This epiphany started with a question asked at a business event attended by senior corporate leaders, credentialed academics, consultants, and a few entrepreneurs and business owners like me. The question: "What is the most important principle in business?" "Operational excellence," said one person. "The business model," said another. "TAM" said a third voice. "Innovation," said another. And so on.
Most of the responses focused on similar strategic and tactical attributes leveraged by smart and successful businesses. However, I believe they missed a critical component that impacts true business performance.
Most businesses think of themselves in narrow terms, describing themselves by the category they operate in or the type of work they do. "We're a manufacturing services creative... transportation... etc business," they claim. This is a trap. What they need to realise is that really, at the root, they are in the people business.
As Peter Drucker, the most influential business thinker of our generation, said: "The only reason for a business to exist is to create and keep a customer." Customers of business are people. Suppliers to business are people. Employees of business are people. Businesses exist only because people serve people. And the tie that binds these three critical stakeholders in any business is one word: Trust.
Trust is one of the most vital management principles. It is a belief in the abilities, integrity, values, and character of any organisation. Trust is essential for building successful relationships and can have a huge impact on business performance from improved financial outcomes and customer loyalty to employee engagement and resilience.
This story is from the July 2023 edition of Indian Management.
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This story is from the July 2023 edition of Indian Management.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Trust is a must
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