President & CEO Melissa Berman explains why we need a “Theory of the Foundation” and what it must include.
“Just over 20 years ago, the iconic management expert Peter F. Drucker published an article in Harvard Business Review entitled “The Theory of the Business.” The essay called for leaders to stop focusing on what Drucker labeled “how to do” techniques, and instead think about three fundamental sets of assumptions related to the organization’s environment,mission, and core competencies. Together, Drucker argued, these assumptions create a “theory of the business.” Importantly, he noted that all organizations, not just corporations, need a “clear, consistent, and valid” theory to succeed. He also pointed out that they need to regularly assess and adjust this theory in response to changing conditions.”
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