Clients are those entities for whom an organization exists to satisfy their needs.

Who are those clients?

According to the Chicago school of economics, led by the Milton Friedman thesis and followed largely by economists worldwide, a business organization exists to make profits for its owners.

If so, the clients for which the business enterprise exists are the investors with a need for a Return On their Investment.

But what happens when the focus is on profits for the owners and the customers in the marketplace are the means to satisfy investors?  When this goal displacement takes place what happens?

Does anyone truly believe that the customers, the clients in the marketplace, really need food laced with chemicals to make it last longer on the shelf? Or fast food that makes the consumers obese and thereafter sick with diabetes and other diseases?

Customers, to their detriment, are often not served what they truly need but what will make profits for the owners. It is not a market-driven economy. It is a financial market driven economy.

And what else suffers? The water that gets polluted, the air that gets unbreathable, the rivers that are un-swim-able , the society that is burdened by unemployed people who cannot join the circle of work, technology wade them replaceable and retraining is expensive and left for the  taxpayers to finance that.

Who sits on the Board of Directors that directs all strategic decisions of the company? Do you see any representative of the customers? Of the community, or of the environment? It is only the representatives of the owners. So, who is working for whom really?

What should it be?

The customers should be the clients, the purpose for which the organization exists.  The owners, investors should be only the stake holders to be satisfied only enough to stay engaged. Not more.  Profits should be constraint goals, goals not to be violated, not deterministic goals to be sought and the more the better.

            That was the case, I suggest, when craftsman dominated the market. There was pride in the product produced and loyalty to and from the customer. Today customers are a statistic. 

What dominates and directs executive decision making is the stock market, if one is a public company and if not, the business culture fed in business schools to produce profits as much as possible. Management has to “dance to the tune of the stock market” and its expectations to perform better than expected. Earnings per share are the goal. Even well-meaning executives have no choice but to “dance”; if they miss expected earnings per share of their company they might be replaced.

So, who is driving the system? I suggest not the people, but the system is driving itself and we all dance to its tune. All this talk that the customer is the king is talk. The earnings per share is the king, the emperor and the tsar.  

Just thinking,

Ichak Kalderon Adizes