If customer ignorance is a profit centre for you, you're in trouble.
Interpretation
Exploiting customers' lack of knowledge can lead to short-term gains but is ultimately unsustainable.
This quote by Gary Hamel emphasizes that if a business profits from the ignorance of its customers, it is likely to face serious issues in the long run. Such a strategy undermines trust and customer loyalty, indicating a deeper problem within the company's practices and approach to their clients. It highlights the importance of transparency and ethical behavior in business, suggesting that true success comes from empowering customers rather than taking advantage of their lack of information.
In practice
In a business seminar discussing customer engagement strategies, this quote can be used to emphasize the importance of ethical practices.
The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors.
The biggest barriers to strategic renewal are almost always top management's unexamined beliefs.
To create an organization that's adaptable and innovative, people need the freedom to challenge precedent, to 'waste' time, to go outside of channels, to experiment, to take risks and to follow their passions.
It doesn't matter much where your company sits in its industry ecosystem, nor how vertically or horizontally integrated it is - what matters is its relative 'share of customer value' in the final product or solution, and its cost of producing that value.
The single biggest reason companies fail is they overinvest in what is, as opposed to what might be.
The only thing that can be safely predicted is that sometime soon your organization will be challenged to change in ways for which it has no precedent.
If you develop a product that gets what the customer is trying to get done, you don't have to advertise; people will just pull it into their lives.
In the Machine Age, the company itself became a machine - a machine for making money.
You say: "I'm a blue sky thinker." Investor thinks: "You have no business model, and you don't know how to ship."
When we first started our internet company, 'China Pages', in 1995, and we were just making home pages for a lot of Chinese companies. We went to the big owners, the big companies, and they didn't want to do it. We go to state-owned companies, and they didn't want to do it. Only the small and medium companies really want to do it.
My half-baked reading of history is that we continue to go through these waves of entrepreneurial explosion followed by merger mania and consolidation. Out of that come big sluggish companies that eventually collapse under the weight of what they've created, and are killed off by the next wave of entrepreneurs.
You go to any MBA program, and you will be taught the theory of the firm, that the purpose of the firm is the maximization of return on invested capital. I always thought this was a kind of lunacy.
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