Creating the Organization of the Future by Bernard Jaworski

Author:Bernard Jaworski
Language: eng
Format: epub
ISBN: 9781837532186
Publisher: Emerald Publishing Limited
Published: 2022-04-21T00:00:00+00:00

External, Customer Value-Driven

A market is essentially formed by customer demand. One of Drucker's most widely recognized assertions is: “The only valid definition of business purpose is to create a customer.”13 Creating customers implies a new segment, and this requires firms to learn about each target customer segment wholeheartedly, identify the underlying value beyond product features, and design customized offerings that can deliver such value. This value can be a functional value, emotional value, symbolic value, and so on. The focus on mission is to understand chosen customer groups' unique desires, hopes, and needs.

For a B2C player such as Seasun Games, a game producer and distributor, their desired customer value is that their players discover the beauty in traditional Chinese fairy tale stories through their game and graphic designs. On the other hand, B2B firms need to consider both the customer and the consumer. For TCT, their desired value to the end consumer is to create safe and reliable rides for passengers. For direct customers – the metro companies that pay for their system – the desired value is not about the technology or system itself, but the reduced labor cost and user-friendly operation delivered by certain customized driverless functions.

Today's executives may be familiar with these concepts already. However even to some of the most thoughtful CEOs in the world, mission is not always an easy question to answer in practice. One of Drucker's most well-known consulting cases took place when Jack Welch became the new CEO of General Electric. Drucker asked him: “If you weren't already in this business, would you still enter it today? If the answer is no, what are you going to do about it?”14 It was this classic and profound question that inspired Welch to rethink his entire GE business portfolio. As a result of this set of choices as well as others, Welch successfully led GE to continue its high-performing run for the next 20 years.

These two criteria – external and customer focus – are important because traditional wisdom requires firms to position themselves within the market. This “positioning” mindset can often mislead firms to think from their own perspective and focus on what they can offer. Hence, the firm can become overly product- or technology-driven and lose the opportunity to shape the market. Instead, Drucker advocates that customized goods or services can “sell themselves.” The goal is not to allocate resources on endless marketing campaigns that push customers by focusing on the “premier goods” or state-of-the-art technology per se. For Drucker, customers are neither standardized with the same need nor profit generators who will buy whatever existing products are offered by a firm. They need to be considered as differentiated individuals who should be served in particular contexts. For example, the same Micky Mouse from Disneyland needs to get adapted to different customs when he travels around the globe in order to provide localized stories for better communication with regional consumers.

Although there were no such concepts as a customer and customer value back in

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