Thinking Managers

Robert Heller of explains why effectiveness is foremost among the attributes that all managers should strive to develop.

The importance of being effective

Some years ago, Peter Drucker highlighted the vital distinction between ‘efficient’ and ‘effective’. Performing an activity swiftly and economically is efficient, while being effective is dependent on doing the right thing. To guide yourself away from doing the wrong thing, and therefore being ineffective, you need the asset of ‘rare sense’ - the ability to think straight, see past stifling conventional wisdom and develop fact-based insight.

As strange as it might sound, rare sense is often perfectly simple. For example, these three principles will serve you well:

  • Buy cheap. Don’t pay more than a dollar for a dollar of sales. And of course, if you can pay 10 cents for that dollar, all the better (ten times better, in fact).
  • Stick to businesses that you thoroughly understand. Warren Buffett has achieved a great deal of success by investing cheaply in the 100% purchase of disparate firms where the business model is clear and simple.
  • Formulate a modus operandi that can be constantly improved and that will work for each business. This is the model of effectiveness

So how much more effective can your business be?

See how many of the following statements are true for your company:

  • You employ a core of top-class executives who are trained in teamwork skills, expert in project management and happy to move from one task team to another.
  • You have a strong, remunerative and lasting grasp on the accounting and the cash flow.
  • You analyse, simplify and improve all the operations constantly to cut costs and make your processes faster.
  • You turn the cost of reductions into much greater value by ‘top-line management’ - increasing total revenues by both volume and value.
  • You know how to reorganise, simplify and reduce costs.
  • You concentrate the business and the management on what the company has to achieve and what it does well.
  • Your management meetings establish the real value of agenda matters, put real choices on the table, are properly focused on decisions rather than discussions and make decisions stick.

If you cannot recognise those attributes in your company, you can and should make your business more effective. The object of the exercise is to achieve real and lasting effectiveness, and that means you have to do things right and certainly not fail to do them at all.

About the author
Rober Heller was the founding Editor of Management Today magazine and is one of the world's best selling authors on business management having written more than 50 books on the subject.