There is no doubt that business is one of the biggest – if not the biggest – determinant of economic development, and hence one of the primary influences in everyday life. The current economic climate is sufficient evidence of that, as well as primary proof of the need for business to be properly, ethically and efficiently managed.
It is therefore self-evident that, if the world is to solve the challenges it currently faces, then business has to lead the way.
For it to do so, however, there needs to be a clear understanding of what business is and some consensus as to how it needs to change if the human race is not only stop the damage being done to our environment, but also to ameliorate the damage already done. The BE DO HAVE, Purpose, Vision and Mission model is thus just as important for business as it is for personal development.
This was brought home to me recently when I read that Peter Drucker had said, “The purpose of business is to create customers.” I don’t recall ever before disagreeing with anything Drucker said, but I really disagree strongly with that statement. Why? Because a business is created to meet a customer need. How it chooses to meet that need is a fundamental part of its strategy, but it exists ultimately only to meet a need. As soon as it looks to do anything else – when it starts to see itself as responsible for creating customers – it starts to create wants, and exacerbates risk, for there is no long-term viability in satisfying wants.
Thus Drucker’s statement could be said to be father to the conviction that profit is the be-all and end-all of business, which is itself a moderated version of the Machiavellian philosophy that, “The end justifies the means!”
Of course that is not to idealistically and naively claim that profit is evil. It is simply a caution against giving it too much emphasis, for it precisely this kind of thinking that fuels the kind of greed witnessed in the financial sector and that caused the 2008 economic crash. The wrong purpose clearly results in an undesirable outcome. There has to be a counter-balance and that is all that my book argues – suggesting simply that we should:
- Look far more at value than profit; and
- Recognise that taxes on profits are not necessarily adequate compensation for allowing businesses to make their profits.
I have put forward some alternatives, but there may well be others. Please share any that you may have.
