share their plans with and ask for com- instead, that they themselves made a mistake. In a well- ments from all their colleagues-superiors, subordinates, managed enterprise, it is understood that people who fail and peers. At the same time, they let each person know in a new job, especially after a promotion, may not be the what information they'll need to get the job done. The in- ones to blame. formation flow from subordinate to boss is usually what JUNE 2004 61What Makes an Effective Executive gets the most attention. But exec- opportunities rather than on prob- utives need to pay equal attention lems. One way to staff for opportun to peers' and superiors' informa- In areas where they nities is to ask each member of the tion needs. are simply incompetent, management group to prepare two We all know, thanks to Chester Barnard's 1938 classic The Func- smart executives don't lists every six months - a list of op- portunities for the entire enterprise tions of the Executive, that organi- make decisions or take and a list of the best-performing zations are held together by infor- mation rather than by ownership actions. They delegate. people throughout the enterprise. These are discussed, then melded or command. Still, far too many Everyone has such areas. into two master lists, and the best executives behave as if informa- people are matched with the best op- tion and its flow were the job of portunities. In Japan, by the way, the information specialist - for example, the accountant. this matchup is considered a major HR task in a big cor- As a result, they get an enormous amount of data they poration or government department; that practice is one do not need and cannot use, but little of the information of the key strengths of Japanese business. they do need. The best way around this problem is for Make meetings productive. The most visible, power- each executive to identify the information he needs, ask ful, and, arguably, effective nongovernmental executive in for it, and keep pushing until he gets it. the America of World War II and the years thereafter was Focus on opportunities. Good executives focus on op- not a businessman. It was Francis Cardinal Spellman, the portunities rather than problems. Problems have to be head of the Roman Catholic Archdiocese of New York taken care of, of course; they must not be swept under the and adviser to several U.S. presidents. When Spellman rug. But problem solving, however necessary, does not took over, the diocese was bankrupt and totally demor- produce results. It prevents damage. Exploiting opportu alized. His successor inherited the leadership position in nities produces results. the American Catholic church. Spellman often said that Above all, effective executives treat change as an op- during his waking hours he was alone only twice each day, portunity rather than a threat. They systematically look for 25 minutes each time: when he said Mass in his private at changes, inside and outside the corporation, and ask, chapel after getting up in the morning and when he said "How can we exploit this change as an opportunity for his evening prayers before going to bed. Otherwise he was our enterprise?" Specifically, executives scan these seven always with people in a meeting, starting at breakfast situations for opportunities: with one Catholic organization and ending at dinner with an unexpected success or failure in their own enter- another. prise, in a competing enterprise, or in the industry; Top executives aren't quite as imprisoned as the arch- a gap between what is and what could be in a market, bishop of a major Catholic diocese. But every study of the process, product, or service (for example, in the nine- executive workday has found that even junior executives teenth century, the paper industry concentrated on the and professionals are with other people-that is, in a meet- 10% of each tree that became wood pulp and totally ing of some sort - more than half of every business day. neglected the possibilities in the remaining 90%, which The only exceptions are a few senior researchers. Even a became waste); conversation with only one other person is a meeting. innovation in a process, product, or service, whether Hence, if they are to be effective, executives must make inside or outside the enterprise or its industry; meetings productive. They must make sure that meetings changes in industry structure and market structure; are work sessions rather than bull sessions. . demographics; The key to running an effective meeting is to decide in changes in mind-set, values, perception, mood, or advance what kind of meeting it will be. Different kinds meaning; and of meetings require different forms of preparation and . new knowledge or a new technology. different results: Effective executives also make sure that problems do A meeting to prepare a statement, an announcement, or not overwhelm opportunities. In most companies, the a press release. For this to be productive, one member has first page of the monthly management report lists key to prepare a draft beforehand. At the meeting's end, a problems. It's far wiser to list opportunities on the first preappointed member has to take responsibility for dis- page and leave problems for the second page. Unless seminating the final text. there is a true catastrophe, problems are not discussed in A meeting to make an announcement - for example, an management meetings until opportunities have been organizational change. This meeting should be confined analyzed and properly dealt with. to the announcement and a discussion about it. Staffing is another important aspect of being opportu A meeting in which one member reports. Nothing but nity focused. Effective executives put their best people on the report should be discussed. 62 HARVARD BUSINESS REVIEWWhat Makes an Effective Executive A meeting in which several or all members report. Either Think and Say "We" there should be no discussion at all or the discussion should be limited to questions for clarification. Alterna- The final practice is this: Don't think or say "I." Think and tively, for each report there could be a short discussion in say "we." Effective executives know that they have ulti- which all participants may ask questions. If this is the for- mate responsibility, which can be neither shared nor del- mat, the reports should be distributed to all participants egated. But they have authority only because they have well before the meeting. At this kind of meeting, each the trust of the organization. This means that they think report should be limited to a preset time-for example, 15 of the needs and the opportunities of the organization be- minutes. fore they think of their own needs and opportunities. This A meeting to inform the convening executive. The execu- one may sound simple; it isn't, but it needs to be strictly tive should listen and ask questions. He or she should sum observed. up but not make a presentation. We've just reviewed eight practices of effective execu- A meeting whose only function is to allow the participants tives. I'm going to throw in one final, bonus practice. This to be in the executive's presence. Cardinal Spellman's break- one's so important that I'll elevate it to the level of a rule: fast and dinner meetings were of that kind. There is no Listen first, speak last. way to make these meetings productive. They are the Effective executives differ widely in their personalities, penalties of rank. Senior executives are effective to the ex- strengths, weaknesses, values, and beliefs. All they have in tent to which they can prevent such meetings from en- common is that they get the right things done. Some are croaching on their workdays. Spellman, for instance, was born effective. But the demand is much too great to be effective in large part because he confined such meetings satisfied by extraordinary talent. Effectiveness is a disci- to breakfast and dinner and kept the rest of his working pline. And, like every discipline, effectiveness can be day free of them. learned and must be earned. Making a meeting productive takes a good deal of self- discipline. It requires that executives determine what kind Reprint RO406C; HBR OnPoint 6980 of meeting is appropriate and then stick to that format. To order, see page 139. It's also necessary to terminate the meeting as soon as its specific purpose has been accomplished. Good executives don't raise another matter for discussion. They sum up and adjourn. Good follow-up is just as important as the meeting it- self. The great master of follow-up was Alfred Sloan, the most effective business executive I have ever known. Sloan, who headed General Motors from the 1920s until the 1950s, spent most of his six working days a week in meetings-three days a week in formal committee meet- ings with a set membership, the other three days in ad hoc meetings with individual GM executives or with a small group of executives. At the beginning of a formal meet- ing, Sloan announced the meeting's purpose. He then listened. He never took notes and he rarely spoke except to clarify a confusing point. At the end he summed up, thanked the participants, and left. Then he immediately wrote a short memo addressed to one attendee of the meeting. In that note, he summarized the discussion and its conclusions and spelled out any work assignment de- cided upon in the meeting (including a decision to hold another meeting on the subject or to study an issue). He specified the deadline and the executive who was to be accountable for the assignment. He sent a copy of the memo to everyone who'd been present at the meeting. It was through these memos-each a small masterpiece- that Sloan made himself into an outstandingly effective VOIKO executive. BOB VOJTKO Effective executives know that any given meeting is ei- "And for tomorrow's board meeting, ther productive or a total waste of time. please see to it that there's an assortment of Danish." JUNE 2004 63