The mistake you make in pursuing profit (and how to fix it)

Recently, the Harvard Business Review ran an article about how the Internet is going to make managers care more about their employees. This section is interesting:

The foundation is Peter Drucker’s insight of 1973: the only valid purpose of a firm is to create a customer. It’s through providing value to customers that firms justify their existence. Profits and share price increases are the result, not the goal of a firm’s activities.

The locus of competitive advantage is now determined by interactions with the customer, built on the work of engaged and passionate workers. The central strategic questions of the industrial model, “How much more can we sell?” and “How much money can we make?” are replaced by “Why should customers buy from us?” and “What else do customers need?”

As Ranjay Gulati notes in Reorganize for Resilience (2010), this means orienting everyone to the goal of delivering more value to customers sooner, and aligning all decision-making with this goal. It is a shift in mindset from “You take what we make,” to “We seek to understand your problems and will surprise you by solving them.”

This has implications for your field service organization and its potential profitability.

Think for a moment about your company and how your CEO or other decision-makers would answer this question: "What is the GOAL of your organization?"

Consider how many would answer, “To CREATE customers.” Consider how many would answer, “To SOLVE our customer’s problems.” Now consider how many would just say, “To make MONEY.”

Unfortunately, many people in many organizations -- field service and beyond -- say their goal is just “to make money.” They put profit first and the customer second.  But this is short-sighted. In today’s competitive environment, customers have access to all sorts of information online and are able to read reviews about you and your competitors. There are increasing levels of transparency about who is providing good customer service and who is providing bad customer service.

And for a field service organization, providing good customer service is critical to building long-term relationships with clients. When firms focus on creating customers and valuing them, rather than just “making money,” it leads to increased revenues and profitability.

For more tips and ideas around making your field service organization profitable, download our eBook titled 10 ways to make your field service organization a profit center. 

Written by Jim Hare