What is the purpose of a business?
Focus, focus, focus on the customer.
There are five fundamental components to a business, in descending order of importance:
Of course there are other critical, necessary, and supporting elements – environment, processes, infrastructure, etc – but those five aspects define a business from a lemonade stand to a Fortune 100 multinational. Each one has a different viewpoint on what the business means to them, and as a business executive, manager or operator (who also is a part of one or more of those categories) it is imperative to consider them in the right framework. A successful business will create positive outcomes for all stakeholders, led by the customer orientation.
The weighting of specific stakeholders may change over time except for one – customers. There are two reasons why customers retain the prime ranking.
The first is that the customer is the only reason for a business to exist.
“The purpose of business is to create and keep a customer.” – Peter Drucker
It’s a simple concept, but since Peter Drucker first said it in 1954 we’re still figuring out how to achieve it effectively and live it every day.
Are you focused on your customers, aligning your employees, products, suppliers, and shareholders to create and keep them? This purpose and goal have to be supported every day by action, in ways that your customers can feel.
The second is that customers, and customer choices, change the fastest of any of the five components.
Be closest to what changes fastest, or lose to whoever is. Close in terms of proximity, close in terms of knowledge, and close in terms of experience, to set direction and react to changes as they happen.