Page 210 - The Drucker Lectures

The Changing World Economy [ 191

Within the next 10 years the internal data system is bound
to change drastically. One reason is that the accounting system
on which most of us in management still rely reports on a legal
fiction, the legal enterprise. Even the biggest enterprise rarely
occupies more than one-third of the economic chain, from the
supplier to the customer. And yet all the information executives
now get about the company is internal. Accounting is about to
change drastically, more than it has changed since GM and GE
first developed cost accounting almost 80 years ago.
But even with all the changes ahead, the accounting infor-
mation will still be primarily about things that happen inside.
But when you look at where the changes have come from in any
industry these last 50 years, not one of them since World War II
has come from inside that industry. They’ve all come from the
outside, and most of them have come from noncustomers and
from people who never before were considered competitors. An
example: One of my friends from a major pharmaceutical com-
pany simply did not know that the basic changes in health-care
delivery are in medical electronics and not in pharmaceuticals.
This company’s executives had all the data about the pharma-
ceutical market until it slipped away from them. They simply did
not know that such things as genetics, molecular chemistry, or
medical electronics existed. They were pharmacologists.
That is true of commercial banking, as well. It’s true even of
colleges and universities. And very few of us have any informa-
tion about the outside. And so a basic challenge for the indi-
vidual executive in the individual business is to start managing
information.
When computers first came in, I had a client whose name
was IBM. I was the consultant to a brilliant task force looking
at the computer age. These were the early 1950s. And I was
one of the few people at the time who saw that the computer
would make a very real difference and would be more than just