The form that a product takes is given by the material, equipment, and components of the company. These are provided by the shareholder dimension. The form represents the cost of the product. The form of the product is, therefore, the commitment of the shareholder in action.
But a product is not simply an idea in a form. There must be a demand for the idea before it can be said to be a product, and this is provided by the customer. It is a form that frames the evanescence of an idea, but it is demand that makes it real. By demand we mean need, with the willingness and ability to work, i.e., pay, to have the need satisfied. Through demand the form meshes or fits in with other forms. Through demand a link or interchange is established between the company-as-product and its environment.
The recognition of the product as an idea in a form with a demand, and therefore of the idea being “the central and dominating value” in a company, puts the total human being back into the industrial scene. The perception and realization of an idea is the employee dimension in action. “A business devoted to the identification of central ideas, the formulation of strategies for moving swiftly from ideas to operations, will differ in structure and activity from a company primarily concerned with management of money or physical resources.”
Undoubtedly the major concern in industry to date has been with materials handling. “Human relations” has been addressed to a very large degree to ensuring that people do not get in the way of the material. But to survive in the future the problem for industry will be increasingly one of idea generation. A company could be looked upon as an organism whose primary food is ideas. Ideas originate along the employee dimension. Strictly speaking, however, it will not do to say that men “create” the idea. Man’s creativity is realized in the expression of the idea, in “pressing out” the idea, and so making it fact.
Management by idea is a broader concept than management by objective, or long-range planning. In some of the more advanced industries, top management has defined a “core idea” around which total company effort can be designed, such as ” a shift in the definition of a business from one concerned with the sale of a product to one concerned with the delivery of a complete system of customer values–as in airlines marketing packaged vacations and computer manufacturers marketing systems to solve customer information problems.”
March 29th, 2020 ~ The idea mentioned often in the beginning of the book is poignant in society right now, given the virus outbreak and the shutdown of the economy as we know it. I have wondered about idea, form and demand. What does the consumer demand in how it relates to what I am working on–food, consulting services, and the gig economy. That has been thrown upside down, it seems. Resourcefulness seems like it will be at a premium. The author talks about not only a product but a “business concerned with the delivery of a complete system of customer values.” Stay tuned.