Traditional management is blind to the value of marketing

For Peter Drucker, marketing was one of only two genuine sources of adding value in an organization. The other was innovation. For Drucker, everything else was a cost.

For Drucker, the very purpose of a firm was to create a customer. This was a thought that never penetrated the skull of a traditional manager, who saw the purpose of a firm as providing goods or services to make money for the company.

For Drucker, the whole firm had a marketing dynamic. Its goal was to create customers. But for traditional management, it's the opposite. Marketing is simply an additional expense on the cost of production, and hence a primary target for cost cutting. These battles are described in detail in book by Al and Laura Ries, War in the Boardroom: See my earlier blog post about this.

It seems that in these hard economic times, the situation has just gotten worse. See Marshall Goldsmith’s interview with Susanne Lyons on The Changing Role of the Chief Marketing Officer: http://bit.ly/a1ocLI

It seems that these managers haven't noticed the consequences of running a firm in the traditional manner: as shown in The Power of Pull , that the return on assets on US firms is a quarter of what it was in 1965. They have missed that the life expectancy of a firm in the Fortune 500 has fallen to 15 years and is heading towards five years. They are not concerned that only one in five workers is fully engaged in his or her work. It's business as usual.

Fascinating to see these upside down values! The very thing that adds value to the firm is a quick win for cost reduction. The perfect low hanging fruit. Remarkable!

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Today the most important question is to sell more and more. If you don't sell a lot you won't be able to stay on the market.