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The Entrepreneurial Business 153

egy by the Harvard Business School professor Michael Porter; and so-
called portfolio management.*
In the strategies that have been widely advertised these last ten years,
especially portfolio management, the findings of such analysis constitute an
action program by themselves. This is a misunderstanding and bound to lead
to disappointing results, as a good many companies found out when they
rushed into such strategies in the late 1970s and early 1980s. The findings
should lead to a diagnosis. This in turn requires judgment. It requires knowl-
edge of the business, of its products, its markets, its customers, its technolo-
gies. It requires experience rather than analysis alone. The idea that bright
young people straight from business school and equipped only with sharp
analytical tools could crunch out of their computer life-and-death decisions
about businesses, products, and markets is pure quackery, to be blunt.
This analysis (in Managing for Results, I called it a “Business X-
Ray”) is intended as a tool to find the right questions rather than a
way automatically to come up with the right answers. It is a challenge
to all the knowledge that can be found in a given company, and all the
experience. It will—and should—provoke dissent. The action that
follows from classifying this or that product as “today’s breadwinner”
is a risk-taking decision. And so is what to do with the product that is
on the point of becoming “yesterday’s breadwinner,” or with an
“unjustified specialty,” or with an “investment in managerial ego.”†
3. The Business X-Ray furnishes the information needed to define how
much innovation a given business requires, in what areas, and within what time
frame. The best and simplest approach to this was developed by Michael J.
Kami as a member of the Entrepreneurship Seminar at the New York University
Graduate Business School in the 1950s. Kami first applied his approach to IBM,
where he served as head of business planning; and then, in the early 1960s, to
Xerox, where he served for several years in a similar capacity.
In this approach a company lists each of its products or services, but

*A1l these approaches have their origin in a book of mine published twenty years
ago, Managing for Results (New York: Harper & Row, 1964), the first systematic
work on business strategy, to my knowledge. This in turn grew out of the
Entrepreneurship Seminar I ran in the late fifties at New York University. The analy-
sis presented in Managing for Results (Chapters 1—5), with its ranking of all prod-
ucts and services into a small number of categories according to their performance,
characteristics, and life expectancies, is still a useful tool for the analysis of product-
life and product-health.
†For a definition of these terms, see Managing for Results, especially Chapter 4,
How Are We Doing?, pp. 51-68.