Good business

As a teenager I couldn't quite get my head around business terminology. Words like operations, marketing, supply chain and procurement meant nothing to me. It seemed that business was complicated. My Mum was a Pharmacist and my Dad an Electrical Engineer. I could understand what they did but no-one really explained how companies worked.

I thought about doing Business Studies at University but couldn't get excited enough to choose to study it and instead chose Theology and Religious Studies. This involved a lot of human questions. We studied different religions, ethics, sociology and philosophy. Admittedly this might seem equally complicated to some people but for me it was a good fit.

Since then I've understood how businesses work by being part of them. I do now understand most of those previously complex terms.

After 25 years working the penny has dropped. Business can seem complicated. It doesn't have to be.

Helping people

Good business, in it's purest form is about helping people.

Farmers help people by providing food for them to eat

Telephone manufacturers help people communicate easily

Airlines help people visit friends and family

Recruiters help companies find people to join their team

Investors help entrepreneurs to get their business going

Lego and Minecraft help children develop creative skills

Companies that are successful in helping people can grow fast. As companies scale and grow, we humans use a great trick to get things done; division of labour. We all have different skills. Those of us that are good with numbers might take finance, those that are good at persuading people might do sales. Organised people might do operations and those with empathy, work in customer service.

This method of course has many benefits, efficiency being one of them. We're all different and can work with our strengths. It's a very logical thing to do but it has side-effect that we need to be aware of.

The more we divide roles, fewer people talk directly with customers, the people we are helping. This is a problem because it's only when you truly understand your customers can you properly help them.

Organise around your customer

A new generation of companies are finding ways to keep their teams directly in contact with their customers.

2 examples;

Transferwise, with over 450 people, have software engineers that talk directly with their customers. They work in small self-managed teams. Division of labour is around customer needs, not around functional areas.

Buurtzorg community nursing in the Netherlands have thousands of nurses working in small self-managed teams deciding on how best to serve their customers.

Remove abstraction

It's my view that whilst division of labour is useful to a point, it creates abstraction, i.e. it distances us from our customers. Organisations with increased division of labour end up with decreased customer empathy and it become more difficult to provide meaning to customers and meaning to employees.

I'm not saying we shouldn't have specialised roles. Not at all. We need specialised skills. What I'm saying is that we need to avoid creating specialisation when none is needed.

We also may need to focus on initiatives to increase customer knowledge and awareness in non-customer facing teams.

As humans, we are social animals designed to succeed by helping each other.