“A
business exists for one reason, to create a customer.” Those are
the immortal words of Peter Ferdinand Drucker, arguably the greatest
business mind to ever live. Drucker's quote may seem obvious to you,
but it is something that a lot of people either don't know or forget.
Have you
ever heard it said that fundamentals win championships? It's true.
And, that's why I like to constantly review the fundamentals. The
Drucker quote is obvious, yet it is also profound. In fact, I wrote a
blog post solely about the subject (Here it is) If you haven't
already, please read that post now.
As I
stated in that post, if the objective is to create a customer, the
two main functions of a business are innovation and marketing. I
think we all have some idea about the nature of marketing. But, a lot
of people don't really understand innovation.
Innovation
is sexy. It conjures up images of the wild, western frontier. It
makes one think of places like the Silicon Valley. Places where the
renegades flourish and the old rules no longer apply. Where
billionaires can show up to work in hoodies and a pair of jeans.
Places where scruffy-faced twenty-somethings, grind it out, around
the clock, in a rented garage.
While it
is true that a lot of innovation is happening in the Silicon Valley,
the reality is, innovation is happening everywhere. Wonderfully
innovative things are happening in Cincinnati, where you'll find
Procter and Gamble. And, one of the world's most innovative companies
is located in Saint Paul, Minnesota. The Twin Cities are home to The
Minnesota Mining and Manufacturing Company, now know as 3M.
As you
can see, innovation is happening in small start-ups and it is
happening in companies that are more than 100 years old. In the case
of P&G, they've been around for almost 200 years. Everyone
can innovate because all innovation really is is the increasing of
customer value. Innovation is the act which endows, or increases, the
value of a resource. Whatever that resource may be.
This is
a really important point. Because, the fact of the matter is, you
are a resource. Are you aware of that? I think we all know this. We
have all heard of the concept of “Human Capital.” And, today,
it's more important that ever.
We live
in the age of information. But information is basically useless. Did
you know that? Information is simply data, and it has no real value
until it is turned into knowledge. And, what turns data into
knowledge? Correct! The human brain does.
The
truth is, life has always been about information. It's just, today,
there's more information flying around than ever before. The
“Information Superhighway,” aka the internet, has turned data
into a commodity. Data is practically worthless. However, when
information is plentiful, knowledge becomes scarce. To put it in
nerdy math terms, information and knowledge are inversely
proportional. This is what we call, “information overload.”
Knowledge
is a function of the human brain. Knowledge turns data into something
valuable. Knowledge is innovation. So, whenever you increase your
level of knowledge, you have innovated. Makes sense, right? I mean,
innovation is about increasing the value of a resource. You are a
resource. So, when you develop yourself, congratulations, you are an
innovator.
I
intentionally made this blog post a little bit esoteric. A discussion
about data, information, and knowledge is kind of weird. But, I think
that's exactly why it's important. You're meant to think about what
I'm saying. Grapple with it. Try to understand the truth about
information and how, in modern times, it's your mind that is most
important.
Drucker
had long wondered why people were always listed, on a company's
balance sheet, under “Liabilities.” Of course, the company has to
pay people their salaries. So, we can see how companies could come to
such a conclusion. The problem is that we all know what to do with
liabilities, we cut them or reduce them. This is the wrong mindset.
If you
understand the true nature of our knowledge society, you will see
that people are assets, not liabilities. And, what are we supposed to
do with assets? Correct again, we want to make them grow.
Regardless, of whether or not you work for a big company, you should
be focusing on growing your number one asset. That asset is you.
Benjamin
Franklin is quoted as having said something to the effect of, “An
investment in knowledge always pays the best dividend.” Old Ben was
a smart dude. We should take his advice. And remember, by investing
in yourself, you are an innovator. Because personal development is
innovation.
