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Marketing
Myopia
(condensed text version)
Shortsighted
managements often fail to recognize there is no such thing
as a growth industry.
By Theodore
Levitt -- Harvard Business Review, 1975.
(Written 8 years before the origin of the Internet)
Every
major industry was once a growth industry. In every case the reason
growth is threatened, slowed, or stopped is not because the market is
saturated. It is because there has been a failure of management.
Fateful
purposes
The
failure is at the top. The executives responsible for it, in the last
analysis, are those who deal with broad aims and policies.
-
The
railroads did not stop growing because the need for passenger and
freight transportation declined. That grew. The railroads are in
trouble today (1975) not because the need was filled by others
(cars, trucks, airplanes, even telephones), but because it was not
filled by the railroads themselves. They let others take
customers away from them because they assumed themselves to be in
the railroad business rather than the transportation business.
-
Hollywood
barely escaped
being totally ravished by television. Actually, all the
established film companies went through drastic reorganizations.
Some simply disappeared. All of them got into trouble not because
of TV's inroads but because of their own myopia. As with the
railroads,
Hollywood
defined its
business incorrectly. It thought it was in the movie business when
it was actually in the entertainment business.
There are other less obvious examples of
industries that have been and are now endangering their futures by
improperly defining their purposes. Right now it may help to show what
a thoroughly customer-oriented management can do to keep a
growth industry growing, even after the obvious opportunities have
been exhausted; and here there are two examples that have been around
for a long time. They are nylon and glass -- specifically, E. I.
duPont de Nemours & Company and Coming Glass Works.
Both
companies have great technical competence. Their product orientation
is unquestioned. But this alone does not explain their success. After
all, who was more pridefully product-oriented and product-conscious
than the erstwhile
New England
textile companies
that have been so thoroughly massacred? The DuPonts and the Comings
have succeeded not primarily because of their product or research
orientation but because they have been thoroughly customer-oriented
also.
It
is constant watchfulness for opportunities to apply their technical
know-how to the creation of customer-satisfying uses, which accounts
for their prodigious output of successful new products.
What
the railroads lack is not opportunity, but some of the same managerial
imaginativeness and audacity that made them great.
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Shadow
of obsolescence
It
is impossible to mention a single major industry that did not at one
time qualify for the magic appellation of "growth industry."
In each case its assumed strength lay in the apparently unchallenged
superiority of its product. There appeared to be no effective
substitute for it. It was itself a runaway substitute for the product
it so triumphantly replaced. Yet one after another of these celebrated
industries has come under a shadow. Let us look briefly at a few more
of them, this time taking examples that have so far received a little
less attention:
Dry
cleaning | This was once a growth industry with lavish
prospects. In an age of wool garments, imagine being finally able to
get them safely and easily clean. The boom was on.
Yet here we are 30 years after the boom started (1975) and the
industry is in trouble. Where has the competition come from? From a
better way of cleaning? No. It has come from synthetic fibers and
chemical additives that have cut the need for dry cleaning. But this
is only the beginning. Lurking in the wings and ready to make
chemical dry cleaning totally obsolescent is that powerful magician,
ultrasonics.
Electric
utilities | This
is another one of those supposedly "no-substitute"
products that has been enthroned on a pedestal of invincible growth.
When the incandescent lamp came along, kerosene lights were
finished. Later the water wheel and the steam engine were cut to
ribbons by the flexibility, reliability, simplicity, and just plain
easy availability of electric motors.
The prosperity of electric utilities continues to wax extravagant as
the home is converted into a museum of electric gadgetry. How can
anybody miss by investing in utilities, with no competition, nothing
but growth ahead?
But a second look is not quite so comforting. A score of
nonutility companies are well advanced toward developing a powerful
chemical fuel cell which could sit in some hidden closet of every
home silently ticking off electric power. The electric lines that
vulgarize so many neighborhoods will be eliminated. So will the
endless demolition of streets and service interruptions during
storms. Also on the horizon is solar energy, again pioneered by
nonutility companies.
Grocery
stores | Many people find it hard to realize that there ever was
a thriving establishment known as the "corner grocery
store." The supermarket has taken over with a powerful
effectiveness. Yet the big food chains of the 1930's narrowly
escaped being completely wiped out by the aggressive expansion of
independent supermarkets.
The first genuine supermarket was opened in 1930, in
Jamaica
,
Long Island
. By 1933 supermarkets were thriving in
California
,
Ohio
,
Pennsylvania
, and elsewhere. Yet the established chains pompously ignored them.
