It really doesn’t matter who you read of the serious business thinkers and leaders they will say -The essence of business is the meeting of unmet needs in the market place at a fair value for a fair return.
Konosuki Matsushita the founder of National Panasonic enunciated a set of principles in 1933. The first was:
Service to the Public:
To provide high quality goods and services at reasonable prices, thereby contributing to the well being and happiness of people throughout the world
Peter Drucker posits that:
The purpose a business was to get and keep a customer. He argued that profit was important – but not the reason for being in business – profit was like oxygen – absolutely critical for the business to survive and thrive.
So why is it that business leaders distort this view.
Over many years I have listened to many business leaders discuss this issue – why do we exist – what is our purpose? All variously trying to establish a “genuine” reason for being – for their business? Something beyond “putting” food on the table”- which is often the starting purpose.
There are a number of schools of thought:
This group is fixated on money – and shareholder value or maximizing profit (private company) is the reason for existence as far as they are concerned. This leads to the statements such as the one below.
It’s all about shareholder value. That is why we exist. We need to recognise that and importantly we need to deliver value. (To shareholders!!)
Fin Review Friday the 15th February 2013 (Front Page)
This position is based on GREED – little else!
This group sees their reason for being as being the best or No 1 – it really gives them focus – but it can be limiting. So what happens after you are No 1? There is little evidence that Businesses can sustain high levels if performance over extended periods of time? This model is based on being competitive.
I believe GE under Jack Welsh used this model.
This position is based on Excellence (but egocentric)
This group few in number believe they can make a difference in the world – these are CAUSE driven businesses – The Body Shop – Ben and Jerry’s started out this way. Lulu Lemon more recently! – The initial motivation for these businesses is something beyond money – a much bigger goal driven by a mission to “change the world”!
This position is based on social contribution –(it is intrinsically other centric)
This group is especially motivated by the possibility of making a difference in the life of customers. This group may be closely related to Group 3 – maybe not – it maybe as simple as providing a Service that people need – no great big Dream!
Each of these Businesses, the business leaders has a world view which dominates the thinking in and for the business –and this has a profound influence on everything and everyone in the business
At the very core -these groups can be grouped again into:
1. An Egocentric Focus – a focus on ME and
2. An Other centric focus – someone beyond ME
It is interesting to reflect on the nature of leadership in the business you lead and or work in?
What is the very Core Purpose of the Business?