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.
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.
If you can tune into the fantasy life of an 11-year-old girl, you can make a fortune in this business.
I'm a believer that you accomplish much, much more with direct relationships than by using an intermediary. And that cash you keep in the bank can be the difference between staying alive as a small business, or not.
When we started the e-commerce, nobody believed that China would have e-commerce because people believed in 'guang-shi,' face-to-face, and all kinds of network in traditional ways. There's no trust system in China.
Virtually every company will be going out and empowering their workers with a certain set of tools, and the big difference in how much value is received from that will be how much the company steps back and really thinks through their business processes, thinking through how their business can change, how their project management, their customer feedback, their planning cycles can be quite different than they ever were before.
I may be a businessman in that I set up and run companies for profit, but when I try to plan ahead and dream up new products and new companies, I'm an idealist.
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