"Because the purpose of business is to create and keep 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 (1909-2005) in The Practice of Management
If Peter Drucker had this one right (and lots of very bright people seem to think he did), then why is it that so many companies struggle to achieve breakaway success in the two areas that clearly matter most?
While the specific challenges will vary between each individual business, the primary issue is the natural tendency for each functional area within the organization to become overly focused on its own internal day-to-day issues and cross-functional machinations. Although this is a natural tendency, that doesn't necessarily mean it is a healthy one.
So how does a CEO keep this naturally-occuring trend towards an inward focus from negatively impacting those results on the outside?
As always, Drucker's insights are simple, yet profound.
In his last article that was written for Wall Street Journal Online back in December of 2004, Drucker stated that, “The
CEO is the link between the Inside that is
‘the organization,’ and the Outside of society,
economy, technology, markets, and customers. Inside there are only costs. Results are only
on the outside.”
Being a an effective CEO is one of the most challenging jobs on the planet.
CEOs have to be capable of juggling a mind-boggling level of complexity within the constraints of a never ending list of competing priorities that are constantly nipping at their heels for attention.
For that reason, determining what might even constitute that "meaningful Outside" is a job that is frequently put on the back burner by the pressing demands of more urgent issues. Even if a CEO can carve out the time needed to establish what those relevant shifts on the outside are, the next challenge is to determine exactly which aspects of that "meaningful Outside" ought be brought in to the company and integrated across the various "costs on the inside".
Assisting CEOs with that all-important job of identifying that "meaningful Outside" and then capitalize on it through collaboratively innovation within their organizations and across their partnering ecosystem is why we exist.