Business evolution: we do not live on profit alone

Some time ago, in an interview for our blog, Luigi Zoia described business evolution by using Maslow’s hierarchy of needs. In fact, Zoia believes that companies whose objective is exclusively the satisfaction of primary needs, in particular profit making, remain at a very low stage of evolution that does not permit them to take on an important role in the market nor, in the long run, to prosper.

On the other hand, to quote Harvard Business School’s Prof. Levitt:

Thinking that entrepreneurs join the market only to make profit, would be like believing human beings exist only to feed themselves.

Thus, we should consider how to understand business evolution, expand our organizations and promote professional activities by bearing in mind the hierarchical levels of Maslow’s pyramid of needs.

The ‘advanced’ needs of mature markets

We live in a mature society, populated by mature consumers who buy in mature markets. This basically means two things: the products and services of competing companies tend to have similar characteristics and generally offer high quality. In such a situation, the risk is that if consumers are not properly guided and informed, they will be unable to interpret the differences between the various offers, relying only on the price to make purchase choices. But if products and services are comparable, where does their uniqueness lie, and what is their differential value? The answer lies is in the ‘intangible’ components that characterize them! Simple to say, but what are these and how can we identify them? By focusing not on the individual elements that make up the offer but on the original way in which they are combined.

Don’t list the ingredients, prepare the dish

In a previous post we discussed the concept of the offer system and how it has now replaced that of the product or service. The idea is that our customers no longer buy individual products or services from us, but a mix of ‘elements’ (including experience, the style of our relationships, our brand, our reputation …); taken together these make up our ‘offer system’. All this constitutes our real market proposal. A good offer system should meet all the needs listed in Maslow’s hierarchy. Let’s take an example: a car manufacturer should make sure that its ‘offer’ ensures speed of movement (the primary physiological need connected to car use), safety, that it allows the buyer to be recognized and accepted in a particular group of consumers, that it enables him/her to receive esteem and appreciation and especially that it permits him/her to feel fulfilled. Can a single automobile product do all this? Of course not, it takes more.

This is why companies should take care not only to produce tangible ‘output’ but also to exchange ‘shared value’.

Identity and spirit of service

Let’s now see how you can analyse your company or professional activity using Maslow’s hierarchy of needs. Keeping the pyramid in mind, check each level by answering these questions:

  • Which primary customer need does your company’s offer satisfy?
  • How can you ensure the customer is safe in the purchase and consumption process?
  • To which group will he/she want to belong? What does he/she have in common with other customers you already have?
  • How will you make him/her feel considered, appreciated and accepted?
  • What could make him/her feel happy and fulfilled? What values and ideals can enrich the experience that he/she will have with you?

When carrying out this analysis, do not to neglect to consider an important category of customers, without whose consent your entire organization would collapse, i.e. your internal customers — the people who work for you and with you. Then, answer the same questions listed above, but now consider your employees and managers. In this way, you will fully describe your offer system and the identity of the company in terms of what it can give to the market and to all the actors therein, before considering what your company receives.

So, what can you do if you are unable to answer all the questions properly?Business evolution requires a commitment to finding authentic and concrete answers: in order to do so we need to understand our deeper goals and, where necessary, re-direct the organization to ensure it moves up the Maslow hierarchy of needs.

Economics is first and foremost a social science whose aim is to implement new methods and strategies to promote the well-being of humanity. Do not forget this when you are defining your company’s challenges: they cannot be linked to the achievement of profit alone, but must involve something much further advanced, and greater.

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