When I’ve got my teacher hat on I like to quote Drucker’s definition of business purpose. “The purpose of a business is to create a customer”. The reaction to this statement is usually very strong. I get a lot of “What planet R U from” stares” and retorts like “Today’s world is about profits and maximizing shareholder value”.
I love Roger Martin’s new book because he provides a very articulate response to why Drucker’s business purpose is more relevant than ever 🙂 It is great to hear Martin clearly articulate that “focussing on the customer” provides better shareholder value than “maximizing shareholder value”. He provides a clear life choice response and a clear “numbers-based” view.
My usual response is quite weak. I think that it is very hard for employees to know what action to take with “maximizing share holder value” vs “creating a customer”. Also that “maximizing share holder value” forces one to become hostile to their community with “business decisions” and therefore is not something one can be “proud” of long term. Basically, “creating a customer” provides for superior personal satisfaction and life choices. I like how Martin supports these views and provides some “hard” numbers data to back it up.