What is the goal of business? As one classically trained in American business, I can confidently quote to you the textbook answer:<\/p>\n
The goal of business is to increase shareholder wealth.<\/p>\n
While one might think \u201cshareholder wealth\u201d would be open to interpretation, I\u2019ll put your mind at rest by letting you know the almost universal understanding of the term is MONEY.<\/p>\n
This being the third installment of a review of Tom Asacker\u2019s profound book A Little Less Conversation, and in keeping with my initial claim that Tom\u2019s a fellow contrarian, I\u2019ll start by making the bodacious claim that the goal of business is most certainly NOT to increase shareholder wealth!<\/B><\/p>\n
My American friends are now having canniptions and thinking I\u2019ve lost my mind. No doubt my college professors who instructed me to the attainment of a Bachelor\u2019s in Corporate Finance and then those who graded all my papers leading to the attainment of my MBA, are rolling their eyes. Also no doubt, my European friends are saying, \u201cLike, no duh, dude.\u201d<\/p>\n
I cannot summarize Tom Asacker on this point. I\u2019ve read through his work several times and I just can\u2019t come up with another way to say it, so I\u2019ll quote him:<\/p>\n
Listen, all I\u2019m saying is that people are emotional, social creatures, so your organization should be strategically designed with that fact in mind. Business isn\u2019t about numbers. It\u2019s about people and culture. The numbers simply tell you how well you did understanding and appealing to that culture. The fundamental notion that customers are rational actors, who are simply trying to optimize their individual choices, is defunct. Value can no longer be reduced to a simple relationship between benefits and price (p. 49).<\/p>\n
What to do about it? Tom says beautifully what I tried to say throughout the last year (what I said was social media gives us an opportunity to examine our presuppositions about the nature of reality):<\/p>\n
People need to change how they think about their business challenges. In my view, they should think about their products, services, pricing, place of business, promotion and people as a means to an end. And that end is to give customers a happy now, show them a happy future, and enhance their sense of worth and belonging (p. 51).<\/p>\n
What does this mean for marketers? Quite simply, while you most definitely SHOULD know your own economics, if you focus on your economics, you\u2019ll miss your opportunity to succeed. Look at the money (the ROI even) as a TRAILING INDICATOR of how well you understand your business. The money isn\u2019t your business; at best it\u2019s a measure of how well you do your business. Focus on the business, which means focus on what you\u2019re creating for your customers (what you\u2019re creating in THEIR lives, not your product). Focus there, and chances are, the trailing indicator (money) will take care of itself.<\/p>\n
Tom Asacker on Twitter<\/a><\/p>\n My radio interview with Tom Asacker<\/a> for the Social Media Professor<\/a> program.<\/p>\n Subscribe to the Social Media Professor<\/a> podcasts<\/p>\n","protected":false},"excerpt":{"rendered":" What is the goal of business? As one classically trained in American business, I can confidently quote to you the textbook answer: The goal of business is to increase shareholder wealth. While one might think \u201cshareholder wealth\u201d would be open to interpretation, I\u2019ll put your mind at rest by letting you know the almost universal … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[54],"tags":[67,68,65,66],"class_list":["post-112","post","type-post","status-publish","format-standard","hentry","category-treypennington","tag-culture","tag-emotional-creatures","tag-goal-of-business","tag-people"],"_links":{"self":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts\/112","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/comments?post=112"}],"version-history":[{"count":3,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts\/112\/revisions"}],"predecessor-version":[{"id":114,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts\/112\/revisions\/114"}],"wp:attachment":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/media?parent=112"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/categories?post=112"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/tags?post=112"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}