The Customer Wants Something. You Can Supply It. Is That So Hard?

Cross section of a corn cell. Image source: WikiMedia
Cross section of a corn cell. Image source: WikiMedia

Management is so difficult, and so many businesses go under, that we sometimes wonder how anybody makes a go of it. Then there are times when the opportunities are so plain, it’s remarkable that so many people fail to notice them.

Today’s post is a happy one about someone who didn’t fail to notice an obvious opportunity.

Decades ago, grain dealer Lynn Clarkson, founder of the Illinois-based company Clarkson Grain, took trips to Chicago to talk to food producers and look for new customers. What food company buyers related in these meetings was that much of the corn they were purchasing on the market was too variable, making it difficult to process.

Clarkson told them that this problem had a simple cause,” Dan Charles reported this week on NPR’s “Morning Edition.” “They were getting perhaps 30 different genetic types of corn in each shipment.”

Clarkson’s solution was to start selling, as he put it, “a single variety, a single hybrid, delivered at any one time, so you’re not mixing different cooking characteristics.”

Flash forward to today, when “GMO-free” foods—those devoid of genetically modified ingredients—have become all the rage with Whole Foods shoppers and other health-conscious consumers. It turns out that Clarkson, because of his longtime expertise in producing single-variety crops, is now in the perfect position to supply this suddenly hot market.

“We don’t tell people what their values should be,” says Clarkson, who notes that he actually began serving the non-GMO market 20 years ago in Japan. “We inquire, and then we do our best to support those values.”

What Clarkson has successfully developed is what Peter Drucker called a “specialty market”, which, as we’ve noted, is accomplished by looking at new opportunities for a niche and getting there first.

And yet, as Drucker found, to his continued mystification, so many businesses never figure out how to satisfy even the most glaring customer needs.

“The father of systematic economics, David Ricardo, is believed to have said once, ‘Profits are not made by differential cleverness, but by differential stupidity,’” Drucker wrote in Innovation and Entrepreneurship. “The strategies work, not because they are clever, but because most suppliers—of goods as well as of services, businesses as well as public-service institutions—do not think. They work precisely because they are so ‘obvious.’

What’s your take? Why do so many businesses fail to pursue the obvious opportunity?