I was listening to a podcast the other day when the speaker said something that caught my ear.
She said “CEOs have to deal with three stakeholder groups – customers, employees, and investors. All three of these groups, if left to their own devices, would bankrupt the company.”
It was an elegant way of articulating the role balance plays in driving sustainable growth.
The same lesson showed up a few days later when I read a piece on how Costco and the Four Seasons have achieved the elusive goal of “sustainable growth.” I particularly loved this quote toward the end:
“A business analyst…may conclude that dynamically changing prices, given customer traffic and competitor prices, would increase profits (or that adding more products would increase sales). Sinegal would also look at those numbers. But he’d consider other connections. What would changing prices do to the trust Costco created with its members? What would it do to the productivity of its employees or their ability to serve the members? Even if it is profitable, is constantly changing prices the right thing to do?”
One organization I worked with used a simple Venn diagram to see how well they were balancing stakeholder needs. The diagram had three circles – Customers, Employees, Investors. During strategic planning, teams would use dot stickers to represent each project under consideration. They’d place a dot on the Venn diagram based on which of the three stakeholder groups that project would benefit.
Programs that benefited all three were a no-brainer. Unfortunately, they were also rare. Ideas that were good for one or two groups were still on the table, but leaders didn’t want the end portfolio too heavily weighted toward one side or the other.
This exercise was far from an exact science, but it kept the need for balance top of mind in the long, complex planning process.
Does your organization do anything similar to balance customer, employee, and investor/owner needs?
Or maybe to balance the needs of different customer groups?
I haven’t seen it elsewhere, but I keep hoping.
