What's the purpose of your business?

One of the greatest risks for a business is to not understand why it really exists. Lack of understanding often leads to poor decisions, missed opportunities and even disaster.

This misunderstanding can be seen with Kodak. Consumers were buying memories – Kodak was selling film. As soon as a more efficient method became available, all the IP, infrastructure and experience Kodak had became worthless.

How could this happen? Kodak was a pioneer in digital technology yet, as Pete Pachal writes in Mashable Tech, “they squandered every opportunity they had, finally entering bankruptcy in 2012. They were simply not able to change.”

Like Kodak, many businesses put their products at the heart of their model. When asked what they do, business owners often say, "We make this, or we sell that." The more successful the business, the more entrenched this mistake can be.

There are any number of aspects that can sit at the heart of a business. This may include the owners, a B2B relationship, some unique IP or a current market opportunity. All carry risks when the market no longer values them because it is very hard to change the centre of your model.

So what should be at the heart of your business? Behind every market need is a fundamental truth. Aristotle argues that every human activity is merely the means to another activity, until we reach the ultimate goal – "the happiness of a virtuous life". By understanding this, decision making and knowing right from wrong, becomes straightforward.

Likewise, by identifying the fundamental truth behind customer need, you can build the foundations of a robust business. All other aspects can be flexible and change to fulfill the purpose of the business. This enables:

• Better decision making
• Quicker responses to market opportunities, and 
• Less vulnerability in a rapidly changing world

So what does your business do? Is “consumer need” the centre of your  business model?

Andrew Wylie, Director of Pandemonium Creative, strategic thinkers in marketing, sales and creative.