Jan 04, 2012

A Topic We Just Can’t Seem to Abandon

We know we’ve covered the importance of “planned abandonment” before. But as Peter Drucker once wrote, “What has been learned earlier has to be repeated again and again, and applied again; it has to be reaffirmed or else it is forgotten.”

So let us repeat: Abandon stuff, all ye who enter business—products, processes, policies, distribution channels—for everything eventually becomes obsolete. And do so before you want to, let alone before you have to.

When we last addressed this topic, our focus was on Hewlett-Packard. At the time, HP Chief Executive Leo Apotheker had announced a plan to spin off the company’s PC business. We suggested that this might well be a smart move. But this line of thinking was generally met with skepticism—and, in fact, Apotheker was ousted just a few weeks later. The word now is that HP, with Meg Whitman at the helm, will be keeping its PC business after all. [EXPAND More]

For contrast, let’s consider I.B.M. Last weekend, the New York Times published a farewell to its chief executive, Samuel J. Palmisano, who has just stepped down after nearly a decade of leading the company. The tech giant, the Times declared, has become “so consistently successful, I.B.M. is almost boring.”

But getting there hasn’t been easy. One of Palmisano’s toughest decisions, in fact, was to exit the PC business. The company sold it off to Lenovo of China in 2004. “If you decide you’re going to move to a different space, where there’s innovation and therefore you can do unique things and get some premium for that, the PC business wasn’t going to be it,” Palmisano told the Times.

Palmisano’s decision wasn’t popular internally—abandonment, as Drucker noted, always creates “enormous resistance”—but the gamble paid off.

“Abandonment comes first in the turnaround strategy,” Drucker wrote in Post-Capitalist Society. “Until it has been accomplished, nothing else gets done.” [/EXPAND]

What, if anything, should HP (and the rest of us) learn from I.B.M.’s approach to abandonment? 

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