What Business are We In?

By John Hunter, author of the Curious Cat Management Improvement Blog (since 2004).

image text: A good question for anybody in business to ask is What business are we in? To do well what we are doing - i.e., to turn out a good product, or good service, whatever it be? Yes, of course, but this is not enough. We must keep asking - What product or service would help our customers more? We must think about the future. What will we be making 5 years from now? 10 years from now?

That quote is from The New Economics, published in 1993. Still today many companies would benefit greatly from adopting this thinking. So often companies fail to focus on the needs of customers. So often companies focus on the short term to the detriment of long term success.

We would all be better off if more companies would focus on the needs of their customers and how to continual improve their products and services to meet those needs.

This requires planning ahead. A company must have the foresight to know when incremental improvement will not meet their customers needs in the future. And then the company must use their knowledge of customer needs and the possibilities to innovate.

One of the challenges is that the implications of his quote naturally fit into an organization with a management system built with an appreciation of Deming’s ideas but often run into challenges in other organizations. If short term budgets dominate it is difficult to invest in the long term. If performance appraisals punish and reward people for results on short term targets it isn’t sensible to expect people to focus on the long term needs of the customers or the organization.

It is a challenge to anticipate the future needs of customers and plan for meeting them even with a Deming based management system. It is much more difficult with a management system that is not focused on continual improvement, viewing the organization as a system, delighting customers, long term thinking and respect for people.

W. Edwards Deming knew that product and service innovation is driven by customer focused organizations.

Related: Customer Focus with a Deming PerspectivePractical Ways to Respect PeopleThe Importance of Working with Suppliers Over the Long TermGaining a deep understanding of customers

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