A Class with Drucker - Headway | Work on yourself

62 ■ A CLASS WITH DRUCKER
quoted former GE Chairman Jack Welch. Welch credited <strong>Drucker</strong> <strong>with</strong>
helping him to understand what to do in order to restructure his giant
company, a company that was in many disparate businesses conducted in
many different geographical locations around the world.
I’ve mentioned this previously, but it is worthwhile repeating here
because it reinforces the value of ignorance. Most consultants would not
have done what <strong>Drucker</strong> did. They probably would have begun an expensive
and lengthy study of the organization and structure of GE and the
location, nature, and profitability of these varied businesses. <strong>Drucker</strong> cut
right to the heart of the issue. He didn’t know much about GE or its businesses,
but he did know that it was a mess and required a simplifying
process. According to Welch, <strong>Drucker</strong> asked only: “If you weren’t already
in a business, would you enter it today? And if not, what are you going to
do about it?” Welch’s comment to his interviewer for the article was:
“Simple, right? But incredibly powerful.” 1
Coming from a position of his ignorance about GE, <strong>Drucker</strong> had asked
two questions that caused Welch to analyze GE businesses using <strong>Drucker</strong>’s
questions as a starting point. Welch had to answer the primary question
and then come up <strong>with</strong> a decision to act, or a conscious decision not to act.
Welch decided that if GE couldn’t be number one or two in the marketplace
for any business, he would never have chosen to enter the business in
the first place. He gathered the information he needed to determine whether
GE could become first or second in the market in each business. Using these
criteria, he ruthlessly dropped businesses that he would not have chosen to
enter. As a result of this pruning, GE became much more efficient and concentrated
its resources on those businesses which it could really exploit. GE
became more efficient and effective, and its stock began to skyrocket. This
helped to make Welch’s reputation as one of America’s most effective and
celebrated executives. Not bad for starting <strong>with</strong> a little ignorance.
Analyzing <strong>Drucker</strong>’s Lesson
At the time of <strong>Drucker</strong>’s lesson, I knew I was on to something profound,
and so I jotted down a few quick notes about approaching a problem primarily
<strong>with</strong> ignorance for later consideration. Then I transferred my attention
to the new topic <strong>Drucker</strong> had already embarked upon.
Later, back home, I began to think about how to apply what <strong>Drucker</strong>
had said regarding what managers should do in applying their ignorance to
problem situations. I knew that <strong>Drucker</strong> didn’t mean to exclude one’s prior