It has come to my attention that some leaders think that business is all about technology, money, manufacturing processes, or the supply chain. This is nonsense. All successful companies revolve around human needs.
Without people, every patent in the world would be worthless. People are the ultimate consumers of every product and service, even the most obscure manufacturing technology. Even in business-to-business sales, people make the decisions about what to purchase and when.
Corporate leaders go on and on about building – and sustaining – competitive advantage. Companies try to compete on price, quality or design; these create temporary advantages at best. The only lasting competitive advantage is knowledge your company possesses – that competitors lack – about the people your company serves.
Why is this true? Such knowledge enables your firm to make loyalty more convenient than disloyalty. It becomes easier for customers to work with you than your competitors. It becomes easier for you to understand and serve their needs. It becomes easier to make a fair and sustainable profit, because you don’t waste time and money on activities your customers don’t value.
Not everyone agrees with me. Some managers despise the thought that people matter. They think business success is all about managing the numbers; that’s why you see firms cutting employees to boost profits. Ah, but this is a very, very short-term strategy. You can’t cut your way to success, especially if you forget that business is all about people.
Take for example, a firm that cuts thousands of employees to increase profits. Think about the relationships it will disrupt by taking thousands of people out of the picture. Those missing employees will have had numerous relationships with customers, partners and suppliers. Tons of information will disappear about their needs. As those employees depart, so will their insights and information.
This, for example, is why so many management teams embrace CRM and Knowledge Management systems; they take knowledge from inside people’s heads, and put it in the hands of the business. But employees have long been suspicious of such systems… a salesperson might correctly realize that if she reveals all her contacts and customer interactions, it will be easier to replace her.
Of course, none of this is a problem if the culture and top management team of a firm puts people first. When leaders realize that people are what matter most in business, everything else falls in line.
The true test of whether top management understands this truism is how they treat other people. If a CEO would rather cut off his or her own arm than layoff employees, people come first. If that same CEO spends half his or her time actually talking to customers, people come first.
Sure, numbers matter. Technology matters. Efficiency matters. But they don’t matter nearly as much as people do. To succeed in business, you have to understand and value people. It really is that simple.
Bruce Kasanoff ghostwrites articles and books for entrepreneurs.
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