When they chose to notice them, it was with such derisive
descriptions as "cheap," "horse-and-buggy,"
"cracker-barrel storekeeping," and "unethical
opportunists."
The executive of one big chain
announced at the time that he found it "hard to believe that
people will drive for miles to shop for foods and sacrifice the
personal service chains have perfected and to which Mrs. Consumer is
accustomed." As late as 1936, the National Wholesale Grocers
convention and the New Jersey Retail Grocers Association said there
was nothing to fear. They said that the supers' narrow appeal to the
price buyer limited the size of their market.
They had to draw from miles around. When imitators came, there would
be wholesale liquidations as volume fell. The current high sales of
the supers was said to be partly due to their novelty.
The chains discovered that survival required going into the
supermarket business. This meant the wholesale destruction of their
huge investments in corner store sites and in established
distribution and merchandising methods.
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Self-deceiving
cycle
But
memories are short. For example, it is hard for people who today
confidently hail the twin messiahs of electronics and chemicals to see
how things could possibly go wrong with these galloping industries.
They probably also cannot see how a reasonably sensible businessman
could have been as myopic as the famous Boston millionaire who 50
years ago unintentionally sentenced his heirs to poverty by
stipulating that his entire estate be forever invested exclusively in
electric streetcar securities. His posthumous declaration, "There
will always be a big demand for efficient urban transportation,"
is no consolation to his heirs who sustain life by pumping gasoline at
automobile filling stations.
In
truth, there is no such thing as a growth industry,
I believe. There are only companies organized and operated to create
and capitalize on growth opportunities. Industries that assume
themselves to be riding some automatic growth escalator invariably
descend into stagnation. The history of every dead and dying
"growth" industry shows a self-deceiving cycle of bountiful
expansion and undetected decay. There are four conditions that usually
guarantee this cycle:
-
The
belief that growth is assured by an expanding and more
affluent population.
-
The
belief that there is no competitive substitute for the
industry's major product.
-
Too
much faith in mass production
and advantages of declining unit costs as output rises.
-
Preoccupation
with
a product that lends itself to carefully controlled scientific
experimentation, improvement, and manufacturing cost reduction.
Population
myth
The
belief that profits are assured by an expanding and more affluent
population is dear to the heart of every industry. If consumers are
multiplying and also buying more of your product or service, you can
face the future with considerably more comfort than if the market is
shrinking. If your product has an automatically expanding market,
then you will not give much thought to how to expand it.
One
of the most interesting examples of this is provided by the petroleum
industry. Probably our oldest growth industry, it has an enviable
record. While there are some current apprehensions about its growth
rate, the industry itself tends to be optimistic. But I believe it can
be demonstrated that it is undergoing a fundamental yet typical
change.
It
is not only ceasing to be a growth industry, but may actually be a
declining one, relative to other businesses. I believe that within
25 years (2000), the oil industry may find itself in much the same
position of retrospective glory that the railroads are now in.
One
of the characteristics of this and other industries that have believed
very strongly in the beneficial consequences of an expanding
population, while at the same time being industries with a generic
product for which there has appeared to be no competitive substitute,
is that the individual companies have sought to outdo their
competitors by improving on what they are already doing.
This
makes sense, of course, if one assumes that sales are tied to the
country's population strings, because the customer can compare
products only on a feature-by-feature basis. I believe it is
significant, for example, that not since John D. Rockefeller sent free
kerosene lamps to
China
has the oil
industry done anything really outstanding to create a demand for its
product. Not even in product improvement has it showered itself with
eminence.
The
greatest single improvement, namely, the development of tetraethyl
lead, came from outside the industry, specifically from General Motors
and DuPont. The big contributions made by the industry itself are
confined to the technology of oil exploration, production, and
refining.
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Asking
for trouble
In
other words, the industry's efforts have focused on improving the efficiency
of getting and making its product, not really on improving the
generic product or its marketing. Moreover, its chief product has
continuously been defined in the narrowest possible terms, namely
gasoline, not energy, fuel, or transportation. This attitude has
helped assure that major improvements in gasoline quality tend not to
originate in the oil industry. Also, the development of superior
alternative fuels comes from outside the oil industry, as will be
shown later.
