“…because there are so many different areas of importance, the day-to-day method of management is inadequate even in the smallest and simplest business. Because deterioration is what happens normally–that is, unless somebody counteracts it–there is need for a systematic and purposeful program.”
In this chapter, Drucker begins the second part of the book called “Focus on Opportunity.” By now the analysis of the business has been done. Executives have an understanding of the business’s present health and the direction it should go. Now leadership needs to determine what approach they will use to grow the business.
Drucker provides three methods or “approaches.” The first method defines an ideal business. The second focuses on the best opportunities. The third determines where to put the best resources to achieve results. For each of these methods, Drucker provides a case study.
CEO Alfred P. Sloan, Jr., in the 1920s, designed and orchestrated an entirely new business concept. Instead of producing cars for everyone, he designed and promoted cars for specific markets. His market-based, systematic approach made General Motors the world’s largest car company and manufacturer.
Thomas Edison and Werner von Siemens used the second method. They innovated to create what was necessary to take advantage of opportunities. For Edison, the incandescent light bulb was a key part of a larger strategy to build America’s electric power industry.
The Rothschilds illustrate the final method. They placed top resources–their sons–in locations suited to their strengths. Thus, their strengths were applied and aligned with opportunities for developing the family business.
These methods are not only individual pathways for growth, but they are also integrable. Defining the ideal provides the “target” against which all can be planned and measured. Attending to opportunities enables companies to focus on the innovation necessary for results and economically beneficial tasks. Focusing on resources allows a company to align its best resources with the best opportunities.
This is a brilliant chapter, by reading it, executives gain an understanding of what must be done to develop “a systematic approach” to achieving results.
(Managing for Results, chapter 9)