Serving Customers vs Healthy Business
“Serving customers” vs “running a healthy business”. This is a model I find useful and I’ve wanted to explore it for a while. If you find it helpful, hit the thumbs up or reply and let me know.
I’ve been thinking a lot about how a business is focused on one of two things: serving customers vs running a healthy business. They’re not mutually exclusive but can sometimes appear to be. When trying to explain the motivations of individuals and systems within a business, it always comes down to either trying to serve customers or run a healthy business. There are of course some situations that aren’t so straightforward, as we’ll see, but I think this is a pretty useful binary for thinking about the functions of a business.
Let’s start by working through a few examples from inside the business.
Photo by Blubel on Unsplash
Responding to a customer email? That’s in the “serving customers” bucket.
Responding to an email from a venture capitalist? That’s in the “healthy business” bucket.
Refactoring backend code to pay off technical debt? Healthy business.
Refactoring backend code to fix a bug for a specific customer? Probably “serving customers”, but depending on how much time you put into the refactoring to avoid future technical debt, there’s probably a good dose of “healthy business” thrown in there.
Calling a customer to collect on an invoice, but before you do, spending half an hour to find the contract they signed, ugh, so you’re clear on what you should collect? Serving customers.
Redesigning your collections process so you can more effectively collect on future invoices? Healthy business.
We’re starting to see that “serving customers” and “healthy business” aren’t mutually exclusive, though specific tasks will fall into one of two buckets. And as the above examples start to illustrate, you can’t always be in “serving customers” mode. Sometimes you have to step back and make sure you’re running a healthy business, even if that means you’re not serving customers directly. And further, “serving customers” is of course itself a function of running a healthy business.
More examples
There are some business tasks that are harder to categorize.
Designing a feature for a new version of the product? I’m going to put this in the “healthy business” bucket. The immediate work isn’t serving customers, but it’s part of running a healthy business that you listen to customers needs and solve problems that they’ll experience in the future.
Jumping on a phone call with a customer, even though they’re not paying for premium support? Serving customers, though you might question how often you make exceptions to the rule in order to run a healthy business.
What about providing a demo of your product to a prospective customer on a sales call? This one is tricky (and probably worth dedicating an entire newsletter to in the future), but I’m going to go with “healthy business”. “But it’s with an individual customer!”, you might retort. Sort of. They’re not paying you money—yet—so they’re technically not a customer, so you also technically can’t say it’s “serving customers”. Yet, while on the call, you want to demonstrate the experience that customers receive. You’ll provide a good pre-sales “customer” experience so they can get a taste of what it’s like to actually be a customer. The discipline and expectation-setting you display in the pre-sales part of the customer journey will demonstrate what customers can expect on the “serving customers” side of the customer journey.
Like I said, it’s sorta complicated, and while on one hand we could say the model breaks down here, on the other hand I think it forces clarity as to how the business is operating. “No, this task isn’t directly helping a paying customer, but that’s okay, it’s part of running a healthy business to do ____”, you might say, for whatever ____ task you have in mind.
Outside example
Let’s look at example from outside the business. Here’s a conversation my father-in-law had with a contractor he had hired to work on his basement:
“Hey, I was just calling to check on when you might be back out to continue work at the house.”
“Why are you calling to complain?”
“Oh sorry—I’m not complaining…”
“Yes you are! You wouldn’t call if you weren’t complaining!”
“I’m really sorry, I just…”
“I can’t talk about this right now! I have to get out of the car and go to the doctor and take a stress test. This is killing me. I can’t handle this stress and now I have to go take a stress test. You’ll have to wait.
[click]
As my father-in-law was showing me some of the work going into remodeling his basement, he shared the above conversation. The contractor he hired to do the project gave him a great price. The references he called suggested that the work would be high quality, but the project might run long. Still, the price was far better than the other bids, so he didn’t mind if it took a bit longer to finish.
It’s not like when the contractor quoted a low price, my father-in-law asked, “Hey, are you sure you can bid that low? Nobody else even comes close. You’re going to work yourself out of a job and lose money paying your subs. This is project isn’t worth it.” Of course not. That’s not his responsibility. But here’s a situation where, when we fast forward a few months, not only is the health of the contractor’s business at stake, but his very life is suffering as well.
In this particular instance, what seemed like a great way to serve the customer—“same quality at lower price”—ended up being at the expense of the contractor’s ability to operate a healthy business. If the contractor is unable to continue providing services—either because he’s not able to pay his subcontractors or he has to quit because his personal health is at risk—that would be quite a negative customer experience for my father-in-law. The homeowner is stuck with a job half-done and has to now go hire a new contractor to finish it. The homeowner wants the contractor to run a healthy business, even if that means , probably, a somewhat higher price.
Focus
Why are we spending so much time on the distinction “serving customers” vs “healthy business”? Isn’t this stuff obvious, and even if so, what’s the point? Okay, fine, but I suspect in our individual roles within the business, we often lose focus . And if we lose focus, we might forget that the entire purpose of our business is to serve customers. As I wrote about in the first newsletter, customers are the only interested party willing to give us money in exchange for a product or service, so the collective energy of the business ought to be toward serving customers.
Yes, there are times we need to turn inwards to focus on running a healthy business. If the business isn’t healthy, it’s not going to be able to exist to serve customers. That’s okay, just as long as it doesn’t overly distract from the ultimate goal of serving customers.
Etc.
I’m traveling with family this week, so I don’t have links to share, but I’m still reading the Alexander Hamilton biography. I’m at the year 1791 in the book. One thing that’s interesting to me is how much Hamilton committed pen to paper to drive clarity (think the Federalist papers in defense of the US Constitution or the treatise on public debt in his argument to convince congress to assume state debts), but when it came to actually making fundamental decisions as a government, that often came down to political maneuvering and compromise. The clarity of his arguments mattered, but convincing people to vote a particular way often came down to intrigue and deal-making. What would it have been like for Hamilton to come to understand that clarity of the written word wasn’t enough?