When asked about the purpose of business, the inimitable Peter Drucker answered, “The purpose of business is to create a customer.” Ask the question in any MBA class, and you’re sure to get a range of answers that include:
“The purpose of business is maximizing a profit for the shareholders.”
“The purpose of business is to create a valuable product or service.”
or for the more idealistic…
“The purpose of business is to provide a forum for people (employees) to exercise their gifts earning a living.”
Any business must be able to answer the question as to why it exists. But we’re asking a more general question. Not, “what is the purpose of our business?” but “what is the purpose of business?” The three answers, above, revolve around three different pillars: Making money, making a product (or service), or making a living for employees. But what if the answer to the question doesn’t revolve around either/or, but both/and? We think it does. From a systems perspective, we believe organizations can create a positive feedback loop in which the three pillars reinforce one another to create a growing, thriving business:
Our systems counterparts out there may point out that positive feedback loops are inherently unstable. We hope so! Stable systems with negative feedback loops are important in nuclear reactors and in automobile cruise control. As a former nuclear engineer in the U.S. Navy, I’m thankful that as the reactor went super-critical, there was a negative feedback loop that kept it from spinning out of control. But, as a business owner, I’d be perfectly happy for the loop pictured above to lose control. In fact, we strive very hard for this kind of business instability.