“Dangers and weaknesses indicate where to look for business potential. To convert them from problems into opportunities brings extraordinary results. And sometimes all that is needed to accomplish this transformation is a change in the attitude of the executives.”
According to Drucker, there are three ways to find business opportunities. The key is noticing problems and concerns and turning them into opportunities. While not all businesses can do this–and certainly not easily–threats and challenges not turned into opportunities, remain.
First, whenever there is a “restraint” or a “limitation” on a process, industry, or market, there is business potential: an opportunity for innovation and results. Drucker gives an example of a paper-making company whose profit was limited by waste. The company bought trees, but only a quarter of each tree was used for paper. This was a restraint with business potential.
Second, companies are often out of balance. Their operations, services, resources, or research cannot be maintained by revenue. Moreover, companies often are not big enough to afford the management they need. “Imbalances” require executives to reimagine their businesses. One manufacturing company with national sales operations did not make sufficient revenue, so it decided to become a distributor. This quintupled sales.
Third, fear is a sign of opportunity. Drucker gives the example of the emergence of discount stores, spurring many department stores to start their own, without much success. One company did the opposite. They “upgraded” their quality and thus increased the demand for their products.
Interestingly, Drucker observes through case studies that “outsiders” are often the ones who turn problems into opportunities. They lack a vested interest in maintaining the status quo.
(Managing for Results, chapter 10)