"The purpose of business is to create and keep a customer."
This is one of those usual sayings of Peter Drucker which tremendously identifies the simplicity of something, and at the same time getting to the very core of it. That's the case with the one stated above.
Within the context of the purpose of any business, what he says is exactly true. Of course that doesn't mean there's not an overall reason a business exists, but, the underlying reality of any purpose is to "create and keep a customer," regardless of the theme of the business.
So if your purpose for a business was to create the most durable, sharp fishing hook for a specific species, the underlying purpose would be to "create and keep a customer."
If the reason you went into business was to develop the best handbag for executive women in the world, the underlying purpose would be to "create and keep a customer."
You get the idea. I stress it here because for the most part I've talked about the theme of the business in the past on managersrealm as being the purpose of the business, and it is. But the foundation of all purpose, no matter what form it takes as a product or service, is to "create and keep a customer."
The problem so many managers and business leaders forget is that this is the reason they exist, and can get caught up in the latest fads and trendy philosophies on how to run a business.
Now I bet you know the answer to the question to what the purpose of a business is. The real challenge is keeping it in front of us at all times in the face of constant change. The reason for change, can also be stated in our little slogan inspired by Peter Drucker: "The purpose of business (change) is to create and keep a customer."
Other Peter Drucker Resources:
The Man Who Invented Management
Beyond the Information Revolution
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"The purpose of business is to create and keep a customer."
It's an interesting quote, to be sure.
But note the word "create"--not "get"--not "find" "identify"
This implies that the business in some sense identifies a need often
before the customer knows they have it. The fact that Steve Jobs appears on
your site as being named as top CEO is interesting in this regard. No
other executive of a Fortune 500 comes close in creating products that
create new customers.
Posted by: Michael | December 2, 2007 12:52 PM | Permalink to Comment