Hi, welcome to Bookey. Today we will unlock the book The Effective Executive. This book is the masterpiece of the management master, Peter F. Drucker, and it will address the question: what should an executive do to be effective?
Drucker was the first person to realize that the knowledge economy was about to come. He proposed for the first time in his book that: we will see a knowledge-based society in the future. And as a matter of fact, the management in the future will be focused on the management of knowledge workers. Especially, Drucker redefined “executive” in this book, and proposed that, executives are knowledge workers in the organization, and their top priority task is to manage themselves well. This is consistent with the sayings nowadays like “Anyone can manage”, and “Everyone should be his CEO”. You see, although Drucker wrote this book decades ago, and the quoted cases happened in industrial civilization era, the problems he focused on are still humanistic and well in advance of the era. And the problems he discussed in the book are still the hot management problems nowadays.
The support from Sloan, one outstanding executive, was an indispensable factor that allowed Drucker to grow into a “management master”. Without the in-depth study on General Motors and the chance to get close to Sloan, it would have been impossible for Drucker to write so many far-reaching management books. Sloan, whose full name was Alfred Sloan, was the eighth president of General Motors and had been in office for 23 years. On the 75th anniversary of Business Week, Sloan was chosen as one of the greatest innovators of the past 75 years.
Then what did Sloan do to gain such high praise?
During his term serving as the president of General Motors, it took him only three years to turn the company on the verge of bankruptcy into a winning company. And then he steered the company to rapidly develop into the world's largest automobile company in the following years. From 1921 to 1922, he proposed a new management model called “decentralized operation under centralized policy control”. Are you familiar with the multidivisional company structure adopted by modern businesses? The new management model in his book is the prototype of the structure. He divided General Motors into 21 divisions based on product, appointed four deputy general managers to take charge of the 21 divisions. He also demanded the headquarters to make significant decisions for the divisions, such as financial management and control, appointment and dismissal of leaders, and setting business objectives. Moreover, he made each division take charge of its specific businesses. Sloan believed that, by doing so, the policy decisions and administrative management could be separated in order to guarantee a balance between centralization and decentralization.
These common management concepts in modern enterprises were actually quite advanced at that time. Sloan served as the president at a critical and challenging moment for General Motors. And indeed it was the wisdom of Sloan on effective management that enabled General Motors to move from the status of near-bankruptcy towards excellence.
After listening to Sloan's story, do you also want to manage yourself and your company as effectively as Sloan?
Next, we will tell you the key insights of The Effective Executive in 4 parts. Let's see, what on earth we should do to become an effective executive.
Part 1, Why do we need effective executives?
Part 2, How to know your time
Part 3, How to make strength productive
Part 4, How do effective executives make decisions?