Customer Speak – A Marketing Blog from Bridgz Marketing Group

Back to the Future by Bridgz

This blog has extolled often the wisdom and foresight of Peter Drucker, and the lack thereof shown by so many business leaders who have failed to heed his sage advice. Those of us who have followed the long and illustrious career of Drucker — who would have turned a hundred years old this month — have to wonder what the legendary management guru would have to say about the current state of business, on the heels of the most severe economic downturn since the Great Depression.  In all probability he would have said, “I told you so.”

Drucker would have looked not at the greed on Wall Street, the excessive consumerism and lax lending practices, but at the root causes relative to the design of business organizations, structures, processes, leadership and cultures. He would have concluded that business has largely failed to adapt to changing technologies and market shifts due to a lack of innovation and foresight.

That requires a look back to the fundamental purpose of business: delivering true value to the customer, not just making a profit. “Without the customer there is no business.”

Drucker would remind us of the role culture plays in adapting to changes in the marketplace; that employees cannot be controlled but must be engaged and motivated to a higher purpose than meeting financial objectives. He would suggest that business leaders take a lesson from non-profit organizations in defining that higher purpose.

Drucker warned about the dangers of excessive CEO and management compensation, which puts too much focus on quarterly earnings and shareholder wealth rather than customer satisfaction, encouraging short-term business focus and excessive risk-taking.

More than anything, Drucker would observe with great interest to see if companies have learned from the severe economic correction experienced over the past two years, and whether they are taking necessary steps to adapt to a new market order, other than simply cutting costs.

The time for mere corrective measures is past, he would conclude. What is needed now is a transformation to a new business model built for a redefined market in which the customer rules, not the CEO. It’s a shift from push to pull, from distribution to access, from selling to buying, a re-balancing of the profit/value equation in which marketing is the primary driver, not finance and operations. And the aim of marketing is “to know and understand the customer so well that the product or service fits the need and sells itself.”

[Recommended reading: Harvard Business Review, November 2009]

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