Major
innovations in automobile fuel marketing are originated by small new
oil companies that are not primarily preoccupied with production or
refining. These are the companies that have been responsible for the
rapidly expanding multipump gasoline stations, with their successful
emphasis on large and clean layouts, rapid and efficient driveway
service, and quality gasoline at low prices.
Thus,
the oil industry is asking for trouble from outsiders.
Idea of
indispensability
The
petroleum industry is pretty much persuaded that there is no
competitive substitute for its major product, gasoline -- if there is,
that it will continue to be a derivative of crude oil, such as diesel
fuel or kerosene jet fuel.
There
is a lot of automatic wishful thinking in this assumption. The trouble
is that most refining companies own huge amounts of crude oil
reserves. These have value only if there is a market for products into
which oil can be converted -- hence the tenacious belief in the
continuing competitive superiority of automobile fuels made from crude
oil.
Perils
of petroleum
First,
crude oil was largely a patent medicine. But even before that fad ran
out, demand was greatly expanded by the use of oil in kerosene lamps.
The prospect of lighting the world's lamps gave rise to an extravagant
promise of growth. The prospects were similar to those the industry
now holds for gasoline in other parts of the world. It can hardly wait
for the underdeveloped nations to get a car in every garage.
In the days of the kerosene lamp, the oil
companies competed with each other and against gaslight by trying to
improve the illuminating characteristics of kerosene. Then suddenly
the impossible happened.
Edison
invented a light,
which was totally nondependent on crude oil. Had it not been for the
growing use of kerosene in space heaters, the incandescent lamp would
have completely finished oil as a growth industry at that time. Oil
would have been good for little else than axle grease.
Then
disaster and reprieve struck again. Two great innovations occurred,
neither originating in the oil industry. The successful development of
coal-burning domestic central-heating systems made the space heater
obsolescent. While the industry reeled, along came its most
magnificent boost yet -- the internal combustion engine, also invented
by outsiders. Then when the prodigious expansion for gasoline finally
began to level off in the 1920's, along came the miraculous escape of
a central oil heater.
Once
again, the escape was provided by an outsider's invention and
development. And when that market weakened, wartime demand for
aviation fuel came to the rescue. After the war the expansion of
civilian aviation, the dieselization of railroads, and the explosive
demand for cars and trucks kept the industry's growth in high gear.
Meanwhile
centralized oil heating -- whose boom potential had only recently been
proclaimed -- ran into severe competition from natural gas. While the
oil companies themselves owned the gas that now competed with their
oil, the industry did not originate the natural gas revolution, nor
has it to this day greatly profited from its gas ownership. The gas
revolution was made by newly formed transmission companies that
marketed the product with an aggressive ardor. They started a
magnificent new industry, first against the advice and then against
the resistance of the oil companies.
By all the logic of the situation, the oil companies themselves should
have made the gas revolution. They not only owned the gas; they also
were the only people experienced in handling, scrubbing, and using it;
the only people experienced in pipeline technology and transmission;
and they understood heating problems. But, partly because they knew
that natural gas would compete with their own sale of heating oil, the
oil companies pooh-poohed the potentials of gas.
The revolution was finally started by oil pipeline executives who,
unable to persuade their own companies to go into gas, quit and
organized the spectacularly successful gas transmission companies.
Even after their success became painfully evident to the oil
companies, the latter did not go into gas transmission. The
multibillion-dollar business, which should have been theirs, went to
others.
As
in the past, the industry was blinded by its narrow preoccupation with
a specific product and the value of its reserves. It paid little or no
attention to its customers' basic needs and preferences.
The
postwar years have not witnessed any change. In 1952 they
"hit" in the
Middle East
.
If gross additions to reserves continue at the average rate of the
past five years (37 billion barrels annually), then by 1970 the
reserve ratio will be up to 45 to 1, as compared to 20 to 1 back then.
This abundance of oil has weakened crude and product prices all over
the world.
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Uncertain
future
Oil
has never been a continuously strong growth industry. It has grown by
fits and starts, always miraculously saved by innovations and
developments not of its own making. The reason it has not grown in a
smooth progression is that each time it thought it had a superior
product safe from the possibility of competitive substitutes, the
product turned out to be inferior and notoriously subject to
obsolescence. Until now, gasoline (for motor fuel, anyhow) has escaped
this fate.
But,
as we shall see later, it too may be on its last legs.
The
point of all this is that there is no guarantee against product
obsolescence. If a company's own research does not make it obsolete,
another's will.
