This quote from the guru of management nicely summarises the difference between Web 2.0 companies that have a point and those that don’t.
the business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs
Source: Profitable Marketing: Quote of the Month – Peter Drucker
Hat tip Adelino
Technorati tags: business+model, innovation
Bankwatch 
[Groan]…. sure, Drucker is right. But he didn’t define what he meant by “marketing” and “innovation”.
And that leaves too much room for people to define those terms the way *they* want to, and put everything under the sun under the labels “marketing” and/or “innovation” (remember the knowledge management days of the late 90s, when EVERY initiative someone proposed was a KM initiative?
There are many things being done in the marketing world today under the banner of “engagement” that has a tenuous connection to results.
Personally, I interpret Drucker’s use of the term “marketing” as “creating and keeping customers”. If what you (as a marketer) are doing can’t be linked to that… then it’s a cost.
🙂
Given when he wrote all that stuff, I took marketing in the broadest sense, not just the department.
But I agree its all to easy to misinterpret. My take is that good companies today are focussed on excellence in their product (innovation) and obsessed with listening to their customers (marketing) and recycling that knowledge back into the product.
I wasn’t looking to pick a fight (for a change).
Just that my [cynical] take is that too many companies claiming to be on the innovating bandwagon aren’t REALLY innovating.
Case in point: check out this quote from Seth Godin’s site: http://sethgodin.typepad.com/seths_blog/2007/01/we_tried_everyt.html
No fight taken Ron …. you always have an opinion, and I value that!
I was listening to a podcast interview with Chris Larsen, and a VC guy (below). VC guy was saying that most ventures tell him they have a two month window before someone else will come in. That strongly suggests small iterations focussed on technology, rather than real business level innovation that moves the agenda forward in meaningful ways.
http://edcorner.stanford.edu/authorMaterialInfo.html?mid=1576
Drucker’s point makes great sense when we think of the outlandish salaries that CEOs collect for just cutting costs – cost cutting is a short term, non sustainable growth tactic. If what we need to focus on marketing and innovation is a definition of these terms, how about using one that reads that “they are every enterprise activity that does not lend itself well to cost cutting”? 🙂
Drucker spent a great deal of effort in defining the terms.