I won’t keep you in suspense. Here’s the question: Who comes first?
It seems to me that organizations have to choose. Is it shareholders, customers, or employees that will come first? And you can’t say all three. Yes, all three are important. But one has to come first. Because the answer drives the vision, mission, and values of the organization. It drives company culture.
Here’s an example. Herb Kelleher, co-founder and former CEO of Southwest Airlines, always said employees come first. The philosophy being that, if companies treat employees right, then employees will treat the customer right, and customers will come back spending lots of money to make shareholders happy. The Marriott Organization has the same philosophy tied to their company culture – employees first.
Now, this also doesn’t mean that the distance between first, second, and third has to be great. It could actually be quite small. The idea is that there are times when the organization must make business decisions and understanding who comes first can make all the difference in the answer.
- Does the company pay a dividend to shareholders or invest in new technology that will make online orders more customer-friendly?
- Should the organization give employees the ability to resolve any customer issue up to $1,000 without consulting management OR require every customer problem to be escalated?
- Would the company be better off showing a big profit and high turnover because employees are underpaid and stressed out OR a smaller profit and lower turnover?
You’re right. In each of these scenarios, there’s probably some room for compromise and a win-win. However, we’re also not naïve. There are organizations that focus on one group to the exclusion of the others. Maybe because their jobs are secure only when shareholders are happy. Or they feel that customers won’t leave them because they are the only game in town. Or they’re a big employer in a small town, so employees aren’t going to quit.
In today’s business world, there’s no room for short-sighted thinking. The business market can change quickly. I must say that, given the number of times I’ve heard the Kodak story over the past six months, the Kodak company has become this decade’s case study of a company culture that didn’t see change, acknowledge it, and make a plan to address it in time to thrive in a changing market.
Same applies here. The answer to “Who comes first?” drives the vision of the organization. In turn, it creates organizational values. Who comes first defines what success looks like in the company. It also demonstrates a level of vulnerability regarding how the organization will take risks and where they might make mistakes. Organizations that want to stay on top of their game, have to know not only who their constituents are, but who gets top billing.
Let me add one last thing. I think it’s okay for organizations to change who comes first in their company culture. So, if your company currently puts stakeholders first but wants to change to employees first, that’s fine. Do it. But beforehand, have a conversation with senior management, make sure everyone is on board, discuss what it means for decision-making and policy. Communicate the shift with all constituents. Set new expectations (and remember to hold everyone accountable for the new direction).
This is a really tough decision. Organizations should discuss it at length. In fact, I wonder if you brought it up, would everyone answer the same way? Hmm…wouldn’t that be an interesting question?
Image captured by Sharlyn Lauby just off Duval Street in Key West, FL1