Isn’t it nice when the lights go on in a CEO’s brain? It’s even better when what those lights illuminate is a point so simple that even dimwits like me got it quite a while ago. That happened the other day and I almost drove off the road when I heard the report on the radio (yep, I still listen to good old news radio even if it’s side by side with the newer satellite flavor).
But let’s slow down and explain and see what you think. Maybe it’s even instructive!
The report I heard was about the CEO of GlaxoSmithKline and his company’s very commendable effort to lower the price of some vaccines in developing nations. As The Guardian reported:
GlaxoSmithKline has agreed to sell a vaccine against diarrhoeal disease in the poorest countries for £1.50 a dose, a twentieth of its £30 price in developed countries.
“I hope this will enable millions of children to receive this vaccine,” alliance chief executive, Andrew Witty, wrote in the Times. “Importantly, this offer is sustainable, because we are recouping the cost of goods and manufacture.” Calling on drug companies to be “in step with society”, Witty said they should construct their goals around business models that address the world’s urgent health needs.
He went on to say (I’m paraphrasing here) that it turns out that putting people ahead of profits can be a good business model, albeit apparently only in developing nations. I’m glad he realized that letting your potential customers die if they can’t afford your products doesn’t sell more product. In a similar vein, the food industry might be realizing that selling products that make your customers hypertensive (too much salt) and obese (too much hidden sugar) doesn’t quite work either and selling them a healthier product keeps them buying longer.
So let’s all try to remember that putting our customers first actually is good business. Then again, maybe you already realized that quite a while ago. Perhaps you feel, as do I, that making a fair profit selling great products is a really good thing, especially if what you’re selling improves the quality of people’s lives. While I’m glad Mr. Witty came to this realization, I’m not quite sure why it’s OK to continue to charge 20 times more for his product in richer nations when there are poorer people in those nations as well. But one step at a time.