The Connected Company

The purpose of a company is what it does for customers.

Good profits come from creating value for customers. Bad profits come at the expense of happy customers and long-term sustainable growth. Bad profits come from customers who are locked in, who feel trapped or abused. Bad profits come from nuisance fees, like airlines charging extra for checked baggage, car rental companies charging $10 per day for

the more idiot-proof the system, the more behavior is constrained, forcing people to act like idiots even when it’s against their better judgment. Even when your employees know there’s a better way to do something, they will often be constrained by policies and procedures that were designed to reduce variety in the system.

Our companies have all been optimized for a perfect one-way stream, the line of production, and these pesky customers are mucking about in our operations, and we have now a completely different problem to solve. We need to optimize not for the line of production but for the line of interaction, the front line — the edge of the organization — where

The best way to acquire new customers is to engage existing customers.

What made customers happy a few years ago won’t necessarily make them happy today. In other words, if you’re not learning and evolving, you’re falling behind.

There’s little doubt that a fundamental economic restructuring is underway. There will be winners and there will be losers.

Learning is fundamentally different than training. Training is when a company teaches people how to do stuff that the company already knows how to do. Learning is a way to deal with new, uncertain, and ambiguous situations, a process of exploration by which you come to find and discover new things.

In today’s world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward.