Misguided virtue or fundamental purpose?

Gary Dean
Gary Dean

By Gary Dean, managing director of strategic consultancy, The Truffle Pig Consulting Co.

Way back in 1954, Peter Drucker wrote ‘a company’s primary responsibility is to serve its customers… profit is not the primary goal but rather an essential condition for the company’s continued existence [ in order to continue to fulfil its responsibility]’.

For me this idea is helped by understanding and then distinguishing maximising shareholder (or rather, I prefer stakeholder) value rather than maximising short term profit and thereby understanding how powerful this can be in developing the strategic direction of a business.

‘Serving customers’, as Drucker said, seems rather obvious, but I believe he had a deeper meaning than the obvious. I think by ‘customers’ he inferred all stakeholders: purchasers, employees, vendors, investors and the wider community.

Wrapped up in this pure kind of business model, indeed perhaps at the very heart of it, is employee and social responsibly. And what creates this mindset and allows it not only to exist, but to flourish, is the extent of the humanity embedded in the company culture.

Company culture is very distinct and should be very particular to each business. If it is a copy and paste exercise it’s not your company culture, it’s a con, so don’t take short cuts in developing and continually refining it. You must live it.

If it’s genuine, it can be a very distinct competitive advantage that really helps secure the future of the business for the long run.

My own belief is that company culture is understanding, building, and living a balanced approach to delivering value to all stakeholders. It is an organisation’s real opportunity to clarify, underpin and then direct the strategies you take going forward based upon being cognizant of your purpose.

Maybe view it as a litmus paper test of your chances of success?

You must decide yourself if this approach fits naturally with you. If you uphold the traditional Anglo-Saxon business model in purity and believe the purpose of business is purely to profit the owner(s) then my talk of company culture might have already turned you off. I don’t judge you if this is your purpose, it is not mine nor the one that my experiences have taught me brings long term success, but it’s completely valid.

However, if you naturally see employees as assets, not costs, then you know that a good business is at its heart a community with a purpose, with the intangible assets of people at its core.

Core company culture is a lived one.

Be careful though in getting on board the company culture boat. You must be genuine, the vision needs to be part of company culture and the vision must connect with what happens every day in your business.

Faking a company culture is not only pointless, but it can also confuse every stakeholder from employees to customers and will soon be exposed, often with very negative consequences.

I will share with you an example; the stated vision of a company is ‘to develop high-quality relationships and support mechanisms’ with their customers, however, the internal customer service employees are strictly measured and rewarded based on how many calls they handle every day.

The vision can never match the stated execution objectives because the reward system is based on getting the customers off the phone as quickly as possible.

There is no alignment so it’s pointless. The company culture is fake.

If what you intend is genuine, you must articulate the vision and culture, and do it well, within a constitution of authenticity and with sublime motivation.

Martin Luther King Jr. did not stand up and say, ‘here is my strategic plan for change within this bullet point slide show’. He said, ‘I have a dream’.

Moving forward with dreams in mind, in last month’s article I mentioned BHAG, or Big, Hairy, Audacious Goals.

I explained that these BHAGs are part of your company culture too, and indeed a key strategic tool.

Essentially, they sit in there as part of your core ideology, which remains constant, straight and true, just like the words in a stick of Blackpool Rock, throughout your business’s development.

BHAG’s exhalate your core purpose and core values. So, write them down or get creating with some challenging thoughts.

Next month we will look at key tools which focus on the more tangible and measurable, such a forecasting demand, the HOOF model, and such heady concepts as the income elasticity of demand – so get to work on your company culture before then please. Till next time.