26/09/2012 § Leave a comment
“If I had asked people what they wanted, they would have said faster horses” Henry Ford
How often have I heard it said that what drives business behaviour is customer demand. Why do supermarkets sell so much food of low nutritional value? “Customer demand.” Why do auto manufacturers continue to make highly inefficient vehicles when for years they have had the technology to make far more efficient ones? The same “customer demand”. British newspapers continue to fill their pages with stories about murders and rapes and celebrities because “that’s what the public want”.
This is a convenient and simplistic truth, but it is far from the whole story. Because it would be equally true to say that businesses shapes and drives customer demand. 30 years ago in the UK, for example, customers were not demanding strawberries in winter, mangoes or papayas. The supermarkets spotted an opportunity to increase sales and introduced these offerings. Sometimes businesses even manipulate the customer to get them to buy. This can be very subtle, such as carefully choosing which goods to place at which height on the shelves to maximise sales. Or it can be not subtle at all. General Motors and other auto manufacturers succeeded in shutting down large sections of public transport in the 1930s and 1940s in the US to make people more dependent on cars (to read more on this story, search for “Great American streetcar scandal”).
Yet there are limits to how far a businesses can go in influencing customers, even strong brands like Marks & Spencers. 15 years ago or so they invested heavily in boosting their organic food offer, trusting that customers would see the benefits. They didn’t – people weren’t ready for it at that stage. “One of the biggest mistakes we’ve made“, Marks and Spencers called it at the time. Of course there is far more interest in organic food these days – they were just too early.
A more mature way to understand the business/customer relationship is to view it as co-evolution. Neither is wholly independent – the businesses don’t passively sit and wait to see what the customers want, nor does the business cynically manipulate the customers into buying what they are selling. There is a co-evolution, a co-creation going on. As is happening in nature all the time.
Of course it doesn’t stop there. Businesses and their customers are embedded in a complex living systems we call society, which in turn is part of a larger complex system which we call the planet, which in turn is part of a larger complex system we call the universe. A business co-evolves in relationship with its staff, customers, suppliers, neighbours and the universe.
Many of us intuitively know this. But it is not a popular view. This is partly because the public don’t want complex explanations to complex problems – they want simple solutions and someone to blame if things go wrong. Those who sit at the top of the corporate tree are expected to “run” the business. They have to present the illusion that they are in control in order to justify their excessive salaries. Yet the simple truth is that they are not in control and cannot be.
Yet I also sympathise with the CEO who is facing an investor analyst asking questions about his or her plans for the business. Can you imagine what the analyst would say if the CEO explained that he couldn’t really say because the business was in co-evolution with its customers and with the universe! He’d be wheeled out in a straitjacket. It’s much easier to explain that he is looking to drive growth through pro-actively meeting customer demand. This is what the analyst expects him to say. He is, after all, also in co-evolution with the organisation.
It seems to me that perhaps our greatest need as a society at this time is to co-evolve in our understanding and patience so that we accept that some things are complex and are not in anyone’s control. And that we need spaces where we can have deep discussions to explore big complex issues.
Complex isn’t it? Time for a cup of tea….