Seth Godin’s Book “The Dip” Save Your Money

Written by Sean Murphy. Posted in Books, skmurphy

There are some good insights in Seth Godin’s The Dip, his slim new volume devoted to excellence, perseverance, and organized abandonment. Godin doesn’t say “organized abandonment” which is a concept developed by Peter Drucker, but “quitting.” Godin offer’s three checks to perform before you quit and backs into the need for a plan with his third:

Three Questions to Ask Before Quitting (pages 66-71)

  1. Am I Panicking? Decide in advance when you are going to quit.
  2. Who Am I Trying to Influence? A person or a market? Markets value persistence far more than an individual.
  3. What Sort of Measurable Progress am I Making?

The key point is to decide what failure looks like before you start (and unexpected success, which for an entrepreneur signals that a product deserves more investment, potentially even third party investment in addition to re-directed internal resources) so that you know when to quit.

Even at $7.77 on Amazon it’s a good blog post stretched out for 75 pages. Spend $13.57 on The Daily Drucker and get 365 one page nuggets of wisdom from Peter Drucker. The entry for March 14 on Universal Entrepreneurial Disciplines might well substitute for most of Godin’s book.

Every institution–and not only business– must build into its day-to-day management four entrepreneurial activities that run in parallel. One is organized abandonment of products, services, processes, markets, distribution channels, and so on that are no longer an optimal allocation of resources. Then, any institution must organize for systematic, continuing improvement. Then it has to organize for systematic and continuous exploitation, especially of its successes. And finally, it has to organize systematic innovation, that is, create the different tomorrow that makes obsolete and, to a large extent, replaces even the most successful products of today in an organization. I emphasize that these disciplines are not just desirable; they are conditions for survival today.

ACTION POINT: Abandon what is about to be obsolete, develop a system to exploit your successes. And develop a systematic approach to innovation.

Drucker wrote about this at greater length in his book Management Challenges for the 21st Century, the chapter on “Change Agents” was run as an article in Inc Magazine and is available free on-line. This excerpt elaborates on his core concept of organized abandonment. This model is especially important for entrepreneurs.

For being a change leader requires the willingness and ability to change what is already being done just as much as the ability to do new and different things. It requires policies and practices that make the present create the future.

Abandon yesterday. The first step for a change leader is to free up resources that are committed to maintaining things that no longer contribute to performance and no longer produce results. Maintaining yesterday is always difficult and extremely time-consuming. Maintaining yesterday always commits the institution’s scarcest and most valuable resources–and above all, its ablest people–to non-results. Yet doing anything differently–let alone innovating–always creates unexpected difficulties. It demands leadership by people of high and proven ability. And if those people are committed to maintaining yesterday, they are simply not available to create tomorrow.

The first change policy, therefore, has to be organized abandonment. The change leader puts every product, every service, every process, every market, every distribution channel, every customer, and every end use on trial for its life. And the change leader does so on a regular schedule. The question it has to ask–and ask seriously–is “If we did not do this already, would we, knowing what we now know, go into it?” If the answer is no, the reaction must not be “Let’s make another study.” The reaction must be “What do we do now?”

In three cases the right action is always outright abandonment:

1. When you think that the product, service, market, or process “still has a few good years of life.” It is the dying products, services, markets, or processes that always demand the greatest care and effort. And we almost always overestimate how much “life” actually is left. Usually, they are not dying; they are dead.

2. When the only argument for keeping a product, service, market, or process is that “it’s fully written off.” To treat assets as being fully written off has its place in tax accounting, but for management the question should never be “What has it cost?” The question should be “What will it produce?”

3. When for the sake of maintaining the old and declining product, service, or process, the new and growing product, service, or process is being stunted or neglected.

For every product, service, market, or process, the change leader must also ask, “If we were to go into this now, knowing what we now know, would we go into it in the same way we are doing it now?” And that question needs to be asked about the successful products, services, markets, and processes as regularly–and as seriously–as about the unsuccessful products, services, markets, and processes. It applies with particular force to distributors and distribution channels, which, in a time of rapid change, tend to change faster than anything else.

From a career planning perspective (and a management perspective), the two book set by Marcus BuckinghamFirst, Break All The Rules” and “Now, Discover Your Strengths” focus on discovering and building on your unique strengths to achieve personal excellence.

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