Drucker on Executive Realities

In his book, The Essential Drucker: The Best of Sixty Years of Peter Drucker’s Essential Writings on Management, Peter Drucker analyzed the ways that management practices and principles affect the performance of organizations, individuals, and society. The book covers the basic principles of management and gives professionals the tools to perform the tasks that the environment of tomorrow will require of them.

These are my takeaways from reading the book.

Drucker had described the knowledge worker in a modern organization as an “executive.” The realities of the knowledge workers’ situation both demand effectiveness from the executives but also make it very difficult to achieve effectiveness.

Many activities inside an organization have to do with effort and cost. To put it bluntly, the less (effort) an organization must do to produce results, the better it does its job. To produce the same result with less effort, the people (knowledge workers or executives) in an organization need to learn to be more effective.

There are four major realities over which the executives essentially have no control. These realities are part of the executives’ day and work. The executives have no choice but to “cooperate with the inevitable.” At the same time, every one of these four realities also exerts pressure on the executives. If the executives do not handle these realities effectively, the executive can expect very low performance and a poor result.

Reality No.1: The executive’s time tends to belong to everybody else. We can also describe executive as a captive of the organization. Everybody can move in on his time, and everybody does.

Reality No.2: Executives are forced to keep on “operating” unless they take positive action to change the reality in which they live and work. In most organizations, the executive’s work is mostly reactive. They often do not have control over the events or activities they must respond and address.

Reality No.3: The executive is constantly being pushed towards effectiveness because he is effective only when other people make use of what he contributes. The knowledge worker’s output, by itself, usually does not produce the required results until someone else acts on the output. This makes the executive’s time other people’s resources depending on the results the organization seeks.

Reality No.4: The executive exists within an organization. Specifically, there are no results within the organization. All the results are on the outside. The only business results, for instance, are produced by a customer who converts the costs and efforts of the business into revenues and profits through his willingness to exchange his purchasing power for the products or services of the business.

These executives inside an organization cannot change these four realities. They are necessary conditions of his existence, but, if leaving them unchecked, these four forces can also push the executives toward average or low performance. That means the knowledge workers in their organizations must make special efforts to learn to be effective or the ineffectiveness and poor results will surely set in.