Drucker on Effective Decisions, Part 7

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.

Besides making effective decisions, Drucker believed there is one question that all effective decision-makers should ask. That is “Is a decision really necessary?”

We can think of this question as one, last sanity-check in the whole decision-making process. One alternative to all decisions is always the “doing nothing” alternative.

If we do nothing and the situation either resolves itself over time or produces an inconsequential result, we need to consider the “do nothing” option.

We need to think through this “do nothing” alternative because every decision will bring about some changes. When we introduce a change or intervention into a system, the decision can carry with it the risk of shock to the system.

We should always seek to minimize the cost and risk our decision will introduce into the system. If the situation or condition is likely to degenerate if nothing is done, we certainly need to decide how to remedy the condition.

This decision-making criterion also applies to opportunity. If the opportunity is important and is likely to vanish unless we act, it certainly will require a decision on our part.

In this situation the effective decision-maker compares effort and risk of action to the risk of inaction. Drucker, therefore, suggested the following two guidelines:

  • Act if on balance the benefits greatly outweigh cost and risk.
  • Act or do not act, but do not “hedge” or compromise.

Drucker suggested the second guideline, so we do not run the risk of making the situation worse by implementing the decision in a half-ass manner. When a surgeon decides to operate, he does not take half-action. Half-action is the one thing that is always wrong, and the one sure way not to satisfy the minimum specifications or the minimum boundary conditions.

Also, many decisions in life will not be pleasant, easy, or popular. Some decisions can be downright difficult. If we had followed the process thus far and thought through all the boundary conditions and specifications, we need to do the hard work and get it done. The effective decision-maker does not waste the time of good people to cover up his indecision.

Effective decision-makers also will not rush into a decision unless he is sure he understands it. Just because something is difficult, disagreeable, or frightening is no reason for not doing it if it is right. The effective decision-maker will take the time necessary to adjust if warranted, but he does not wait long to get back on track. He acts with speed and energy whether he likes to or not.

As knowledge workers, we do not always get paid for doing the things we like to do. We get paid for getting the right things done—most of all in our making of effective decisions. These days, the ability to make effective decisions largely determines our overall effectiveness as knowledge workers.