Putting money before customers is bad for business

For some time now Nairobi Women Hospital has been trending in the media for all the wrong reasons. The hospital allegedly put commercial interest ahead of its customers by giving staff revenue targets. In order to meet the revenue targets doctors resorted to giving patients prescriptions they did not need or had costs exaggerated.

In other words patients allegedly were coerced or manipulated to consume services they did not need to meet the interest of service provider.

This is not a unique problem although it’s the first of such a magnitude to be exposed in Kenya.

Whenever institutions that were started with a very noble vision of serving customers deviate and instead think they exist to be served by customers the result is almost always disastrous.

One of the key cases of how awful things can turn when revenue is put first is the infamous incident of American bank, Wells Fargo. In 2016, the bank fired 5,300 employees in bid to bring sanity and regain public credibility after scandal erupted. It emerged that they were involved in over two million phony accounts that cost the customers and eventually the bank colossal sums of money in pursuit of targets.

The management tied a substantial piece of these employees’ remuneration to very high sales targets and made reaching them a condition of continued employment. So employees engaged in malpractices in order to meet the target and secure their job.

This is one of the ugly faces of putting money, and not customer first in business.

It is indisputable fact that many people start business with noble objective but after some time other interest may start competing with the founder’s vision.

Lack of systems and discipline to give direction and guard the vision of the founder are the major cause of the downfall of most ventures. Basically a new firm is driven by founder’s vision and passion. If you as the founder fail to build structures and systems as the business grow, the venture may deviate at some point to a point of no return.

When the firm grows and new managers are hired and expected to perform, there is a high risk that they may become obsessed with endless pursuit of results. When every company decisions is based on what the results should be and how to get there – strategy and tactics – and forget why the company was founded in the first place, that marks the beginning of the end.

Basically in a vision-driven company strategies are developed to advance a worthy cause. When that cause is put aside, strategies are developed to only advance the results. This is what triggers all manner of malpractices and eventual downfall of a company that was started with a very good vision.

Monetary gains are always the bonus or by product of impacting people lives. The higher the impact the more money an organization makes. There the best strategy that every firm ought to seek with passion is how to create the highest impact on people’s lives.