7/13/2015

#117 Why A Business Exists (2004)

All Rights Reserved © 2004 Thomas W. Day

The MBA folks will tell you that a business exists to make money; period.  Businesses that operate that way don't succeed for long.  Businesses that start out with that simple-minded motivation rarely survive the first year of operation.  So much for what MBAs know about business.

Businesses that succeed serve their customers, first, and profit from that service, second.  Businesses that succeed really well know their customers really well and know exactly how to meet their expectations.  The only way to do that is to set out with the intention of serving a group of customers with a product or service that will meet the needs or desires of those customers.  The word that keeps appearing here is "service." 

Most execs have absolutely no idea how to provide service.  They believe the world was set up to provide services to them, not the other way around.  However, many successful business ventures were started by people who were driven to provide a service and wouldn't let anything, including financial or personal hardship, get between them and the people they intended to serve. 

Bill Gates and his partner dropped out of college and set up shop in a New Mexico Holiday Inn so that they could be close to their first customer, Altair (a long dead, early computer company that provided as little service as possible to its customers).  Their product was a simple version of Basic (a product that Microsquash is still promoting and supporting) that had been specially ported for the Altair's processor and I/O.  It's tough to provide much more service than moving into your customer's backyard and developing the product exactly to their application.

A company I worked for, a decade ago, once filled it's assembly lines with musicians and music lovers because the founder/chief engineer and the rest of the execs had absolutely no idea how to design the professional music products they intended to build.  They were bright enough to hire people who might use the products and would criticize the products until they were right.  Now, that same company has staffed its sales and marketing departments with ex-professional sound engineers who provide the same capability. 

Since then I've been employed by, or temporarily contracted to, a variety of companies, in a variety of industries, that have not managed to develop any sort of corporate service attitude.  I wish I could say the experience has been enlightening, at least, but it's mostly been depressing. 

The fault always lies in the same location; at the top.  CEOs who believe they've paid their dues and deserve royal treatment start the attitude disadvantage.  CFOs, CMOs, UFOs, Vice-Presidents of Nothing Useful, Directors of Nobody, Managers of Managers, and all of the pointless, overblown titles that amount to folks serving no one but themselves and performing no work that benefits the organization follow down the chain of power.  By the time the company's pecking order reaches down to the people who actually perform the function of the business, the business focus is totally blurred. 

Generating a business statement is a pointless exercise in a business where the people who stand to profit the most are completely disassociated from the business activities.  And that's the way smart companies think; the people who gain the most from the business success should work the hardest and smartest.  If the folks at the bottom of the totem pole believe the people at the top are supporting the company's reason to exist, everyone is going in the same direction and the whole can exceed the sum of the parts.  When that happens, it's fun to go to work in the morning.  When it doesn't, the lion's share of paperwork generated on the company printer is resumes.

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