Of all the questions you can ever ask or be asked about your business the most important question is why you exist. Now the short answer is likely to make money and that is a fair answer but putting a little thought into it we can rephrase the question to why do customers come to you. Again many would say because we have product x or y but the reality is customers don’t look at it that way and neither should you. Businesses are not about products but rather purpose. Your purpose should lead your business and here’s why.
Product driven business
The product-driven business is probably how many of us start out in business and that is fine. You have a product you can source or produce and sell on at a profitable amount. There is nothing wrong with operating in this way but consider the late Clayton Christensen’s job theory, a customer does not require a pie but rather to feed their body. A pie is the means to an end. This theory suggests that a customer has many alternatives to achieving the same objective. A lesson I learnt in my stint in the fast-food business, having arrived on the market offering a thin menu. All the products on the menu were great but we had given little thought to the purpose from a customer perspective. We had burgers, hot dogs, chicken wings & quarters but had given no thought to chips, drinks and other accompaniments. A rookie mistake? Yes. It is a very good example of being product-driven.
Purpose-driven businesses are not so different from product-driven ones. However, the purpose-driven business, the one that looks at its purpose to the market, is better geared to innovate existing ideas or originate new ideas that serve the market. A classic example of this is Apples transition from entering the mp3 player market with the iPod, dominating the market with a wide product range and then killing off the iPod in favour of the iPhone. The product has changed but the purpose has remained the same. To reveal a purpose simplY change the question from “what do we do” to “what do we do for customers”.
Someone involved in web page design would look at their purpose as providing an online portal for information, interaction or sales. Using this example you quickly realise that in addition to knowing web page design can be augmented by knowledge of customer service or sales.
Why purpose should come first
As I stated before not every business starts with a purpose, many start product-based. However, businesses that transcend well invariably are purpose-based. Econet was so purpose focussed in its inception that it sought to bring prepaid to Zimbabwe at a time when it was not widely used. The purpose continues to spur Econet on through its many ideas such as Ecosure, Sasai and Ecocash which grew si strong it was spun off to Cassava.
Products come and go
One of the most heralded cases of disruption in the world is that if Netflix disrupting Blockbuster. For those who may not know Blockbuster dominated worldwide videotape and DVD rental business. Netflix did not start as we know it today, they also offered video rental, though DVD, via post. Netflix saw and seized the opportunity in the internet and video on demand, Blockbuster did not. Why? I’d like to believe Netflix was purpose-driven while Blockbuster stayed product-driven.
In the bestseller Good to Great, Jim Collins writes on a wonderful quite from Jack Welch, who after being promoted from within to head troubled General Electric America was asked what his plan for the revival of the company was. Welch responded he needed to first get the right people on the bus, the wrong people off the bus, then put the right people in the right seats. Only then could he say where the bus was going. This can easily be extrapolated to getting the purpose of the business right then seeking the products.
Purpose transcends products
Zimbabwe is a young country but there are lessons to learn from its businesses still. Tel One, after years of continuing to beat a drum nobody wanted to hear anymore (fixed telephony) found favour with the market again when they switched to focusing on their internet offering and online content. Net One also woke up to the reality that focus on mobile money was the battlefront of mobile right now.
What does all this mean for you? Ask yourself the question today, what do you do for your customers? Read this article on why the question you ask is more important than the answer too. You have found success with your current product offering and that is great but what comes next. What will your next competitor or opportunity be? How can you improve the current offering? Future focus demands that you place purpose before product.