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. 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. Critical thinking is a business improvement practice. It is a process that can be used by all leadership teams to overcome the egocentrism that can stand in the way of authentic assessment of the current state of their business.

1. © 2004 Walter Adamson
Keywords: managing change; strategy; critical thinking; management team;
distribution channels.
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.
Critical thinking is a business improvement practice. It is a process that can be used by all
leadership teams to overcome the egocentrism that can stand in the way of authentic
assessment of the current state of their business.
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.
Breaking Down the Barriers to Exit using Critical Thinking
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 quot;the real difficulty lies not in developing new ideas but
in escaping from old onesquot;.
For example, the travel industry is changing faster than most, not only 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 web-
based self-service where in Australia 80% of Virgin Blue’s bookings come
from the internet, and of course net fares, travel agent consolidation and the
challenges facing the global travel distribution systems in defining and
marketing their value-add.
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2. © 2004 Walter Adamson
The travel industry is by no means alone, and IT, telecoms, pharmaceuticals,
advertising, and even retailing to name but a few are all undergoing rapid
structural change.
Pay Close Attention to Distribution Channels
Peter Drucker urges every business to pay very close attention to distributors
and distribution channels quot;for these tend to change faster than anything elsequot;.
This advice is not news to the travel industry, but comes as a surprise to
players in many other industries, such as telecommunications.
And it is even more compelling advice in a period of rapid structural change.
All 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.
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.
You need to abandon lines of business.
Drucker's famous concept of organised abandonment is built around this
critical question:
quot;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?quot;
If the answer is quot;noquot; 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. People have
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3. © 2004 Walter Adamson
an emotional attachment people to lines of business that they have created –
and this has to be worked through.
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?
In this context the verb “can” means “are we able to in our cultural context,
within the context of our management team and its ability to hold this kind of
discussion openly and honestly?”
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 above - is re-asked by
the team as part of the cycle of critical thinking, and that you make the
commitment to action as necessary.
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4. © 2004 Walter Adamson
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 abandonment the leadership teams has a
better than average chance of keeping your company aligned 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.
Walter Adamson is the Founder of Digital Investor, based in Melbourne, Australia, where
he helps IT and telco service companies design more effective value models and strategic
partnerships. He is also an advisor to investors in IT companies and is an Advisor to the
ICT Strategy Board of the Government of Victoria. He can be reached at
adamson@digitalinvestor.com.au and phone +61-403-345-632, website
www.digitalinvestor.com.au Skype: walter
adamson@digitalinvestor.com.au Page 4 Skype: walter
www.digitalinvestor.com.au Melbourne, Australia