Peter Drucker and Why Companies Fail -- and the Reset Economy

A lot of people have been talking about needing to hit the reset button on business and the economy, but are we really ready for the Reset Economy?

BusinessWeek certainly seems to think so.

It used the term in at least two articles in the current double issue -- averaging, of course, one per week.

But in one article, aside from referring to the new normal -- a term we started using in Jan. 2009 --Paul Laudicina of A.T. Kearney referred to something I found quite interesting:

"Peter Drucker used to say that companies fail not because they do the wrong thing or because they do the right thing poorly, but because they fail to understand a fundamental shift in the theory of business. (GE CEO Jeff) Immelt calls it an economic reset. Drucker called it a change in the theory of business. But you could call it a fundamental transformation. The most important thing any company could or should be doing now to prepare for the post-recession environment is to look at all of the fundamentals and reexamine what changes in the theory of business might mean for their core competencies, for their ability to meet the new consumer demand."