Business organizations exist to satisfy customers and embracing this credo serves as the fourth and final cornerstone of the philosophical foundation or our Theory of Positive Leadership.
If you are thinking:
“Duh! Aren’t we stating the obvious?”
you would be correct. Sometimes, however, it is critical that we state the obvious. Very often, things go wrong in organizations because we take our assumptions for granted. Over time, our assumptions tend to become blurred. One of our most fundamental assumptions is the order in which our customers can be found on our list of priorities.
Try this experiment. The next time you are in a room full of business men and women, ask them this simple question:
Do businesses exist to make money or do they exist to satisfy customers?
I have yet to ask this question without it sparking a very interesting and sometimes heated debate.
Many will insist that business organizations exist to make money. While there is no doubt that all business investments are made for the purpose of earning a return on one’s investment, once we choose our marketplace, everything changes. Once we have chosen a customer base (identified a population of customers with unmet needs or wants) and have identified the products and/or services we intend to produce (in order to satisfy those wants and needs) our ongoing purpose has irrevocably changed.
We now exist to satisfy our customers thus insuring their willingness to pay a fair price for that which we offer to sell. How much we make is nothing more than the way we keep score; the way we measure our success in satisfying our customers. Let’s restate this: the money our customer pays us is, now, nothing more than a function of the level of satisfaction they have with, first, our products and services and, secondly, with our performance as a valued and reliable supplier.
The day our customers begin to suspect that their satisfaction is secondary to our desire to make money, is the day we are at risk of losing that customer. Don’t misunderstand. Our customers understand that we have to make a profit just like we understand that our suppliers must make a profit. Neither we nor they want to think, however, that our suppliers would be willing to sacrifice the quality for which we have agreed to pay for a higher profit margin.
When a business leader chooses to sacrifice quality in order to make an extra buck, he or she has taken the first step down the precipitous path of inevitable failure. Think about your favorite restaurant, for example. You’ve become a regular customer because you have enjoyed the high quality of their menu, ambiance, and service over a period of many years. No doubt, you recommend the restaurant to your friends, family, and business associates, and also to people who might be new residents of your community or maybe are just visiting. You do not make such recommendations lightly; you do so only because you have a high level of confidence in the quality of experience your friends and colleagues can expect to enjoy.
Imagine a scenario when, on your next visit, you walk away disappointed in your dining experience. You certainly will not give up on your favorite place on the basis of one bad experience but it will start you thinking. How many bad experiences will you be willing to tolerate before you begin to downgrade that restaurant on your list of favorites. How many bad experiences before you stop recommending the establishment to other people? How many bad experiences before you stop eating at a place of which you have such fond memories? Very often when such a stream of events occur, it is because the ownership opted to cut back on the cost of producing your favorite selections from their menu; or when they lower their expectations of the staff who service their patrons and it does not just happen to restaurants. It can happen to manufacturers, healthcare providers, providers of any professional service, or retailers of any product or services. This is what happens when a business in any venue switches its focus to profits in lieu of customer satisfaction.
Successful businesses, on the other hand, as evidenced by the powerful positive leaders who guide them, possess a relentlessly passionate commitment to the satisfaction of their customers and this commitment drives every single thing they do and say. This commitment is a major component of the values of the organization and serves as the focal point for both vision and mission.
Plain and simple, businesses exist to satisfy customers. It is also a lesson that government and not-for-profit agencies would do well to remember. If you have any doubts, just think about what is happening with United States Postal Service.