An entrepreneur owned a massive, highly sophisticated manufacturing plant that generated enormous profits. One day, without warning, the production line ground to a halt. The machinery refused to run, and every hour of downtime meant staggering financial losses.

The best engineers and specialists were brought in. They inspected, tested, debated and failed. Days passed. The plant remained silent, bleeding money.

At last, a new service technician was called. After a brief inspection, she said calmly, “I can fix it, but it will cost $25,000.” The price seemed outrageous, but compared with the losses mounting by the minute, the entrepreneur reluctantly agreed.

The technician walked over to the machinery, paused, then placed a drop of oil in a spot no one had thought of. The machines roared back to life. The entrepreneur exploded.

“You expect $25,000 for that? No one deserves $25,000 for oiling a machine!”

The technician met his glare and replied, “You’re not paying me for oiling your machine. You’re paying me for knowing where to put the oil.”

Of course, this story is fictional, but it captures a truth I’ve observed repeatedly throughout my career: The most effective leaders aren’t defined by their ability to do the work themselves, but by their ability to know what work needs to be done. Skill and execution matter, but judgment may matter even more. As I often put it, it’s great to be excellent at cutting down trees, but someone must make sure you’re in the right forest.

Making It Look Easy

I’ve heard many people remark about how easy leadership must be — just tell others what to do and then sit back while they handle the real work. That view misses the hardest part of leadership: deciding what should be done when and why.

I’ve often described leadership as standing in front of a vast, complex machine. A leader is constantly observing it, listening to it hum, watching how the parts interact, sensing when something is even slightly off. Most of the time, nothing dramatic is required. Occasionally, the leader reaches for an oilcan and places a single drop in just the right spot. Other times, it takes two.

People watch the leader place those drops of oil in the right places and conclude that it must be the easiest job in the world. In a sense, they’re right — it is easy to place a drop of oil. What’s extraordinarily difficult is knowing when to do it, where to do it and when to do nothing at all. That’s what great leaders do.

Here are some examples of great leaders making tough decisions that seemed simple and redirected an entire organization.

• Steve Jobs came back to Apple in 1997 and cut dozens of products down to four. Being brave enough to cut revenue-generating products during a turnaround looked simple but was risky and, without hindsight, counterintuitive.

• Satya Nadella’s transitioning of Microsoft to a cloud focus after becoming CEO seemed simple, but it was something a lot of smart people before him had declined to do. Nadella understood the long-term strategic benefits and was willing to take the risk.

• Andy Grove transitioned Intel away from memory chips — its core business — to microchips. This decision seemed simple, but it was gut-wrenching. Folks said Intel was admitting failure, but Grove knew that for Intel to succeed, the transition was necessary.

• In 2008, Starbucks CEO Howard Schultz closed 7,000 stores for employee retraining. However, Schultz knew customer service had dropped at those stores, and they needed to step back and train people on what great service looked like. It paid off for Starbucks.

How You Can Apply This Idea

These are well-known examples from prominent companies and leaders. However, most daily examples are much more mundane. Here are some places where your organization may need a well-placed drop of oil.

• Do you have an employee who has been underperforming and holding your organization and team back? You almost certainly need to make a change. I have often waited too long to make changes with our team, and I’ve always regretted it. It is better for your organization, your team and the individual if you stop delaying and make the change.

• Do you have other necessary changes in your organization that you are delaying, putting off the pain? If so, you are significantly hurting your team and organization. A few years ago, due to numerous acquisitions, Correct Craft was operating with several enterprise resource planning systems. I knew we needed to harmonize these systems, but I dreaded the cost and organizational disruption. Wanting to get this project done before I step down as CEO, I pulled the trigger a few years ago. It was one of the best things we have done. I cannot believe I waited.

• Is your team clear on its mission, vision, values, why, strategic plan and operating plan? If not, there is definitely a need for some oil around these items. Creating clarity is like lubricating the entire organization for years to come.

I made up the story at the beginning of this column, but it’s loosely based on a real encounter between Henry Ford and Charles Steinmetz, once one of the most renowned electrical engineers in the world. Stories like this aren’t rare; they happen more often than we realize.

Be on the lookout for places where your organization may need a drop of oil. It is great to know how to place the drop of oil, but it is much more important to know when and where to put it, and when to do nothing at all. If you determine where to put the oil and at the right time, it will look like your job is easy. That’s OK, it’s the sign of a great leader.

Bill Yeargin is CEO of Correct Craft and the author of eight books, including the best seller, Education of a CEO.