When you think of the primary stakeholders in your business, who do you think of? Often we hear public company CEOs cite shareholder value as the reason the company acts in a particular way. This is wrong-headed thinking and leaves the shareholder with less value than if the CEO were to concentrate his or her efforts on the primary stakeholders.
Your employees and your customers are your primary stakeholders. If you firstly take care of your employees (Southwest Airlines and Vail Resorts are both famous examples of this), and if you provide a clear vision with an emphasis on anticipating customer needs and making it better, your employees will by default take care of your customers. And when you have happy customers, assuming you have priced your products and services appropriately and have thoughtfully managed your costs, you automatically will create shareholder value. In short, create value for your employees and your customers, and they’ll create value for you and your shareholders.
It’s too bad that too many companies start off small with this in mind but as soon as their IPO hits, their focus shifts to quarterly earnings, managing analyst expectations, and other items that fill an SEC filing but do little to help employees or customers.
But you don’t have to be like them. You can concentrate on your employees’ happiness, and your customers’ delight. The rest will take care of itself.