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Your Business Has Only One Purpose—Are You Focused on it?

Peter Drucker had an unparalleled ability to capture the essence of what’s important in management. In 1973, he wrote: “Because the purpose of business is to create and keep a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”

We all know, of course, that you can create and keep unprofitable customers and quickly go out of business. But Drucker’s basic point still holds. Your purpose is not to “beat the competition” but rather to create great products and services that meet a client need and then cultivate your client relationships over time.

The question is: Why is it so hard for companies to stay focused on their clients and customers and make the investments that are necessary to create a consistent and differentiated experience for them?

Here are some of the reasons why organizations struggle to remain client-centric:

  1. They have great products and services that practically sell themselves, and so (for a while) they don’t have to worry about client relationships. Eventually, however, the party comes to an end if the service doesn’t catch up with the product.
  2. Being client-centric is difficult and requires constant focus and attention. Creating and keeping clients is not a one-off event, like re-engineering a process. It’s an ongoing challenge.
  3. Relationships are messy and ambiguous—they are part art and part science. People with deep functional expertise are often more comfortable dealing with operational or financial problems.
  4. “Client focus” often becomes just another slogan or at best a one-off event. It is announced with fanfare but six months later some new initiative replaces it—quality, diversity, leadership, international, whatever.
  5. It’s not always easy to quantify the ROI for investments in better client service. It can be done, but often these are strategic investments that take time to yield fruit.
  6. Complacency can set in and management can take their client relationships for granted. They get into a “sustain” or “maintain” mode and stop pushing and trying.
  7. You can manage internal processes from your laptop or office, but dealing with clients often requires you to leave your office and actually go somewhere. “If you want milk you have to leave your house and go out into the barn where the cows are”—but people would rather sit by the fire than go outside, brave the cold, and trudge through the snow to reach the stable. (I’m not comparing clients to cows, just using a colorful metaphor!)
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