It has come to my attention that some leaders think that business is all about technology, money, manufacturing processes, or the supply chain. This is nonsense. All successful companies revolve around human needs.

Without people, every patent in the world would be worthless. People are the ultimate consumers of every product and service, even the most obscure manufacturing technology. Even in business-to-business sales, people make the decisions about what to purchase and when.

Corporate leaders go on and on about building – and sustaining – competitive advantage. Companies try to compete on price, quality or design; these create temporary advantages at best. The only lasting competitive advantage is knowledge your company possesses – that competitors lack – about the people your company serves.

Why is this true? Such knowledge enables your firm to make loyalty more convenient than disloyalty. It becomes easier for customers to work with you than your competitors. It becomes easier for you to understand and serve their needs. It becomes easier to make a fair and sustainable profit, because you don’t waste time and money on activities your customers don’t value.

Not everyone agrees with me. Some managers despise the thought that people matter. They think business success is all about managing the numbers; that’s why you see firms cutting employees to boost profits. Ah, but this is a very, very short-term strategy. You can’t cut your way to success, especially if you forget that business is all about people.