Is your organisation leaking value?

20th November 2017 |   Mark Davies

The spiral of value leakage starts when organisations fail to focus on the customer and what they value. Instead, businesses should focus on creating “infinite value”.

Peter Drucker is famous for making the following observation: “Because the purpose of a business is to create a customer, the business enterprise has two (and only two) basic functions: marketing and innovation.”

If you are not involved in marketing and innovation, this could seem to be a tad harsh – but Drucker had a point though, and his thinking is even more relevant today. Changes advance as economies shift to new countries such as China; rapidly advancing technology innovation disrupts business models and, with these advancing technologies, communication and connectivity are also advancing – seemingly on daily basis. We are at the first stage of the Internet’s capability, and already it has transformed business: it has done so by empowering customers and consumers by providing a go-to source of information and insight.

For suppliers, this creates a scenario whereby an offering that was unique last year will not be unique this year. Thus, to remain competitive and relevant as a supplier you must transcend this creeping commoditisation to be recognised as a partner that adds significant value by helping the customer thrive in this rapidly changing environment.

Managing Director of Segment Pulse Limited

Mark Davies is managing director of Segment Pulse Limited, a Visiting Fellow with Cranfield School of Management and Aston Business School. He has an MBA and an MSc in Advanced Manufacturing Systems; he is a Chartered Engineer, Chartered Marketer and a Fellow of the Chartered Institute of Marketing. He is the author of Infinite Value, recently published by Bloomsbury.