“To be able to do something well as others is not enough…It does not give the leadership position without which a business is doomed. Only excellence earns a profit; the only genuine profit is that of the innovator.”
Without knowledge, an organization will perish. Knowledge is the critical resource that differentiates a company from others. Management is responsible for understanding what it is so that it can be used, maintained, and adapted.
Drucker, in this chapter, explains knowledge analysis. How to understand what one’s knowledge area is, the nature of this knowledge, and what must be done to maintain and use it well.
For a company to understand its knowledge area, it should ask: “What have we done well–and without any sense of great strain–while somebody else has failed to do the same job?” Drucker sees this as a critical question. Without confronting it organizations risk closure.
The purpose of accurate knowledge is to focus on the right opportunities, to become a leader in the market, and to understand what improvement is needed.
One executive dedicated a quarterly meeting to knowledge analysis, asking his team “Have our recent experiences borne out our previous conclusions that this particular ability gives us leadership?” (118)
(Managing for Results, chapter 7)