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The Obsolete Theory

A degenerative disease will not be cured by procrastination. It requires decisive action.

There are, indeed, quite a few CEOs who have successfully changed their theory of the business. The CEO who built Merck into the world’s most successful pharmaceutical business did so by focusing solely on the research and development of patented, high-margin breakthrough drugs, then radically changed the company’s theory by acquiring a large distributor of generic and nonprescription drugs. He did so without a “crisis” while Merck was ostensibly doing very well.

We can’t rely on miracle workers to rejuvenate an obsolete theory of the business. And when one talks to these supposed miracle workers, they deny vehemently that they act by charisma or vision. They start out with diagnosis and analysis. They accept that attaining objectives and rapid growth demand a serious rethinking of the theory of the business. They do not dismiss unexpected failure as the result of a subordinate’s incompetence or as an accident but treat it as a symptom of “systems failure.” They do not take credit for unexpected success but treat it as a challenge to their assumptions. They accept that a theory’s obsolescence is a degenerative and, indeed, life-threatening disease. And they know and accept the surgeon’s time-tested principle, the oldest principle of effective decision-making. A degenerative disease will not be cured by procrastination. It requires decisive action.

ACTION POINT: Is your theory of your business obsolete? If so, don’t procrastinate. Act decisively to analyze and rethink your assumptions and develop an updated theory.

Managing in a Time of Great Change

* Source: The Daily Drucker by Peter F. Drucker

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