Drucker On The Collective Memeplex

Peter Drucker, one of the most influential management thinkers of the 20th century, had a lot to say about collective assumptions and beliefs in business. In his opinion, these elements are often deeply foundational to an organisation’s culture, influencing its strategy, operations and performance.

Drucker argued that the assumptions and beliefs shaping a business’s actions aren’t always explicit. They’re often unconscious, becoming part of the organisation’s culture. He referred to these implicit beliefs as the “theory of the business”. According to him, every organisation, whether it knows it or not, operates on such a theory.

For Drucker, this theory was essentially a set of assumptions about what a company gets paid for. It’s about understanding the reality of the business, its markets, its customers, its core competencies, and its societal role. These assumptions guide behaviour, decisions, and the direction of the organisation. They set boundaries and establish guidelines within which decisions are made and actions are taken.

However, Drucker warned of the dangers of clinging too tightly to these assumptions. He believed that businesses get into trouble when their environments shift but their theories of the business don’t. This, he argued, is why innovation and ongoing analysis are critical. Companies must continually question their assumptions, keeping them in line with changing realities.

He also believed that it’s important for these collective assumptions and beliefs to be shared across the organisation. If employees don’t understand or don’t buy into these beliefs, there’s likely to be confusion, inefficiency, and a lack of coordination. This can result in subpar performance.

In sum, for Drucker, collective assumptions and beliefs play a crucial role in shaping an organisation’s actions and performance. However, businesses must also be ready to challenge and adapt these assumptions as conditions change, ensuring that their theory of the business remains relevant and effective.