Many people believe that the sole purpose of business is to make money.
When you overemphasize profit — particularly short-term profit — you wind up creating a culture that underemphasizes customers.
Just ask the fine folks at Goldman Sachs.
In a scathing op-ed for the New York Times, former Goldman Sachs Executive Director Greg Smith announced that he was resigning after 12 years because “The interests of the client continue to be sidelined in the way the firm operates and thinks about making money.”
According to Smith, Goldman cares more about making money off their clients than making money for their clients.
Smith writes, “Not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.”
It doesn’t take a financial future or fortune-teller? to predict what’s going to happen next. When the good people start to leave, the clients soon follow.
There are two big lessons here:
- When you emphasize short-term profit over long-term customer satisfaction you eventually implode.
- The way leaders talk about customers matters.
When leaders believe that their sole purpose is profit, they tend to view customers as “its.” They’re no longer human beings, they’re anonymous targets and prospects whose sole purpose is to help you make money.
Smith describes a culture at Goldman where leaders routinely referred to customers in disparaging manipulative terms. He writes, “Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal email.”
A junior employee who hears the boss call a customer a muppet isn’t going to pay much attention to customer needs or concerns in the future.
Even if you don’t use disparaging names, referring to customers as targets and prospects isn’t much better. That kind of language creates a culture that says, “We don’t exist for customers; customers exist for us.”
When leaders talk about customers only as a means to achieve their own goals, it trickles down. People no longer care about helping customers, they just want to make money off them. And it’s only a matter of time before the customers start to feel it.
I suspect there are more than a few Goldman customers out there thinking back on their last interactions with their rep. Would you want to do business with a firm that treats you like dumb puppet? No offense, Kermit.
But now flip it. What if instead of just focusing solely on profit, the company’s higher purpose was to serve customers?
What if the leaders talk about customers as people they want to help rather than targets they want to close?
I’ll tell you what happens. You wind up creating a company like Apple, Disney or Southwest Airlines. Companies that make plenty of profit because they hold their customers in high regard.
I’m sure the money boys at Goldman will survive and continue to haul off dump truck loads of cash. But the erosion of trust that began in 2008 continues to deepen.
Profits are important; you can’t serve customers without a healthy bottom line. But when you make profit your sole purpose, it’s only a matter of time before customers figure you out.
Lisa Earle McLeod is author of “The Triangle of Truth,” a “Top Five Book for Leaders.”