MtGrizzly posted:
I had a business school professor that said that there are really only three stakeholders of importance to any organization: Investors, Employees and Customers. How an organization prioritizes those stakeholders and places them in a pecking order tells you a lot about that organization. Whichever group the organization places first in the pecking order determines how the company is managed. Slots #2 and #3 will tell you a lot about the tactics that a business will use but the first slot determines strategy. (Still waiting on the book that he’s going to write on the topic.)
Doc’s classic Theory X, 20th century organization almost always places the interests of the investors first, the customers second and the employees last. Some - monopolies like Big Blue era IBM or pre-breakup AT&T, for example - will swap the employees and customers in that pecking order but the oganization is primarily managed for the benefit of the investors. All old-school business classes, from Intro to Business 101 all the way to the 600-level MBA courses, reinforce this notion. The interests of the investor reign supreme.
Unfortunately, somewhere along the line this type of organization stopped being managed for the long-term benefit of the investors and started being managed based on quarterly returns. (Warren Buffet being the shiny exception that proves the rule amd Enron being the dirty example of excess.) In these organizations, folks get fired for a couple of bad quarters and it has resulted in a lack of real, long-term strategic planning. Executives like Fiorina that try to manage for the long term get ousted based on short term set-backs. Like Carly, they often look a lot better in hindsight years later.
On the flip side, we are starting to see (last 30 years or so) a new class of big business that is de-emphasizing the investor and managing in a whole different way. Companies like Costco and Southwest Airlines place the employee first in the pecking order, followed by the customer and the investor last. Their rationale seems to be that happy, enthusiastic employees will take care of the customers and that delighted customers will in turn take care of the investors. It requires a major philosophical and cultural “stake in the ground” type of attitude to implement but it certainly seems to work when it’s done right.
Similarly, some organizations are placing the customer first, figuring that the customer will take care of both the employee and investor through their loyal patronage. (And this is rarer than one might think - many organizations like to tout their spirit of service but no amount of “the customer is always right” mousepads can take the place of true organizational priority on service.) Starbucks seems to be a company that places the customer first, although that’s pure speculation on my part. They certainly make it easy to buy their product and if I need some time with the laptop when I’m on the road, I always look for the nearest Starbucks.
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