Drucker on Effective Decisions, Part 4

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.

In the chapter “Effective Decisions,” Drucker discussed the five aspects of the effective decision-making process.

Step 1. The decision-maker reaches a clear realization that the problem was a generic situation and not a random exception.

Step 2. The decision-maker understand the specifications that the answer to the problem had to satisfy.

Step 3. The decision-maker thinks through what is the “right” solution.

Step 4. The decision-maker builds actions into the decision.

Step 5. The decision-maker gathers feedback that tests the validity and effectiveness of the decision.

After steps one through four, Drucker asserted that we must build feedback into the decision process. The purpose of the feedback process is to test our expectations that underlie the decision against actual events.

The feedback is necessary because humans make decisions and human beings are fallible. Even the best decision has a high probability of being wrong. Decisions also might have a long shelf life. Even the most effective one eventually becomes obsolete.

Drucker saw the feedback step would be even more critical with the information age. With the help of computers in decision-making, we run a risk that the decision-makers are removed from the reality. Drucker suggested that we verify the abstractions with constant checks against the concrete. Otherwise, we run the danger that we will be making decisions using assumptions that are not in alignment with the reality. Computers can make the laborious work of feedback verification easier through automation.

Drucker encouraged us to go out and look for evidence to test our assumptions about a decision or results of a decision compared against the reality. Reality never stands still for very long, so we all need organized information for the feedback.

In summary, Drucker believed that effective people do not make many decisions. Instead, they concentrate on important decisions. The important decisions will be strategic and generic, rather than tailored to solve one particular problem. Effective people also try to make the few important decisions on the highest level of conceptual understanding. They try to find the constants in a situation.

Most importantly, effective people know that the most time-consuming step in the process is not making the decision but putting it into action. Unless a decision has “degenerated into work,” it is not a decision; it is at best a good intention. While the effective decision is based on the highest level of conceptual understanding, the action to carry it out should be as close as possible to the working level and as simple as possible.