What’s the endgame for a business? Is it to enrich investors? Is it to crush competitors? Is it to maximize profits?
For insiders, high stock prices, crippled competition, and fat profits sound great. But for outsiders, including customers and clients of those businesses, none of those ends are very comforting. Indeed, unsavory incentives encourage corporate misbehavior. Consider the recent scandal plaguing Wells Fargo (WFC), where employees were pressured to sell customers products that they didn’t want or need.
A business ceases to be without customers. So it’s critical for businesses to telegraph to their customers that they’re not in the business of screwing people.
In recent weeks, we’ve heard Warren Buffett, Jamie Dimon and Jeff Bezos talk about managing their businesses. Respectively, they’re the CEOs of Berkshire Hathaway (BRK-A, BRK-B), JPMorgan Chase (JPM) and Amazon.com (AMZN). These are three very different companies, but all are regarded highly and all are worth hundreds of billions of dollars.
What’s their secret?
Customer first
In their recent talks, all three of these giants of business emphasized one thing: customer first.
At the Economic Club of Washington DC in September, JPMorgan CEO Jamie Dimon discussed what eventually led to his ouster from Citigroup in 1998. At the time, top brass were creating an organizational structure that Dimon was convinced would create chaos at the banking conglomerate. But they followed through because, according to Dimon, “It worked for them.”
“It doesn’t matter if it works for you,” Dimon said of business executives. “When you hear a CEO say, ‘It works for me,’ you should question their intelligence. Because it’s not the way you should look at business. It’s what works for the client, ultimately.”
JPMorgan Chase is the largest bank in America.
Amazon.com CEO Jeff Bezos echoed this priority during the Vanity Fair New Establishment Summit last week.
“The core of the company is customer-obsession as opposed to competitor-obsession,” Bezos said. “Customers are always dissatisfied and they always want more. So they pull you along. If you’re trying to serve them, they pull you along.”
In other words, customers force you to evolve. And by definition, they’re also the best source of feedback regarding the customer.
“If you want to be pioneering, if you want to be inventive and if you want a culture that’s experimental, then you want to be customer-obsessed,” he said.
Amazon.com is the 800lb gorilla in online retail, which has supplanted the brick-and-mortar retail business model.