What Peter Drucker Would Be Reading
Recent selections from around the web that, we think, would have caught Peter Drucker’s eye:
1. CVS’s Decision to Dump Tobacco Delivers on Its Brand: Exiting the business of selling tobacco was a wise and brilliant move on the part of CVS, says Scott Davis in Forbes. “The best companies ensure that every customer touchpoint is always on-brand,” Davis writes. “CVS recast itself as a ‘pharmacy innovation company’ that every day is ‘working to make health care better.’” That means chucking the Lucky Strikes, which is $2 billion less in revenue, but “it’s an unprecedented move and one that is wickedly smart.”
2. Raising the Minimum Wage: A McDonald’s-Killer, Not a McJobs-Killer: Everybody wants to raise the minimum wage nowadays. In The Atlantic, Jordan Weissmann takes a look at a new working paper from the Federal Reserve, which suggests that minimum wage requirements kill off less productive businesses and replace them with more productive ones. “So if management is used to paying its cashiers and fry cooks $7.25 an hour, it might never figure out how to clear a profit while paying them $9,” he writes. “A new burger joint, on the other hand, can set itself up to earn money immediately (and take advantage of the hole in the market left by the failed competition).”
3. Facebook Is About to Lose 80% of Its Users, Study Says: Gather ye billions while ye may. Time’s Sam Frizell flags a study saying that Facebook is set to peter out, with a life cycle that closely mimics that of a disease model. Frizell summarizes: “Updating traditional models on disease spread to assume that ‘recovery’ requires contact with a nondiseased member—i.e., a nonuser of Facebook (‘recovered’ member of the population) — researchers predicted that Facebook would see a rapid decline, causing the site to lose 80% of its peak user base between 2015 and 2017.”
4. Dx Comment of the Week: Last week, when we asked readers what they thought of Bill Gates returning to a more active role at Microsoft, Maverick 18 had this concise reply:
Whether or not Bill Gates will be worthwhile as a technical advisor to Microsoft may depend entirely on whether Satya Nadella is entirely free to reject his advice.