A profitable business provides motivation for ongoing growth and development. A business does this by finding a need in the market and aiming to fulfil these needs through its products and services.
For example, Johnson & Johnson exists to advance healthcare to people of all ages, and in the case which I am familiar with, NIKE exists to help athletes improve their performance in their sporting pursuits.
This is the point of origin in which the company started, because:
- They are convinced of a better solution to what was available then
- They sense an unfulfilled needs that can benefit the target market
There is a difference in NIKE selling shoes because it has the best designed shoes in the market place or NIKE selling shoes because it can help an athlete achieve a personal best. The former relates to NIKE seeing a market opportunity for it to compete in whilst the latter is more about NIKE driving its beliefs and passion about helping athletes succeed.
If NIKE were in it to make money, then it could well sell dress shoes in addition to the sneakers range. In fact, it is what they did when the Swoosh logo became cool. In the 90s, mass consumers started to wear NIKE because it was cool and fashionable. NIKE decided to launch a range of `fashionable’ NIKE labelled products, including jeans and other apparel range to appeal to the fashion conscious. The brand became undone very quickly. Its core market segment, the sportsmen and women who value the performance-driven focus on the products, began distancing themselves from the brand. There is no performance focus on NIKE’s product design anymore; the emphasis seems to be on the design and colour.
As a result, NIKE lost it market share leadership to Reebok. Luckily it didn’t take long for NIKE to realize and the product strategy reverted to its performance-driven design roots, where it was able to recapture its dominant position.
The product still appeals to the fashion conscious, but from NIKE’s perspective, it is an added benefit to the appeal of the brand. Its core product design focus continues to deliver products that drive performance and function, and that basically contributes to its continuing success today.
Have a think about this. If you have started out your business on the order of `What’ is your business, `How’ are you delivering it and `Why’ is it good for your customer, do the following instead:
Question `Why’ you are in your business in the first place, `How’ are you taking it to market and `What’ can you offer to your customers. It can radically shift your thinking on your business model and how you can deliver it.
I treasure one of the hand-outs given to me when I was at NIKE, which I still refer to occasionally. It was a copy of the original document titled NIKE Principles. It outlined NIKE values and was handed out to its employees in the 70s when NIKE was a fledgling corporation. Type-written Principle #10 reads, “If we do the right things we’ll make money damn near automatic”.
Not exactly politically correct corporate language but it is a crystal clear message that resonates true even today. I interpret `do the right things’ as incorporating passion into an area of expertise that you have and believing that it benefits your target market. It sums up the “Why” in which you are in your chosen field of business in the first place. In NIKE’s case, it is to help athletes improve on their performance.
Question your “why” if it is something that you have not put much thought into before. It can help provide clear thinking to the existence of your business, know if you are in it for the right reason and potentially help you refine your business model for success.