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One of the biggest mistakes I have made during my career was coining the term profit centre, around 1945. The truth is that inside the business, there are only cost centres. The only profit centre is a customer whose check hasn’t bounced. We know literally nothing about the outside, and yet, even if you are the leading business in an industry, the great majority of the people who buy your kind of product or services are not your customers. If you have 30% of the market, you are the giant. What that means that 70% of the customers do not buy your product or your services, and we know nothing about them.

These “noncustomers” are particularly important because they would represent a source of information that can help you gauge changes that will affect your industry. How so? If you look at the changes in major industries over the last 40 years you will see that practically all of them occurred outside the existing market, or product, or technology. Whatever the business, senior people need to spend more time outside their own shop. There is no question that getting to know your non customers is far from easy, but it really is the only way to expand your knowledge.

Excerpted from Pages 57-58 of ‘Managing in the Next Society’ by Peter Drucker