The Drucker Series: Knowledge external to the enterprise

The Daily Drucker Series: Test of Innovation
March 2, 2018
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3 MARCH
Knowledge external to the enterprise
The technologies that are likely to have the greatest impact on a company and an industry are technologies outside its own field.
Many changes that have transformed enterprises have originated outside the specific industry of that enterprise. Here are three notable examples. The zipper was originally intended to close bales of heavy goods such as grain, particularly in seaports. Nobody thought of using it for clothing. The clothing industry did not think it could replace buttons. And the inventor never dreamed it would be successful in the clothing industry.
Commercial paper (that is, short term notes originated by nonbank financial institutions) and did not originate with banks, but had a tremendous negative impact on them. Under US law, commercial paper is considered a security, which means that commercial banks cannot deal in it. Because financial services companies, such as Goldman Sachs, Merrill Lynch, GE Capital, and so on, discovered this, they have largely replaced commercial banks as the worlds most important and leading financial instutions. Fiberglass cable, the invention that has revolutionised the telephone industry, did not come out of the great telephone research labs in the US, Japan or Germany. It came, rather, from a glass company, Corning.
 
ACTION POINT: Identify at least one change that has originated outside your industry that either has transformed or has the potential to transform your enterprise. Look for ideas in other industries that can be used profitably in your industry.
 
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