Shareholder value or customer delight? Choose

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It doesn’t work if you fill up the tank with petrol when your car runs on diesel. It doesn’t work to turn up at a nightclub and expect to get peace-quiet. It doesn’t work to drive down the wrong side of the road at a busy time when there are lots of cars on the road and expect no problems. It doesn’t work to turn up in your bikini for work or to turn up with your business suit to sunbathe on the beach. And almost all of us get that.

So why is it that in the world of business we forget this. Why is it that we still cling to stupid ideas, and practices, like what gets measured gets done. Rubbish. In the world of business what gets measured gets gamed. And if it isn’t being gamed now, then you can rest assured that someone is working on finding a way to game it especially if his/her bonus cheque depends on that measure.

Take the idea of best practice. When all the players in the industry go for best practice, the best practice is to do something totally different. Isn’t that what Jobs did? And in the process he reinvented and created industries. So worshipping at the altar of best practice and benchmarking is a stupid practice especially if you are on of the followers, the laggards.

Then there is the stupid idea that you can generate genuine collaboration and teamwork within the organisation – social business – when the context the players operate from is one of competition: for resources, for recognition, for rewards. In a context of competition what shows up is competition. If you are stupid enough not to accept this and demand collaboration then you will get competition disguised as collaboration.

Which is the most stupid idea of all within the realm of business? It is the one that was invented some 30 – 40 years ago. It is the idea of shareholder value as being the sole purpose of a business and its management team. Why is it stupid? Allow me to quote Roger Martin, Dean, Rotman School of Management:

Customer delight is a more powerful objective than shareholder value ….. if you take care of customers, shareholders will be drawn along for a very nice ride. The opposite is simply not true: if you try to take care of shareholders, customer’s don’t benefit, and ironically, shareholders don’t get very far either.

A lot of the issues that I see in the customer thing is that many of us are attempting to force it into the shareholder value game. And it doesn’t fit. The shareholder value game is the ‘one night stand’ game – get me laid this year! Whereas the customer delight game is a longer-term game, an affair that keeps both parties interested in each other over the longer term.

Republished with author's permission from original post.

Maz Iqbal
Independent
Experienced management consultant and customer strategist who has been grappling with 'customer-centric business' since early 1999.

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