I speak to business students at a local university every semester and I always open my “lecture” with this question: What’s the most important thing in business? Clue: It’s a six-letter word that starts with P.
Invariably, the first answer I hear is Profit—to which I say, “Wrong!” Usually the second word I hear is the right one: People—to which I say, “right!”
Business is a game and the score is kept in money. If you win—make enough money—you get to play again. If you lose, it’s a single elimination tournament like the recently completed NCAA basketball “March Madness.”
I then remind them that everything that happens in business starts with the actions of people. Done correctly, the founders of the business set a “purpose” for the business—beyond the obvious one of making a profit.
Pharmaceutical giant Merck has a good, simple purpose statement: Our business is preserving and improving human life.
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Once that is communicated, understood, and embedded in the minds and hearts of the people who work for the company, then the people can proceed to create and operate a business that serves that purpose.
People make the plans, execute them, decide what to sell, to whom, where to get it, and how much to charge. People also decide on structure of the business (how it’s organized, what people in what places, etc.) and the processes used to get things done.
If the people do all of these things well, fulfilling the needs of customers compared to competition, then profit will be the result. Like the scoreboard in sports, profit is the measure of how well the people “played the game.”
Is having the best people enough to guarantee success and profit in business? No, far from it. But it is the critical starting point. There must be that worthy purpose, and the people need strong leadership to take the organization where it must go, and have it do what it must do.
Strategies, plans, execution, metrics and much more are required for the people to succeed. But lacking good people, like a sports team with weak players, makes it so much more difficult. With strong, talented and motivated people, today’s tough global competition is still a big challenge; but without them, it is almost an impossible challenge.
Therefore, the next time you face a decision that involves people in your company, your organization or anything else, stop and think about the most important P-word.