“Archimedes…is reported to have said: “Give me a place to stand on, and I can lift the universe off its hinges.” The place to stand on is the area of concentration. It is the area which gives a business the leverage that lifts the universe off its hinges.”
Abstract: Drucker helps leaders set objectives for marketing, innovation, and productivity. He comments on the need to balance and prioritize objectives through budgeting expenditures. The importance of determining the minimum profit required and measuring profitability. Finally, turning objectives into action through assignments, goals, deadlines, and accountability.
A key point is that a business must decide where it will concentrate its attention and efforts. For example, IBM decided in the mid-twentieth century that it would concentrate on business computation. This decision became its policy and the bedrock of its strategy.
Once a business knows where it will concentrate, once it has a policy, it should decide what its market standing will be. It must pick and focus on a market segment, the product or service, and the value it will provide. Thinking through this is necessary for setting objectives, becoming what the business is in business for, and becoming a market leader.
A business must also determine what innovation it needs for becoming what it should be in the future. To this end, innovation should take place in the product, market behavior, or the activity of making value. Moreover, innovation needs objectives, and the objectives should be determined by marketing requirements as well as what is expected to emerge from advances in technology, both now and in the future. (107)
Productivity objectives and measurements for land, capital, and labor resources are needed. Drucker argues that these resources must become productive together, not one at the cost of the others. Yet, Drucker emphasizes that productive capital is preeminent.
For achieving and measuring productivity, managers must see how the parts contribute to the whole. Drucker calls this contributed value. This concept and what businesses must do to apply it for understanding where to use resources is discussed in the first section of Managing for Results.
(Management, chapter 9)