What's the Purpose?. Peter Drucker said, “Because its purpose is to create a customer, the business has two basic functions: marketing and innovation. Marketing and innovation produce results, all the rest are costs.” [What's Your Brand Mantra?]
It's really funny to see intelligent people argue over the purpose of business. Especially since every business has different objectives. In my own mind, one of the purposes of a business is to create profitable relationships between parties with mutual objectives.
This purpose of business discussion goes on with heated comments on at least three others sites. Let me set the record straight, in regards to business relationships, the purpose of your business is as unique as you are. Choose a purpose that is easily conveyed to employees, customers, and prospective partners.
Businesses exist to make a profit, improve customer relationships, accomplish certain objectives of the owners or members. Perhaps Peter Drucker‘s message was over simplified when he said the purpose of business is “to create a customer.” Customers are part of the picture, but I say, to create profitable relationships.
A business can have profitable relationships through customers, shareholders, and capital investment firms. You may not even have a traditional customers, a larger portion of your revenues may comes from capital investments. However, eventually someone has to buy what you're offering or consume what you produce at a profit to introduce new money into your revenue picture.
To have profitable relationships, you have to interact with the right people. Not all customers are the same– some customers are difficult, cost you money, and don't contribute to enhancing your position in the market place. As an executive you should help your people recognize your businesses unique objectives and teach them how to seek out profitable customers.
What are you doing to build profitable relationships in your business?
Justin Hitt has more than two decades of experience transforming business relationships into profits for clients. Practicing risk and project management in high stakes environments. Featured in Six Sigma Magazine and Greater China CRM. Author of numerous books, reports, and training programs on strategic relations.