TiER1 Blog

Who’s the Customer?

Ultimately all business transactions are about the exchange of value. A vendor provides a service or product of value to an organization who ultimately adds value to it, creates something else of value and passes it on to another organization until ultimately a “consumer” receives value…which is the ultimate end of the value chain. Or is it the beginning? Since that consumer also, presumably, is a producer of value exchanging their knowledge and/or labor to some company that gets value from it in exchange for cash. And in this virtuous cycle lies a constant exchange of value where money is the arbitrary medium used to quantify the value created.

So ultimately it begs the question of who really is the customer? In a barter economy, both parties were clearly customers – each producing products of value to each other and exchanging them, possibly just to be exchanged with someone else for something else of value. Money helps reduce the friction of an economy allowing us to exchange more goods and services for more goods and services. So why, in today’s economy, does the party providing the money constitute the role of customer?

In my opinion it doesn’t. Both parties in each exchange are customers of each other. Philosophically that means we have to treat vendors, suppliers, contractors and most certainly our own associates and employees as though they are our customers. They are all “buying money” and paying for it with their service…which we combine and turn into something more valuable for our clients. This mindset is critical and we see it every day in our own best clients. Those organizations – and individuals – who get that partnering together makes for the best outcome, that having an interest in each other’s success ultimately leads to the success of both of us, are the same ones that consistently have high performance and thrive in their own marketplace. It’s not a coincidence. Understanding that we are all part of a large value exchange and not in an isolated value stream that flows one direction, is critical to understanding how to succeed within it.

What does this have to do with knowledge? Ultimately learning and knowledge in business are contextual. Too often the learning processes of organizations are very disconnected from the functions that drive value. Ultimately learning and knowledge transfer in an organization are only worthwhile activities to the extent that they create value – for the organization’s customers by providing better products, better quality, etc. OR for the organization’s investors by providing more efficiency in the company and thus better return on the capital (i.e. “value”) they’ve exchanged with the company OR for the organization’s employees who are being compensated for the value they contribute both by the cash (salaries, bonuses, benefits etc. they receive) and by all the intangibles they receive…such as training, education, and personal development. In all of these cases learning and knowledge transfer are value-creating activities in a broader value-exchange. All of us are charged with understanding how what we do ultimately contributes value to others and also knowing how to appropriately quantify that value so we can invest in it appropriately.

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