"The most difficult and most important decisions in respect to objectives are not what to do. They are, 1st, what to abandon as no longer worthwhile, and 2nd, what to give priority and concentrate on..."
While I would like to take credit for the example I'm about to give you, it is purely coincidence that it works so well. I wrote on another blog today on the condition of the music industry and the growing digital music marketplace.
There is probably no better case study for an entire industry that got things wrong than the music industry over the last years.
Everything Drucker says here applies to how they responded to the changing market they served. How did they respond? They didn't! That's why they're in such terrible shape today; and they continue to respond slowly, hoping to stave things off long enough to somehow make up for the drop in CD sales.
The problem, as described here by Drucker, starts with what not to do. Using the music industry again, they simply refused to accept that CDs were no longer the preferred way consumers wanted to listen to music. So in a typical response that many businesses and industries make, they circled the wagons and put their time and resources into preserving what was temporarily working, even though the trend had already revealed it was changing.
They were afraid to make the tough decisions they had to make, which was, as Drucker says, deciding on what needs to be abandoned. Obviously we're talking in focus and allocation of funds, not completely dropping it in a day. While the industry is starting to get it, they're still trying to hold on to CD sales, and not focusing on where the future is.
That leads to the second point of Drucker on what we need to give our attention to. The attention of the music industry, overall, should be on nothing but digital sales and strategies. Any of the businesses could have a department that works with CD sales. It's not like they'll completely go away anytime soon; but it's not the future of the industry.
In a sense, when Steve Jobs introduced the iPod and downloadable music, he did what the music industry refused to do: offer consumers what they wanted.
What's amazing about all of this, is there wasn't confusion on where things were heading. The industry was so embedded in their ways of doing things, that they became paralyzed as they watched themselves being acted upon, and could only see piracy as the problem, rather than their business model. They're still trying to have things both ways in focus, and they shouldn't.
Digital music sales are exploding; not because of them, but in spite of them. That continues to be a problem.
What does any industry or business need to do in these types of situations? According to Drucker, they need to clearly define the alternatives available. During the process of that definition, all emotion and opinion needs to be set aside and only the defined alternatives looked at.
Disney was faced with a similar situation in the last two years. They simply made the decision to fully embrace the Internet as a major media force, and plunged into it. They didn't try to save what they were doing, but they developed alternatives, put them into operation, and adjusted on the fly.
They're still in the midst of it all, but they've been doing great. Online movie sales have soared, and a number of online initiatives have been extremely successful.
The point in this isn't the Internet, but understanding that we will be continually be faced with these circumstances in the fast-paced business climate we live in. We need to ask ourselves on a consistent basis if what we're working on is still what needs to be worked on, and if not, where should we concentrate and set our priorities.
When we answer these questions, then we simply look at our alternatives in a detached way, and then respond with the best, current information we have.
Other Peter Drucker Resources:
The Man Who Invented Management
Beyond the Information Revolution
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