The
best way for a firm to be lucky is to make its own luck. That requires
knowing what makes a business successful. One of the greatest enemies
of this knowledge is mass production.
Production
pressures
Mass-production
industries are impelled by a great drive to produce all they can. The
prospect of steeply declining unit costs as output rises is more than
most companies can usually resist. The profit possibilities look
spectacular. All effort focuses on production. The result is that
marketing gets neglected.
John
Kenneth Galbraith contends that just the opposite occurs. Output is so
prodigious that all effort concentrates on trying to get rid of it. He
says this accounts for singing commercials, desecration of the
countryside with advertising signs, and other wasteful and vulgar
practices. Galbraith has a finger on something real, but he misses the
strategic point. Mass production does indeed generate great
pressure to "move" the product. But what usually gets
emphasized is selling, not marketing.
Selling
focuses on the needs of the seller, marketing on the needs of the
buyer. Selling
is preoccupied with the seller's need to convert his product into
cash: marketing with the idea of satisfying the needs of the customer
by means of the product and the whole cluster of things associated
with creating, delivering, and finally consuming it.
In
some industries the enticements of full mass production have been so
powerful that for many years top management in effect has told the
sales departments, "You get rid of it; we'll worry about
profits." By contrast, a truly marketing-minded firm tries to
create value-satisfying goods and services that consumers will want to
buy. What it offers for sale includes not only the generic product or
service, but also how it is made available to the customer, in what
form, when, under what conditions, and at what terms of trade.
Most
important, what it offers for sale is determined not by the seller,
but by the buyer. The seller takes his cues from the buyer in such a
way that the product becomes a consequence of the marketing effort,
not vice versa.
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Lag in
Detroit
Here
mass production is most famous, most honored, and has the greatest
impact on the entire society. The industry has hitched its fortune to
the relentless requirements of the annual model change, a policy that
makes customer orientation an especially urgent necessity.
Consequently
the auto companies annually spend millions of dollars on consumer
research. But the fact that the new compact cars are selling so well
in their first year (1975) indicates that
Detroit
's vast
researches have for a long time failed to reveal what the customer
really wanted.
Detroit
was not persuaded
that he wanted anything different from what he had been getting until
it lost millions of customers to other small car manufacturers.
Why
did not research reveal consumer preferences before consumers' buying
decisions themselves revealed the facts? Is that not what consumer
research is for: to find out before the fact what is going to happen?
The answer is that
Detroit
never really
researched the customer's wants. It only researched his preferences
between the kinds of things which it had already decided to offer him.
For
Detroit
is mainly
product-oriented, not customer-oriented. To the extent that the
customer is recognized as having needs that the manufacturer should
try to satisfy,
Detroit
usually acts as if
the job can be done entirely by product changes.
As
for taking care of other customer needs, there is not enough being
done to write about. The areas of the greatest unsatisfied needs are
ignored. Illustrative of
Detroit
's arm's-length
attitude is the fact that, while servicing holds enormous
sales-stimulating, profit-building opportunities, only 57 of
Chevrolet's 7,000 dealers provide night maintenance service.
Yet
the automobile companies do not seem to listen to or take their cues
from the anguished consumer. If they do listen, it must be
through the filter of their own preoccupation with production.
What
Ford put first
The
profit lure of mass production obviously has a place in the plans and
strategy of business management, but it must always follow hard
thinking about the customer. This is one of the most important lessons
that we can learn from the contradictory behavior of Henry Ford.
In
a sense Ford was both the most brilliant and the most senseless
marketer in American history. He was senseless because he refused to
give the customer anything but a black car. He was brilliant because
he fashioned a production system designed to fit market needs. We
habitually celebrate him for the wrong reason, his production genius.
His
real genius was marketing. We think he was able to cut his selling
price and therefore sell millions of $500 cars because his invention
of the assembly line had reduced the costs. Actually he invented the
assembly line because he had concluded that at $500, he could sell
millions of cars. Mass production was the result not the cause
of his low prices.
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Product
provincialism
The
tantalizing profit possibilities of low unit production costs may be
the most seriously self-deceiving attitude that can afflict a company,
particularly a "growth" company where an apparently assured
expansion of demand already tends to undermine a proper concern for
the importance of marketing and the customer.
The
usual result of this narrow preoccupation with so-called concrete
matters is that instead of growing, the industry declines. It usually
means that the product fails to adapt to the constantly changing
patterns of consumer needs and tastes,
to new and modified marketing institutions and practices, or to
product developments in competing or complementary industries. The
industry has its eyes so firmly on its own specific product that it
does not see how it is being made obsolete.
