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Breaking down the Barriers to Exit

using Critical Thinking

Insight by Walter Adamson

When organisations are in a state of change, whether forced or


planned, one of the most difficult breakthroughs to achieve is not
getting into something new but letting go of something old.

In many industries breaking down the barriers to exit is now a critical


management competence. Not to change is to go backwards – at an
alarming rate.

On the other hand, those who master change leadership will be the
survivors.

As John Maynard Keynes said “the real For example, the IT industry is
difficulty lies not in developing new ideas changing faster than most, not only
but in escaping from old ones”. in its technology, but more
importantly in its ways of going
to market and the ways
customers are buying.

The ways of going to market are changing enormously, for example


Gartner predicts that trend for IT services providers to sell their
services “either to, through, or with other IT services providers” is on
the rise. Customers are buying differently for a whole range of
reasons, including the tight economic circumstances, the reigning in
of the CIO by the CFO, and the concentration on making previous
software implementations deliver business value.

The IT industry is by no means alone, and pharmaceuticals, airlines,


advertising, and even retailing to name but a few are all undergoing
rapid structural change.

Peter Drucker urges every business to pay very close attention to


distributors and distribution channels “for these tend to change faster
than anything else”. This is even more compelling advice in a period
of rapid structural change. Firms need to redesign their alliances and
channels from a current strategic perspective.

You need to understand your own strategic processes and mission-


enabling but non-core processes. You also need to clearly identify
your customer value segments and commitments, and how to align
the organisation to deliver those commitments profitably.

And, you need to abandon lines of business. What seemed like a


good business once is now a liability. The challenge is to
abandon those liabilities, and to do it efficiently and effectively.
adamson@digitalinvestor.com.au
www.digitalinvestor.com.au
Digital Investor | Melbourne VIC Australia | Tel: +61 403 345 632
©2003 Walter Adamson
Breaking down the Barriers to Exit using Critical Thinking
Walter Adamson
Page 2

Drucker’s famous concept of organised abandonment is built around


this critical question:

• “If we did not do this already would we, knowing what we know
now, go into it. And would we go into it the way we are doing it
now?”

If the answer is “no” then as an effective change leader you must


commit to action: to abandon the product or service and
aggressively install a new one in its place.

This is easier said than done, and many management teams


experience difficulty in facing up to the authentic state of their
various lines of business. This is not only for factual reasons, where
the numbers may not reflect the underlying structural time bomb, but
also for emotional reasons.

Using Critical Thinking

By using a technique called critical thinking your team can facilitate


their way through the process of coming to a more realistic
appreciation of what has to be abandoned.

This approach of critical thinking aims to overcome the egocentrism


that can stand in the way of authentic assessment of the current state
of your business.

The approach is for the leadership team to develop the habit of


analysing the logic of their own thinking, primarily by asking the
following questions of themselves:

1. Can we analyse our goals and purposes (for this line of


business)?
2. Can we question the way we define problems and issues?
3. Can we assess the information base for our thinking on this
matter?
4. Can we rethink our previous conclusions and interpretations?
5. Can we analyse the ideas and concepts that we are using in our
thinking?
6. Can we identify and check our assumptions?
7. Can we analyse our point of view?
8. Can we follow through on the implication of our thinking?

©2003 Walter Adamson


Breaking down the Barriers to Exit using Critical Thinking
Walter Adamson
Page 3

The questions do not exist in isolation but in relation to each other. It


is important not to be too particular or over-logical – there will be
redundancy between questions.

The point is that by your team developing the technique of


thinking in this way and activating their knowledge discovery real
progress will be made about the strength of the business.

Real progress will also be made in executing organised abandonment


provided that the fundamental question - the Drucker question on
the previous page - is re-asked by the team as part of the cycle of
critical thinking, and that you make the commitment to action as
necessary.

Bear in mind that the team’s objective is not to focus on problems. It


is exactly the opposite – to starve problems of more attention and
time, and to feed new opportunities (also identified through the
application of critical thinking to customer value models). Starve
the problems and commit to abandon them.

By following a process of organised If there is one important message to


abandonment the leadership teams take from this paper it is this: learn
has a better than average chance this technique in order to escape
of keeping your company aligned from the group definitions of reality.
with your chosen customer
segments and value propositions.

Summary

Because the value propositions for chosen segments often change


faster than the organisational alignment serving those segments
there are inevitably lines of business that need to be periodically
abandoned.

While the glamour of strategy focuses on developing new services,


the practice of abandonment is often neglected.

By applying the approach of critical thinking your leadership team can


regain the front foot.

Digital Investor is a consultancy based in Melbourne Australia,


focused on business consulting for IT service companies and their
clients. Readers interested in progressing the facilitation of ideas in
this paper should contact Walter to arrange further discussions or an
interview to fully explore action steps.

©2003 Walter Adamson


Breaking down the Barriers to Exit using Critical Thinking
Walter Adamson
Page 4

Phone: +61 403 345 632 or email: adamson@digitalinvestor.com.au


www.digitalinvestor.com.au

©2003 Walter Adamson