What is the purpose of a business?

I ask this question a lot and there’s a surprising amount of confusion about the answer.

The purpose of a business is to create (and keep) a customer.

This is not a new idea of course. Peter Drucker 1st wrote about it in the early 1950’s, but its one that’s so quickly and easily forgotten.

It’s important to get the starting point right.

Every business exists to serve someone else, not itself. To do so we have to care, listen and get out into the marketplace. We have to get close to the customer.

Not, to quote Satya Nadella of Microsoft, as ‘know it alls’, but as ‘learn it alls’. Full of curiosity and wonder.

If this is the purpose of a business, what then is the purpose of your leadership?

To watch the blog … click on the video above

It’s to create the right environment inside the organisation … one where that value to the customer can be delivered.

The environment has to be one where people can thrive and grow. Where we tap into people’s resourcefulness, initiative and creativity. Not merely their diligence and obedience.

We want people to …

  • Think for themselves.
  • Ask questions and to innovate.
  • Solve problems and take charge of what’s in front of them.

Not just to arrive on time and do as they’re told!

This then is the essential formula that has to be enabled by leadership … people working together, to deliver great value, to create and keep the customer.

It starts with the customer. But all 3 have to be in place.

  • We have to know, care about and value the customer.
  • We have to unlock people’s potential and be able to quickly spot and grow talent.
  • And we have to design and deliver things that add value and solve problems.

Doing these 3 things right gives you the right to exist.

It gives you the opportunity to win in the marketplace. And without a marketplace there is no workplace.

The business that is unable to master this simple formula faces a perilous fate. That organisation begins the slippery slide to irrelevance and mediocrity.

It’s a tragic fate actually. So much value and promise laid to waste.

Those that do stand out.

They become attractive, valuable … precious.

Not only do they deliver superior results. They also make a distinctive impact in the world.

Leadership, at every level, as always … makes the difference!

We love to hear from you. Please comment below or mail me at grant@leadershipworks.co.za.

If you’d like to be in touch please call me on +27 82 894 4288 or mail me on grant@leadershipworks.co.za.

Leave A Comment

The LeadershipWorks Blog

Do you want to build a healthy organisation? Do you want to make teamwork your ultimate source of competitive advantage?

Latest Posts