The
classical example of this is the buggy whip industry. No amount of
product improvement could stave off its death sentence. But had the
industry defined itself as being in the transportation business rather
than the buggy whip business, it might have survived. It would have
done what survival always entails, that is, changing.
As
for the oil companies, they are more or less "watching
developments," as one research director put it to me. A few are
doing a bit of research on fuel cells, but almost always confined to
developing cells powered by hydrocarbon chemicals. None of them are
enthusiastically researching fuel cells, batteries, or solar power
plants. None of them are spending a fraction as much on research in
these profoundly important areas as they are on the usual
run-of-the-mill things like reducing combustion chamber deposit in
gasoline engines.
One
major integrated petroleum company recently took a tentative look at
the fuel cell and concluded that although "the companies actively
working on it indicate a belief in ultimate success, the timing and
magnitude of its impact are too remote to warrant recognition in our
forecasts."
One
might, of course, ask: Why should the oil companies do anything
different?
Management
might be more likely to do what is needed for its own preservation if
it thought of itself as being in the energy business.
"Creative
Destruction"
People
actually do not buy gasoline. They cannot see it, taste it, feel it,
appreciate it, or really test it. What they buy is the right
to continue driving their cars. The gas station is like a tax
collector to whom people are compelled to pay a periodic toll as the
price of using their cars. This makes the gas station a basically
unpopular institution.
To
reduce its unpopularity completely means eliminating it. Nobody likes
a tax collector, not even a pleasantly cheerful one. Nobody likes to
interrupt a trip to buy a phantom product.
Hence,
companies that are working on exotic fuel substitutes, which will
eliminate the need for frequent refueling, are heading directly into
the out-stretched arms of the irritated motorist. They are riding a
wave of inevitability, not because they are creating something which
is technologically superior or more sophisticated, but because they
are satisfying a powerful customer need. They are also eliminating
noxious odors and air pollution.
Once
the petroleum companies recognize the customer-satisfying logic of
what another power system can do, they will see that they have no more
choice about working on an efficient, long-lasting fuel (or some way
of delivering present fuels without bothering the motorist) than the
big food chains had a choice about going into the supermarket
business, or the vacuum tube companies had a choice about making
semiconductors. For their own good, the oil firms will have to destroy
their own highly profitable assets.
Management
must make quite an effort to break itself loose from conventional
ways. If management lets itself drift, it invariably drifts
in the direction of thinking of itself as producing goods and
services, not customer satisfactions.
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Dangers
of R & D
Another
big danger to a firm's continued growth arises when top management is
wholly transfixed by the profit possibilities of technical research
and development.
Marketing
shortchanged
In
the case of electronics, the greatest danger that faces the glamorous
new companies in this field is not that they do not pay enough
attention to research and development, but that they pay too much
attention to it. And the fact that the fastest growing electronics
firms owe their eminence to their heavy emphasis on technical research
is completely beside the point. They have vaulted to affluence on a
sudden crest of unusually strong general receptiveness to new
technical ideas.
Thus,
they are growing up under conditions that come dangerously close to
creating the illusion that a superior product will sell itself. Having
created a successful company by making a superior product, it is not
surprising that management continues to be oriented toward the product
rather than the people who consume it. It develops the philosophy that
continued growth is a matter of continued product innovation and
improvement.
A
number of other factors tend to strengthen and sustain this belief:
Because
electronic products are highly complex and sophisticated, managements
become top-heavy with engineers and scientists. This creates a
selective bias in favor of research and production at the expense of
marketing. The organization tends to view itself as making things
rather than satisfying customer needs. Marketing gets treated as a
residual activity, "something else" that must be done once
the vital job of product creation and production is completed.
To this bias in favor of product research, development, and production
is added the bias in favor of dealing with controllable variables.
Engineers and scientists are at home in the world of concrete things
like machines, test tubes, production lines, and even balance sheets.
In short, the managements of the new glamour-growth companies tend to
favor those business activities which lend themselves to careful
study, experimentation, and control -- the hard, practical, realities
of the lab, the shop, the books.
What
get shortchanged are the realities of the market. Consumers
are unpredictable, varied, fickle, stupid, shortsighted, stubborn, and
generally bothersome. This is not what the engineer-managers
say, but deep down in their consciousness it is what they believe. And
this accounts for their concentrating on what they know and what they
can control, namely, product research, engineering, and production.
