As many of my readers know, I am a Peter Drucker fan. You will also know that I keep looking at "Modelling" as a business within AAC / Nielsen.
Drucker felt strongly that we should challenge our business model and its underlying assumptions frequently - like so:
• What assumptions are we making about (1) the environment, (2) our mission and (3) the core competencies that we need?
• Do the assumptions in all three areas fit each other?
• Is the theory of the business known and understood by everybody?
• Is the theory tested constantly - and altered if necessary?
Even if your answers are four resounding cries of Yes!, the theory of the business won’t last forever. Drucker was fully aware that change is inevitable, like it or not: ‘A theory of the business always becomes obsolete when an organisation attains its original objectives’. That’s why he advised use of ‘abandonment’ - meaning that every three years you should challenge every product, service, policy and distribution channel with the question, ‘If we were not in it already, would we be going into it now?’ - the self-same question that led to the revolution at GE. But Drucker adds three more
queries:
• Why didn’t this work, even though it looked so promising when we went into it five years ago?
• Is it because we made a mistake?
• Is it because we did the wrong things?
• Or is it because the right things didn’t work?
Note the simplicity of the questions – Drucker believed in making himself understood. He also insisted that preventing collapse required studying the customers - and, very important, the non-customers: ‘The first signs of fundamental change rarely appear within one’s own organisation or among one’s own customers’.
• What assumptions are we making about (1) the environment, (2) our mission and (3) the core competencies that we need?
• Do the assumptions in all three areas fit each other?
• Is the theory of the business known and understood by everybody?
• Is the theory tested constantly - and altered if necessary?
Even if your answers are four resounding cries of Yes!, the theory of the business won’t last forever. Drucker was fully aware that change is inevitable, like it or not: ‘A theory of the business always becomes obsolete when an organisation attains its original objectives’. That’s why he advised use of ‘abandonment’ - meaning that every three years you should challenge every product, service, policy and distribution channel with the question, ‘If we were not in it already, would we be going into it now?’ - the self-same question that led to the revolution at GE. But Drucker adds three more
queries:
• Why didn’t this work, even though it looked so promising when we went into it five years ago?
• Is it because we made a mistake?
• Is it because we did the wrong things?
• Or is it because the right things didn’t work?
Note the simplicity of the questions – Drucker believed in making himself understood. He also insisted that preventing collapse required studying the customers - and, very important, the non-customers: ‘The first signs of fundamental change rarely appear within one’s own organisation or among one’s own customers’.
