Innovation and Marketing
Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.
— Peter Drucker, People and Performance, 2007
This is a quote that almost everyone has heard.
Only two functions? What about quality, purchasing, sales, production, personnel, customer service, development...?
There are not many who would say that success depends on sales. Others say that without the employees nothing works. If personnel is scarce, marketing and innovation will not work.
Peter Drucker did not deny the importance of the other functions. He portrayed them as "cost factors."
Cost factors magically attract attention. No one likes waste. The desire to avoid losses is usually stronger than making profits (see Kahneman).
If you follow Drucker, the cost factor is the wrong focus. Marketing and innovation is what the company needs to fulfill its purpose.
However, there is a little trick to keeping the cost factors lean and linking them to marketing and innovation. The trick is called positive culture. A culture of psychological safety, of accepting responsibility, of recognition and appreciation from person to person. And a culture of performance.
If you want to see the impact of positive culture with some numbers, you may look at [1].
It's fascinating how these companies were rescued with management innovations. I think this transformation is already underway in many companies.
It requires some rethinking. A new attitude. And creativity. And collaboration.
If Chinese companies are already reinventing management [2], others should not miss out on the benefits of positive culture for the sake of loss aversion alone.
Marketing and Innovation will follow.
[1] https://hbr.org/2015/12/proof-that-positive-work-cultures-are-more-productive
[2] https://hbr.org/2023/03/how-chinese-companies-are-reinventing-management