Fitting together Mission, Core Competencies and Business Environment
Management guru Peter Drucker has written that a ‘Theory of the Business’ must make assumptions about
- the business environment,
- the specific mission of the company or organisation, and
- the core competencies needed to accomplish the mission.
Assumptions about the business environment, society, the market, customers and technology define what customers want and what the company is paid for.
Assumptions about the specific mission of the company define what should be considered meaningful results.
Assumptions about the core competencies needed to accomplish the mission define what the organisation needs to excel at in order to maintain leadership.
The specification of a VALID Theory of the Business is as follows:
- Assumptions must fit reality.
- Assumptions in all three areas must fit each other.
- The Theory must be known and understood throughout the organisation.
- The Theory of the Business must be tested constantly.
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