Analysis of Business

The analysis of the business; its result areas, its revenues, its resources allocation & leadership position, its cost centres & cost structure, answers the question:
* How are we doing?
* But how do we know whether we are doing the right things?
* What, in other words, is our business - & what should it be?

This question calls for a different analysis, an analysis that looks at the business from the outside.

Business is a process which converts a resource, distinct knowledge, into a contribution of economic value in the market place. The purpose of a business is to create a customer. The purpose is to provide something for which an independent outsider, who can choose not to buy, is willing to exchange his purchasing power. And knowledge alone (excepting only the case of the complete monopoly) gives the products of any business that leadership position on which success & survival ultimately depend.

People inside a business can rarely be expected to recognize their own distinct knowledge; they take it for granted. What one knows how to do, by & large, comes easy. As a result the people in the business tend to assume, unthinkingly, that there is nothing to their knowledge or special ability, indeed that everybody else must have it too. What looms large on their horizon are the things thay find hard - i.e., the things they are not particularly good at.

Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced.