Sunday, March 18, 2012

The Druckerian Effectiveness of Steve Jobs

In the June 2004 issue of Harvard Business Review, Peter F. Drucker draws on his 65 years of consulting experience to distill the essense of "What Makes An Effective Executive":
Effective executives differ widely in their personalities, strengths, weaknesses, values, and beliefs. All they have in common is that they get the right things done.
Drucker constrasts executive effectiveness ("getting the right things done") with executive efficiency ("getting things done right"). Both are necessary of course, but for executive and organisational success, one (effectiveness) must necessarily precede and have preeminence over the other (efficiency). Drucker identifies eight practices of effective executives. Few would dispute that Steve Jobs was the most effective business executive of the last 15 to 20 years. So I thought it would be interesting, given all the new information we now have on Steve Jobs, particularly from Walter Isaacson's biography, to see exactly how Jobs measures up on the Drucker scale of executive effectiveness. According to Drucker, all effective executives follow the following eight practices which make them effective:
  1. They ask, "What needs to be done?" (Not "What do I want to do?")
  2. They ask, "What is right for the enterprise?"
  3. They develop action plans. (And then translate those plans into action using practices 4, 5, 6 and 7.)
  4. They take responsibility for decisions.
  5. They take responsibility for communicating.
  6. They focus on opportunities rather than problems.
  7. They run productive meetings.
  8. They think and say "we" rather than "I".
Let's see how Steve Jobs measures up on each of these eight practices:

  • Practice #1: Asking, "What needs to be done?"
    Drucker notes that an effective executive asks this question regularly and also at critical times in the life of the organisation. He gathers all the required information, creates a prioritised list of tasks and decides which of the top two or three tasks he is best suited to focus on; he delegates the rest. He then gets to work on one, or if he is one of the sizable minority who require a change of pace in their working day, two, of the top priorities. The evidence from Isaacson's book suggests that this is precisely how Steve Jobs operated. Perhaps the most famous example was the period just after he returned to Apple in 1997, and asked, in effect, precisely that question: "What needs to be done?" Additionally, Steve Jobs's ability to totally focus on one thing at a time was legendary.
  • Practice #2: Asking, "What is right for the enterprise?"
    Not: what is right for owners, the stockprice, employees or executives. There is plenty of evidence that this is also something Steve Jobs did habitually.
  • Practice #3: Developing action plans.
    This practice involves thinking about desired results (and associated deadlines), probable constraints on actions (ethical, legal, organisational mission, values and policies), future revisions (incorporating flexibility in the plan), check-in points (periodically measuring current results against prior expectations), and the resulting implications for the executive's time management. Again, Steve Job's handling of Apple's near-death experience in the late 1990s provides a prime example of this practice.
  • Practice #4: Taking responsibility for decisions.
    Drucker emphasises accountability for decisions. There is no decision at Apple that doesn't have a so-called DRI (directly responsible individual) associated with it. This is an aspect of Apple's culture that Steve Jobs really emphasised and exemplified, as vividly illustrated by The Parable of the Janitor and the Vice President (as recorded by Adam Lashinky). With respect to hiring and promotion decisions, Drucker notes that executives "owe it to the organization and to their fellow workers not to tolerate non-performing individuals in important jobs". Steve Jobs considered protecting Apple from what he called the "bozo explosion" to be one of his most important responsibilities.
  • Practice #5: Taking responsibility for communicating.
    Steve Jobs was a masterful communicator both inside and outside Apple. There's lots of evidence of that in Isaacson's book and elsewhere.
  • Practice #6: Focusing on opportunities rather than problems.
    Think iMac, iPod, iTunes, iPhone and iPad.
  • Practice #7: Running productive meetings.
    Steve Jobs was a highly effective meeter. In his classic 1966 book "The Effective Executive", Drucker observes that: "Meetings are by definition a concession to deficient organization. For one either meets or one works. One cannot do both at the same time." Steve Jobs and Apple defy this general observation. By all accounts, Steve Jobs ran extremely productive meetings: a results, strategy and project review meeting with his executive management team every Monday; a marketing and communications meeting every Wednesday; and a Top 100 meeting every year or so. For more on this, see Isaacson's biography and Adam Lashinsky's new book "Inside Apple".
  • Practice #8: Thinking and saying "we" rather than "I".
    In a 2003 interview for "60 Minutes", Dan Rather asked Steve Jobs what his biggest strength was. Steve Jobs's response was revealing and, I believe, completely truthful: "I've been very lucky in meeting incredibly talented people and hanging out with them. And so that's been my greatest strength." It's interesting that, unlike virtually all other top executives who first achieve success in some sort of individual functional role (even entrepreneurs), virtually all the successes in Steve Jobs's career, even the early ones, came from identifying, tapping into, inspiring, collaborating with and orchestrating the talents of other people. Perhaps the closest analogue to Job's unusual executive career comes from the world of the arts: the conductor, the producer, or the director.
Steve Jobs scores extremely well on all eight of Drucker's practices. No wonder he was able to steer Apple from the brink of financial collapse in 1997 to being the largest corporation in the world today by market capitalisation.

Towards the end of his article, Drucker briefly introduces a ninth and final practice, that he considers so important that he elevates it to the level of a rule: "Listen first, speak last". Unfortunately he says little more than that and it is impossible to precisely ascertain the wider implications of what he means. But we can speculate. My own view is that: whereas Drucker's first eight practices are largely mechanistic and demonstrate knowledge and skill (or technique), Drucker's ninth practice is deeply humanistic and demonstrates wisdom. For it is only the wise man who is quick to listen and slow to speak. Drucker himself of course was, and remains, the wisest and most deeply humanitarian of the so-called management gurus. In fact, he detested the very term "management guru" and instead thought of himself as what he called a "social ecologist". Drucker's ninth practice, and only rule, of executive effectiveness is really about effective executives also being wise.

I am a great admirer of Steve Jobs: his vision, his passion, his focus, and his ability to bring out the very best (and even better) from the people he worked with. But I'm not sure I ever think of Steve Jobs as being wise as such. Brilliant, deeply reflective, insightful, visionary, tenacious, skillful, certainly, but wise? No, sadly not. Perhaps wisdom is too much to ask of a business executive whose role, after all, is simply to make his organisation as effective and as efficient as possible. (The use of the word "simply" here should not be misconstrued to imply "easily".) I think what Drucker's rule really means is that without wisdom there can be no long-term executive effectiveness. Steve Jobs and his Apple executive team score an A+ on all of Drucker's first eight tests of executive effectiveness. The results of the test of long-term executive effectiveness will only be in after five to ten years. They will make very interesting and instructive reading indeed.


roberto said...

Excellent article; educational, informative, and a great tribute to the ftaher of modern management, Peter F. Drucker

Roberto Torres
Doctoral Student

roberto said...

Excellent article; well written, educational, and informtive. A real tribute to the father of modern management, Peter F. Drucker. Thank you,

Roberto L. Torres
Former Drucker's student
Doctoral Student, School of Advanced Studies, UPOX