Who is more important – customers, employees or shareholders?
From 1991 to 1996 I worked for a large Australian oil company. At the time the oil industry was undergoing massive change both structurally and competitively. Low-cost competitors, like Liberty Oil, had entered the market forcing pump prices down and compelling the industry to reduce its operating costs to remain competitive.
The company restructured twice during my time but continued to lose market share. They were rapidly trying to re-engineer their business model to combat a competitive threat that they had under-estimated. They couldn’t do it. Fifteen years later, after the business continued to shrink every year, the remaining downstream operation was sold to a competitor.
One of the things the company tried to implement was a company-wide ethos to focus everyone’s attention in the same way. The key to this was the CUSTOMER PEOPLE PROFIT mantra which they hoped would prioritise company efforts in that order. Translated another way it meant that the needs of customers came first, employees second and shareholders third. Their logic was that if the company was customer-centric then the staff would align behind that, leading to higher profits for shareholders.
At the time I thought it was naive. I still do. Twenty years on, I’m not really sure which group is more important. They’re too inter-connected to try to prioritise which ranks first. They all need to be taken seriously and be paid adequate attention. If any of them are disenchanted then this will eventually lead to problems with the other two.
An unhappy or unmotivated work-force will be unlikely to produce top-notch customer service and this will eventually lead to sales and profit problems and difficulties with shareholders. Conversely, difficulties with shareholders will be distracting to management and will have a negative effect on customer and staff relations if not dealt with.
The thing to focus on is having a clear, concise plan that everyone understands – including customers, staff and shareholders. This will help to set everyone’s expectations at the same level which is very important in any business setting. Having all of these groups involved in the planning process will ensure “buy-in” and greater commitment. No-one can argue if they were included in the process and are encouraged to participate.
It all comes together if you execute the plan well. Of course, that’s not as easy as it sounds but if the future path is understood and all the key stakeholders are aligned then you’re miles ahead of many other businesses. Naturally things will change and new opportunities and risks will emerge as you move forward. The best response to it is to stay nimble and make changes quickly which is much easier to do with a cohesive group with common goals working together.
So who’s more important – customers, staff or shareholders? I haven’t got a clue and I’m not sure it really matters. What is important is to treat them all well and be inclusive and transparent with your plans, objectives, successes, problems and challenges. It’s best to go even further than this and spend some time understanding their individual expectations.
You can’t satisfy everyone all the time but nor can you satisfy them NONE of the time. Taking a balanced approach seems to be the only sensible option, doesn’t it?