The management guru Peter Drucker always recommends that
you examine every part of your business regularly to determine
if there is anything that you are doing that you wouldn’t
get into again today if you had it to do over. I call this the
process of “zero-based thinking.” It is one of the most important
thinking tools you can use to remain fluid and flexible in a
fast-changing environment.
Apply the following question to every part of your business:
“Is there anything that I am doing today that, knowing what I
now know, I wouldn’t get into again today if I had to do it over?”
This is what I call a “KWYNK Analysis.” KWYNK stands for
“Knowing What You Now Know.” Asking and answering this
question of everything you do can save or gain you enormous
amounts of time and money.
Start with your products or services. Is there any product
or service that you are offering that, knowing what you now
know, you wouldn’t bring to the marketplace?
The Principle of Maneuver—Remain Flexible at All Times
Investments in managerial ego are often the main obstacle
to discontinuing a product or service that is obviously unsuccessful.
This happens because people become confused over the
difference between variable costs and sunk costs. People
become determined to recoup the costs of bringing a product to
the market because they don’t realize that those are sunk costs.
A sunk cost is an amount that you have spent that is irretrievable.
It is gone forever. You can never get it back.
Sunk cost has yielded a profitable product or service as the
result of research, development, production, sales, and marketing,
you are fortunate. You must face the fact that most
products eventually fail, no matter how much intelligence and
research has gone into developing them in the first place.
Be willing to admit that your business is full of sunk costs.
Be willing to “cut your losses” if you are currently promoting a
product or service that the market does not particularly want
or is not willing to pay for.
Focus on the product and service
opportunities of tomorrow rather than on the problem products
or services of yesterday. Focus on the products and services
that yield the very highest profits, and commit more of
your resources to selling more of these products or services
into your current market before it changes.