The
emphasis on production becomes particularly attractive when the
product can be made at declining unit costs. There is no more inviting
way of making money than by running the plant full blast.
Today
the top-heavy science-engineering-production orientation of so many
electronics companies works reasonably well because they are pushing
into new frontiers. The companies are in the felicitous position of
having to fill, not find markets; of not having to discover what the
customer needs and wants, but of having the customer voluntarily come
forward with specific new product demands.
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Stepchild
treatment
The
oil industry is a stunning example of how science, technology, and
mass production can divert an entire group of companies from their
main task. To the extent the consumer is studied at all (which is not
much), the focus is forever on getting information which is designed
to help the oil companies improve what they are now doing. They try to
discover more convincing advertising themes, more effective sales
promotional drives, what the market shares of the various companies
are, what people like or dislike about service station dealers and oil
companies, and so forth.
Nobody
seems as interested in probing deeply into the basic human needs that
the industry might be trying to satisfy as in probing into the basic
properties of the raw material that the companies work with in trying
to deliver customer satisfactions.
Basic
questions about customers and markets seldom get asked.
The latter occupy a stepchild status. They are recognized as existing,
as having to be taken care of, but not worth very much real thought or
dedicated attention.
Significantly,
every one of the industry's major functional areas is listed, except
marketing. Why?
Either
it is believed that electronics holds no revolutionary potential for
petroleum marketing (which is palpably wrong), or the editors forgot
to discuss marketing (which is more likely, and illustrates its
stepchild status).
Beginning
and end
An
industry begins with the customer and his needs, not with a patent, a
raw material, or a selling skill. Given the customer's needs, the
industry develops backwards, first concerning itself with the physical
delivery of customer satisfactions. Then it moves back further
to creating the things by which these satisfactions are in part
achieved.
The
irony of some industries oriented toward technical research and
development is that the scientists who occupy the high executive
positions are totally unscientific when it comes to defining their
companies' over-all needs and purposes. They violate the first two
rules of the scientific method -- being aware of and defining their
companies' problems, and then developing testable hypotheses about
solving them. An organizational lifetime has conditioned management to
look in the opposite direction. Marketing is a stepchild.
I
do not mean that selling is ignored. Far from it. But selling, again,
is not marketing. The customer is somebody "out there" who,
with proper cunning, can be separated from his loose change.
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Conclusion
Less
than 75 years ago American railroads enjoyed a fierce loyalty among
astute Wall Streeters. European monarchs invested in them heavily.
Eternal wealth was thought to be the benediction for anybody who could
scrape a few thousand dollars together to put into rail stocks. No
other form of transportation could compete with the railroads in
speed, flexibility, durability, economy, and growth potentials.
Even
after the advent of automobiles, trucks, and airplanes, the railroad
tycoons remained imperturbably self-confident. If you had told them 60
years ago that in 30 years (1975) they would be flat on their backs,
broke, and pleading for government subsidies, they would have thought
you totally demented.
In
any case, it should be obvious that building an effective
customer-oriented company involves far more than good intentions or
promotional tricks; it involves profound matters of human organization
and leadership. For the present, let me merely suggest some
general requirements.
Visceral
feel of greatness
No
organization can achieve greatness without a vigorous leader who is
driven onward by his pulsating will to succeed. He has to have
a vision of grandeur, a vision that can produce eager followers in
vast numbers. In business, the followers are the customers. To produce
these customers, the entire corporation must be viewed as a
customer-creating and customer-satisfying organism. Management must
think of itself not as producing products but as providing
customer-creating value satisfactions. It
must push this idea (and everything it means and requires) into every
nook and cranny of the organization. It has to do this continuously
and with the kind of flair that excites and stimulates the people in
it.
In
short, the organization must learn to think of itself not as producing
goods or services but as buying customers, as doing the things
that will make people want to do business with it. And the
chief executive himself has the inescapable responsibility for
creating this environment, this viewpoint, this attitude, this
aspiration. This means he has to know precisely where he himself wants
to go, and to make sure the whole organization is enthusiastically
aware of where that is.
If
any road is okay, the chief executive might as well pack his attache
case and go fishing. If an organization does not know or care
where it is going, it does not need to advertise that fact with a
ceremonial figurehead. Everybody will notice it soon enough.
^
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