The late Peter Drucker once remarked that “Companies don’t make money. Companies make shoes.” What he meant was that every business exists to fill a need (e.g. shoes) in society which will be rewarded with profit if done effectively.
Management should focus on the “shoes,”…or whatever it does that its customers really want. The money will follow.
If you’d like a specific example of a leader that believed, and lived, this conviction, look no further than Bill Hewlitt and David Packard, the eponymous founders of technology legend Hewlitt-Packard.
In 1960, David Packard gave a talk at his company that explained “why companies exist.” You can read it on the Farnam Street blog:
After doing so, I suggest you read the whole story of the company in Mr. Packard’s memoir “The HP Way” for the inspiring tale of how two entrepreneurs began in a one car garage in Palo Alto, CA and ended as business legends. This is not a story about a technology company, but about how to run a business.
