Every company is established to fix frictions in the market. To fix those frictions, companies must acquire and accumulate capabilities. Capabilities come via pillars which include tools, processes and people. These three pillars are then used to organize and reorganize factors of production to create products and services that are deployed in the markets, as forces, for customers to purchase, to overcome customers’ frictions.
How companies handle that transmutation of turning ideas and raw materials into products and services will determine their competitiveness in the market. Innovation happens when they maximize the outputs, from the lens of productivity, so that the customers are best served even as the least possible utilization of inputs and resources. The mechanical advantage is solidly positive!
Markets reward companies with revenue, as revenue is what companies are compensated with for creating and releasing the forces of products and services, which have the ability to overcome the frictions customers have. When a company consistently delivers innovatively, the reward increases and that means growth is happening.
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In summary: markets have frictions as customers have needs, and companies are established to create products which are special forces with capacity to overcome those frictions. For overcoming their frictions, customers reward companies with revenue. Innovative companies do that overcoming in brilliant ways, and overtime, they get rewarded with tons of revenue, enabling massive growth.
In this lecture, I will explain the Mission of Companies and the very essence of why we have companies, linking market needs, innovation and growth. Tekedia Mini-MBA LIVE Session begins on Saturday. Join us as we have seats for you here.
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