First goal of every company should be organized abandonment

Similarly, in the business world, there’s nothing that so focuses a manager’s mind as knowing that a product or service they’ve spent ages building and fine-tuning will be abandoned in a year or six months. Otherwise, he won’t innovate. He’ll delay. Wait and see. Because abandonment is not what we’re trained to do in the office.

We’re a nation of problem-solvers, fixing what doesn’t work instead of building something new. The reason is simple: Innovation is very hard work. You put in years before you see any quantifiable result. Meanwhile, you’re being compensated for this quarter’s performance. So you put more money and more effort into squeaking a little more juice out of the old product.

Peter Drucker, the management sage observed that the first goal of every company should be “organized abandonment.” Simply put, every two or three years, each company needs to look at every product, service, and policy and see if it still makes sense. Ask yourself: “If we didn’t do this already, would we launch this again? Would we go into it?” If the answer is no, it’s time to start cutting.

Easier said than done. The worst offender is the government, which simply cannot abandon anything. But even the smallest of businesses find it difficult. Too often we are so focused on running in maintenance mode that we lose our sense of creativity and our willingness to leave old ideas behind. It’s exactly the wrong thing to do.

Every organization must believe that change is an opportunity, not a threat. That takes hard work, especially these days when financial pressures put many companies into a defensive state.

But it can be done. Look at IBM. In the early 1990s, IBM was a slow and ailing giant. Its complexities were staggering: thousands of hardware products, dozens of manufacturing and fulfillment systems, and a confusing assemblage of business units. CEO Lou Gerstner then envisioned an intensive house-cleaning and “One IBM” strategy. By 1998 Big Blue introduced a centralized strategy.

By 1998 Big Blue introduced a centralized e-business plan called Enterprise Web Management that integrated product development, supply chain management, and customer interfaces. IBM threw out what didn’t fit in and emphasized things that should. It was painful, but it worked. Notes Harvard Business School Professor Rosabeth Moss Kanter, author of Evolve! : “Many people focus on how much money you can make online. It’s the wrong view. They should focus on how much money you can save. IBM understood that.”

Lesson learned: It’s not enough to just embrace the Internet in theory. Living with its consequences is more challenging. Change is never easy. It often hurts. It involves getting rid of as much stuff as you bring in. But sometimes your survival depends upon it.