Processes vs. Products and services… What is the most important thing when creating a company?
There are many reasons why an entrepreneur triumphs or fails, but in an information age economy, one glimpses brightly.
The reason why organizations like Amazon and Walmart are so successful is because of how their leaders have built their businesses. Something key is that these leaders value the processes over products or services, which is a completely different approach to most companies, particularly startups.
These organizations DO NOT CENTER on any specific product or service and are able to innovate in ways that companies based on products and services CAN NOT, because they are designed to adopt new ideas and get rid of old ones. Since these companies are not “tied” to the success of any specific product or service, all available resources DO NOT FOCUS on preserving any product or service that excludes other opportunities, especially the best ones.
A process-driven enterprise is designed to scale and take advantage of innovation opportunities. Focusing mainly on building functional and effective processes, creates in companies a certain level of flexibility which gives them the advantage of being able to respond quickly to customer needs, as well as changing or completely abandoning current products and services with less effort when is necessary.
Go into any Walmart or enter the Amazon website and you will quickly see the power of the process over the product. These businesses are able to exchange products, expand to completely different business areas when an opportunity comes, and alter existing business structures due to well-established and rigorously tested processes.
Focusing on products and services, excluding everything else, has been and continues being the “Achilles heel” and the fall of many profitable and successful businesses. The entrepreneurs who consciously make the change to the administration of processes and NOT of products or services, are the ones who will dominate the commercial landscape, always changing, with increasing complexity, the “new normal” of the business climate.