What today’s organization needs are synthetic sense organs for the outside.
Every social institution exists to contribute to society, economy, and individual. In consequence results exist only on the outside—in economy, in society, and with the customer. It is the customer only who creates a profit. Everything inside a business creates only costs, is only a “cost center.” But results are entrepreneurial. Yet we do not have adequate, let alone reliable, information regarding the “outside.” The century of patient analysis of managerial, inside phenomena, events and data, the century of patient, skillful work on the individual operations and tasks within the business, has no counterpart with respect to the entrepreneurial job. We can easily record and therefore quantify efficiency, that is, efforts. It is of little value to have the most efficient engineering department if it designs the wrong product. And it mattered little, I daresay, during the period of IBM’s great expansion in the fifties and sixties how “efficient” its operations were; its basic entrepreneurial idea was the right, the effective one.
The outside, the area of results, is much less accessible than the inside. The central problem of executives in the large organization is their insulation from the outside. What today’s organization therefore needs are synthetic sense organs for the outside. If modern controls are to make a contribution, it would be, above all, here.
ACTION POINT: Develop a systematic method of collecting critical information on the environment. The information should include knowledge of customer satisfaction, noncustomer buying habits, technological developments, competitors, and relevant government policies.
Management: Tasks, Responsibilities, Practices
* Source: The Daily Drucker by Peter F. Drucker