When Peter Drucker first proposed his “marketing concept” back in 1954, the notion that meeting customer needs better than your competition is the driver of business success was a radical idea.1 Today there are numerous variations on what it actually means to “serve the customer,” but most managers agree that achieving sustainable organic profit growth requires combining several elements: having a clear, relevant customer promise; reliably delivering on that promise; continuously improving it; periodically innovating beyond the familiar; and supporting all that with an organization that’s open to new ideas and market feedback.
Unfortunately, that approach is now so familiar that many managers pay little more than lip service to it. To be sure, implementing what Drucker proposed is difficult. Not only does it require putting customer needs above those of employees and managers, it forces you to face up to your mistakes and focus on what’s critical (perhaps even boring) as opposed to what’s new and exciting. What’s more, it requires a willingness on the part of senior executives to open up communication with people throughout the organization so they can hear what is actually going on as opposed to a sanitized version. Few companies choose to make this leap, even though not doing it can seriously hurt long-term business performance.
The Leading Question
How do managers ensure that their products and services are, and remain, relevant to customers?
- Make sure everyone in the organization really understands and supports the brand promise.
- Be suspicious of sanitized reports — seek unfiltered information on the customer experience.
- Don’t rest on your laurels. Think about incremental innovations and also ones that go “beyond the familiar.”
The challenge for companies is to turn Drucker’s marketing concept from a “motherhood statement” into a meaningful commitment that everyone in the organization understands and takes seriously. Based on our interactions with scores of companies, management’s assumptions about the organization’s commitment to customers are often based on wishful thinking.
1. P. Drucker, “The Practice of Management” (New York: Harper & Row, 1954).
2. There is extensive literature on the role of fear and self-censorship in organizations. Studies include: J.C. Athanassiades, “The Distortion of Upward Communication in Hierarchical Organizations,” Academy of Management Journal 16 (1973): 207-226; M.J. Glauser, “Upward Information Flow in Organizations: Review and Conceptual Analysis,” Human Relations 37, no. 8 (1984): 613-643; J.E. Dutton, S.J. Ashford, R.M. O’Neill, E. Hayes and E.E. Wierba, “Reading the Wind: How Middle Managers Assess the Context for Selling Issues to Top Managers,” Strategic Management Journal 18, no. 5 (1997): 407-423; E.W. Morrison and F.J. Milliken, “Organizational Silence: A Barrier to Change and Development in a Pluralistic World,” Academy of Management Review 25, no. 4 (October 2000): 706-725; and J.R. Detert and A.C. Edmondson, “Why Employees Are Afraid to Speak,” Harvard Business Review 85 (May 2007): 23-25.
3. W. Smit and S. Meehan, “Are They Telling Nothing but the Truth? A Study of Falsehoods in Intelligence Dissemination Within Marketing Organizations” (presentation at European Marketing Academy Conference, Nantes, France, May 2009).
4. P. Barwise and S. Meehan, “So You Think You’re a Good Listener,” Harvard Business Review 86 (April 2008): 22.
5. A. Lashinsky, “Chaos by Design: The Inside Story of Disorder, Disarray and Uncertainty at Google. And Why It’s All Part of the Plan (They Hope),” Fortune Oct. 2, 2006.