It’s Not Rocket Science (adapted from The Daily Drucker 2004)

Keith Starcher
DayStar Consulting, Inc.

In this morning’s sermon, the pastor talked about how to develop an intimate marriage with your spouse and how this was, in some ways, likened to the way you and I develop intimacy with God.  He said, “It’s not rocket science.  Listen to your spouse, talk to your spouse and spend time with your spouse.”

Not bad advice.  And he’s right; it’s not rocket science.  Or as I’ve heard it said, “It’s easy to imagine, but somewhat difficult to actually do.”

The same might be said for Peter Drucker’s concept of the “Theory of the Business.”  Dr. Drucker states that a theory of the business has three parts. 

·        First, there are assumptions about the environment of the business (society, the market, the customer, technology, etc.)

·        Seond, there are assumptions about the specific mission of the organization.

·        Third, one must consider the assumptions about the core competencies of the business.  These are the competencies that are needed to accomplish the mission of the business.

On the surface it appears that the “it’s not rocket science” comment applies to Drucker’s theory of the business.  But if this is how Peter Drucker defines a theory of the business, I must admit to knowing many leaders from many organizations who would not be able to list many of the above assumptions required to define their theory of the business.

Let’s try this for your organization.

What are your current assumptions about the environment in which your organization operates?  Most of us work within a somewhat dynamic environment.  Things are changing all around us.  Who in your organization knows what those changes are and how they might impact your company?  I’m finding that it is a rare organization who has someone on the payroll whose job is to do nothing but scan the environment.  How is the market changing?  What are our competitors doing and why?  Are we fast approaching a legal, societal or technological speed bump that could waylay us?  Who is responsible for doing this within your organization?  I know the common answer: “No one.  We can’t afford it.”  I would suggest that in today’s modern world of hyper-change, you cannot not afford it (double negative thrown in for emphasis).  Companies that endure and grow know what’s going on now in their environment.

When it comes to the specific mission of your organization, think about what you consider to be meaningful results; results that point to how you are making a difference in the economy and society at large.  An effective mission statement makes sense because it identifies the true purpose of the organization—we exist to meet these needs (and wants) in our society.  Think about it this way.  If your organization were gone tomorrow, who would miss you and why?  It’s sort of an “It’s a Wonderful Life” type of question, but for an organization as a whole.  Your organization’s mission must be mindful of what matters to those you serve.  And you must keep in mind that what matters may change over time (think “buggy whip manufacturer).  So what is your organization’s specific mission?  If you have a published mission statement, when was the last time you reviewed it in light of any new assumptions about your environment?

Dr. Drucker explains that core competencies “define where an organization must excel in order to maintain leadership.”   Take a moment and list three of your organization’s core competencies and how they have helped you maintain leadership in your industry.  What are you doing to continuously improve these competencies?  When was the last time you reviewed your competencies in light of your changing environment (and mission)?  One example of a company who did not do this comes to mind—Dell.  One of Dell’s premier core competencies revolved around its “direct-to-customer” sales model and the neccesary logistical expertise behind it.  This model worked great with corporate customers but individual consumers began to like seeing what they bought before they bought it.  The market changed.  Dell got caught flat-footed and is now playing catch up (with HP) in the marketplace.   

Bottom Line

Someone in your organization has to understand the assumptions about your:

·        Environment

·        Specific Mission

·        Core Competencies

And that person must revisit these assumptions on a regular basis.  This is not “rocket science.”  But it is difficult to do.  It’s much easier to focus resources solely on today’s customer and today’s market and today’s competition.

Peter Drucker states that “every one of the great business builders we know of had a definite idea, a clear theory of the business, that informed his actions and decisions.  A clear, simple and penetrating theory of the business, rather than intuition, characterizes the truly successful entrepreneur.”

What will you do today to create or re-evaluate your “theory of the business?”

Keith

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