“The right answers are the result of asking the right questions.”
Drucker provides a case study of Sears Roebuck to illustrate managing business performance. He covers the decisions and innovations of the 20th century’s greatest retail company, showing what leaders did to strategically reinvent the company three times in fifty years to become the preeminent leader of mass-market goods.
Key to Sears’s performance was its knowledge of the population and mass market. Realizing that farmers were under-serviced due to their distance from towns but that they desired quality goods, Sears developed merchandise sources, invented the mail-order catalog, and offered a money-back guarantee, gaining them the trust and business of farmers. Eventually, automobiles and suburbs altered demands, and Sears transitioned to retail stores, providing high-quality, affordable goods. Finally, after World War II, Sears became the primary retail choice for the American middle class.
Interestingly, by the 1970s, the rise of knowledge workers required a fundamental change to Sears’s business, but Drucker understood that this would prove difficult for Sears as knowledge workers wanted information, education, and leisure over goods.
Overall, Sears’s brilliant history and business success came down to asking the right questions about the market.
(Management, chapter 5)