Concentration and information literacy are the cornerstones of effective management.
As we’ve seen, efficient managers skillfully balance short-term interests with long-term goals. But what specific skills are required to achieve this?
Drucker says there are two crucial managerial skills: concentration and information literacy.
Let’s start with concentration. For managers, it has nothing to do with reading a book straight through in six hours; rather, concentration is about knowing where to focus your efforts for maximum results.
To that end, effective managerial concentration boils down to one key principle. You should always concentrate on tasks that require the least effort and generate the greatest amount of productivity.
There are two ways you can achieve this.
First, focus on your core competencies and strengths. Or as Drucker succinctly put it, “Don’t major in the minors.” If your employees have a strong innovative streak, urge them to focus on developing cutting-edge technologies, not on churning out low-end consumer goods.
And second, abandon projects or products before they become unproductive. You’ll simply waste too many resources keeping a declining product afloat; you really should be focusing your efforts on the next big thing.
The second crucial managerial skill is information literacy. This is the ability to understand what raw data is actually telling you about your business.
This skill is particularly important in our “big data” era. Today’s companies work with gargantuan data sheets; businesses dedicate tons of resources to statistics-gathering. Yet data is utterly useless if you can’t make heads or tails of it.
In the late 1990s, for example, many American financial institutions were blindsided by the economic collapse of many countries in mainland Asia. Yet other businesses had spotted patterns in economic data from the region in the years leading up to the “sudden” crash.
These companies saw a disaster looming and adjusted their investments, ultimately riding out the crisis in much better shape than others.