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Lessons From Peter Drucker

Becoming a Continually Effective Executive Drucker's Way

Posted: 01/05/2015
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Drucker wrote a book on the effective executive, and it was one of his best. One aspect of the book frequently overlooked is the fact that many executives fail after long periods of being highly successful at lower levels. Despite a lot of effort and thinking, this is still a big problem.

A few days ago I received an update in a newsletter from the Industrial College of the Armed Forces Association (I am a 1989 graduate) noting that a study from the Center for Creative Leadership (and one by a prominent executive search firm) cites that 40% of new or first time executives are failing or quitting within their first 18 months.

Not a New Problem

Now this is not a new problem in either the military or civilian worlds. Leaders with previous records of outstanding performance have failed upon reaching higher positions throughout history. Drucker not only recognized this, but he recognized the root cause.

In The Effective Executive in 1967 he wrote: "The most common cause of executive failure is inability or unwillingness to change with the demands of a new position. The executive who keeps on doing what he has done successfully before he moved is almost bound to fail."

Unfortunately this problem has worsened significantly to the point where it is no longer acceptable either as a management phenomenon or for the individual executive "victim". In business millions, if not billions, of dollars are lost every year due to this issue. At the very top, it’s worse. According to one study, over a ten year period one-third of Fortune 500 chief executives have lasted less than three years in the job. Overall CEO failure rates are estimated to be as high as 75%, and rarely less than 30%, and this rate is increasing. In a single ten year period, CEO departures due to poor performance increased by 20%.

The issue is complicated by the fact that all executives must learn to think "big" at much earlier stages. Because of technology a junior executive can be in the same situation as the senior level strategic leader in many ways.

For example, a middle manager may be required to lead multi-discipline teams outside of his or her own discipline in specialties about which he may have little knowledge. And just as a top executive, he is held accountable for this responsibility. Though help may be available from specialists in a variety of disciplines, he or she is still responsible in areas outside of the normal range of responsibilities formerly necessary.

Drucker Said to Become Master of More than One Trade

Drucker maintained that today it was essential that business executives master at least two disciplines, and that one of them should be outside of the field of business. He said this was important in the preparation of an executive for higher responsibilities because one never knows what future responsibilities might be thrust upon one unexpectedly. Doing one’s own broadening is essential.

Peter said that having mastered at least two disciplines would have a number of beneficial effects. The executive would have the self confidence in knowing that he was not limited to a single field. That he could, if called upon, do something entirely different, and do it well.

More Challenges

Today’s continuing executive has additional challenges. Technology enables change to take place at near light-speed velocity, and with much greater penalty for failure than ever before. The penalty for the organization extends deeper than simply the loss of a leader of great promise because an executive’s actions have a much longer time line than ever before. Even a junior manager may affect what happens over a period of weeks, months, or maybe a year or more into the future and the higher the level, a manager’s decisions reach farther and farther into unknown territory.

Problem Definition

Peter defined the problem early on for us. You may be an outstanding manager at one level, but if you try to manage in the same way at a much higher level, with no preparation for the higher level job, your success is far from likely. Your personal environment has changed, but you may continue to act as if you were in the same, more limited, old environment.

Drucker’s Approach

The good news is that you can implement Drucker’s program on your own. There are only one main and two supporting elements. The main component I have already introduced to you. It is to follow Drucker’s exhortation to take the time to become an expert outside of your main profession. The two supporting elements will help you in many ways, not only in developing this second field of expertise, but also in broadening and sharpening your thinking.

However, you need to start taking action starting now. The object is to start to think and act strategically and to handle the increased complexity resulting from the necessity to integrate numerous elements that are in some cases far removed from your basic training and experience. This, as Drucker taught, requires you to develop expertise outside of your current thinking.

At first, this may feel a little unnatural. You may have spent so much time and energy in becoming the best at what you do that you are going to feel guilty about taking time away from this focus. Also, as you got better and better at one thing, knowing more and more about less and less, you may have come to the point that within your profession that nothing really challenges you for very long. You could manage in most instances within your basic profession almost in your sleep.

You are so competent at what you currently do, that anything new that you learn in your present field can be related to dozens of other elements in the same general arena about which you are already familiar. This is not going to be the same when you decide to become a real expert in a totally different discipline. For the first time in years, you are probably going to feel inept, and less confident. However, the fact that you learned so much in one field means that you can repeat it in another. Your confidence in what you do now is beneficial to that extent. You are supposed to feel uncomfortable as you learn something totally new. Just remember why you are doing this. Don’t expect to start from the same level of expertise you hold in the area of your profession.

The First Supporting Element

The first supporting element is based on extensive reading outside the general area of your primary expertise. So, I would recommend that you develop the habit of daily reading as you progress into unfamiliar territory. Of course, the big problem for most of us is to find the time. It doesn’t have to be a very long time period. Thirty minutes is sufficient. If you set aside only thirty minutes for this special type of reading and do it every day, say first thing when you first wake up in the morning, or the last thing before you go to sleep in the evening, that’s 182.5 hours a year. Or bump it up to an hour and take the hour away from watching television. Either 182.5 or 365 hours a year is impressive. That’s a lot of reading.

If you do this already, keep it up. However, this should not only be reading of general management and professional books in business, but also, general interest books in history, politics, economics, social issues, etc., and even fiction. Don’t just read words, but engage with the author actively. If you disagree with the author’s "facts" or reasoning, that is so much the better. Think it through and refute the author as if he or she were right there with you.

The Final Element

For the final element, become a writer. The writing component of this element may be even more challenging to some at first, but short of face-to-face interaction with others on these issues, it is the only way I know to really engage in complex problems with which the strategic leader will be faced.

What are you going to write about? Anything you want. Take as a subject material from one of the books you have read. You already thought about the issue when you read the material and engaged with the author mentally. Organize your thoughts and write them down. This, too will improve as you progress.

In encouraging us to become experts in a field outside of our professions, Drucker clearly saw that certain abilities were needed by executives at successively higher levels which were not developed through challenges of your previous work. He knew what it took to be a continuing effective manager, and he hit on a unique way for an executive to develop these abilities. He followed this plan, and you and I can, too.