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Adam Smith | February 10, 2016 | Leave a Comment

The Only Business Theory That Works

A well-known business theory is Clayton Christensen’s, disruptive innovation theory, which describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. It’s the theory Apple used to make a dent in Microsoft’s holdings, and it’s the theory Netflix used to dethrone Blockbuster. You can watch the below video to see the theory explained in deeper detail:

If video isn’t working, click this link to watch in browser.

But without these three things, business theories don’t work:

  • Purpose – If you’re in business and don’t know why you do what you do, stop what you are doing, and figure it out. Purpose is what keeps you grounded in what you are doing.
  • Passion – This is the fuel behind the work and it will always be your driving force if you allow it to be.
  • People – A staff who feels appreciated thrives, and clients who feel appreciated buy. People are always the beneficiary of operating a business in the way it should be run.
A staff who feels appreciated thrives, and clients who feel appreciated buy. Click To Tweet

PURPOSE+PASSION+PEOPLE=BUSINESS THEORY THAT WORKS

Management consultant, Peter Drucker, made a huge impact on business and leadership as a whole. His biggest business contribution states that all businesses have theories. He said, “The assumptions that shape any organization’s behavior, dictate its decisions about what to do and what not to do, and define what the organization considers meaningful results. These assumptions are about markets. They are about identifying customers and competitors, their values and behavior. They are about technology and its dynamics, about a company’s strengths and weaknesses. These assumptions are about what a company gets paid for. They are what I call a company’s theory of business.”

In the end, nothing else matters if people, purpose, and passion aren’t in your business theory. Remember that as you’re planning your next move.

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Filed Under: Leadership

Adam Smith

I teach people how to have a greater impact through their work and their time. You can read more about me on my about page.

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Hi, my name is Adam Smith and welcome to asmithblog.com. I am the author of the new book, The Bravest You. Because of my work as an entrepreneur, consultant, writer, and speaker, I have been named a top industry influencer by American Genius. I live with my wife, Jasmine, and three children in Shenandoah, IA.

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