Perhaps it's only fitting to mark
the passing of one of my professors,
Peter F. Drucker, by meditating
on one of his favorite, and, I
believe, most important questions.
Whenever my classmates and I
would boast about our products, our
technologies, our specialized experience,
or say anything at all self-serving,
he'd swiftly bring us back to reality
by noting: "All of that is fine, but
what is the value to your customers?"
In other words, it didn't matter if we
believed we beat the pants off our competitors
by having more branches in
more places. If we couldn't argue convincingly
to the internationally famous
Father of Modern Management that
our customers agreed with us, those
branches, no matter how sparkling and
expensive, were of no consequence
whatsoever.
In fact, by focusing at all on our own
opinions, instead of actively monitoring
and measuring our customers', we
err in two ways. We waste time and
resources looking inward, which is
decadent, and we insulate ourselves
more and more from the only people
who really matter in business — customers
— who pay our bills and provide
opportunities.
Value isn't always obvious, Drucker
would point out. We may think we're
providing one satisfaction, when the
customer is really deriving another, more
significant satisfaction to him or her.
Take a modern gym, such as Bally's
or 24-Hour Fitness.
Their generally accepted purpose is
to "get people into shape," if you ask
most of the people who work there.
Certainly, many people buy memberships
for that stated purpose. But there
are lots of other reasons people sign up.
For some, it's a social outlet; for others,
a sanctuary where they can set
their own pace, relax, and escape the
demands of family and co-workers.
For a few, it's a chance to preen, to
show off their abs or biceps or whatever
the muscle de jour happens to be.
If you observe most members,
they're in no rush to move from station
to station. They linger, and their heartbeats
seldom seem to reach that magical
aerobic moment when calories
happily burn away.
If they're pushed by the staff or by
other patrons to work harder or faster,
they rebel, if only silently.
They want to get into shape their
own way, which of course, isn't always
technically feasible, but many folks
con themselves into thinking that
they're progressing. Their victory is
walking through the gym's door, not in
becoming an Adonis.
To run a financially successful gym,
one would have to accept these customers
and make it possible for them
to maintain their illusions, because
these illusions are satisfactions to
them. Illusions constitute "value," in
the Druckerian sense.
He was fond of telling us how his
young niece requested a special gift for
her birthday, which provided no functional
utility at the time — her first
brassiere. Instead of dismissing this
request, he understood it as a desire to
feel more grown-up, and he honored
her wish, giving her a truly valued gift,
and great joy.
Not only do we have to ask the allimportant
value question, we need to
re-ask it, if we hope to keep pace with
and to retain our clientele.
Realities change, sometimes suddenly.
GM's biggest SUV looks very
different when the price of gasoline
spikes. Bally's has to stay on top of
trends, and offer Pilates or yoga classes,
depending upon what seems to be
in demand. It can't say, "We've always
run step classes, and that's it!"
Being guided by customer sensibilities
can be very scary to some businesspeople.
It requires us to challenge
tradition and preconceptions, to open
up, to ask questions, and to renounce
authoritarianism. We need to be willing
to really understand the sensibilities
of others, and to cater to them, to
serve them the way they want to be
served.
We need to be prepared to abandon
our favorite products, the ones that
have defined us and nurtured us,
when there is the hint that they no
longer deliver value to the customer.
That's tough, and that is part of the
legacy of Peter Drucker.
As former GE CEO Jack Welch said,
Professor Drucker had a knack for asking
the right question, usually a deceptively
simple one, that could add
tremendous clarity and value to one's
business. What is your value?
DR. GARY S. GOODMAN is the author of The
Law of Large Numbers: How to Make Success
Inevitable, and is a New York Times bestselling
author. To read " 'Thanks for the Rejection!' "
(Jan/Feb 2005) by Gary S. Goodman, visit
www.AdvantEdgeMag.com/Goodman today.