So who is “standing outside with his arms open wide”?
Great question.
I want to discuss the dichotomy between shareholders and customers:
Goals-oriented boards have their jobs hinging on leveraging maximum wealth to shareholders by producing the best financial results possible (within the realm of the law, so we are told). So the shareholder can actually compromise customer values based on the mandate they give to the executive.
If the shareholders were all individual customers were there might be some sort of democracy at the Annual Meeting, where the customer/shareholder would get to vote on whether they wanted 10% less product in the same packaging for the same price, or keep the product the way they need it and earn a lower dividend.
In the goals-oriented enterprise both ends are fighting the middle and compromises are felt at either end of the spectrum through customer attrition or shareholder revolt. The only way to beat the trap is technology. The advances in product shelf-life, time to market, distribution and communications infrastructure are seen through packaging, production engineering, product formulation, paperless communication et al. Technology is the most significant reason the wealth mountain keeps growing and that products keep pace or exceed current levels of customer expectations. Ironically, tech stocks are the most volatile for shareholders to invest. Just think of it as new snow hitting the peak. Avalanches happen from the top down. But I am going off at a tangent. In the goals-oriented business, if you don’t have your technology working for you then you can’t demonstrate increased competitive efficiencies to support quality merchandise or services at a convenient and affordable price.
In the customer-centric world I like to use the model of the local barber. Same chair, same scissors, same smile and customers that last for years. There is a way out of the rat-race and your customer is your best ally.
In order to maintain the balance of customer values and loyal retention, shareholders need to be put in touch with that customer-centric philosophy and review their expectations of short-term gain. We live in a day-trader mentality where there is no concept of loyalty. To the absolute contrary, the day-trader whizzes in and out of stocks without a thought of any consequences but his own. It is the antithesis of relationship building. I won’t dignify it with a metaphor because it verges on something crude. I don’t imagine a day-trader regards his customer relationship with any of the stocks he trades. I also doubt that a day-trader is as aggressive in his/her retail habits as they are in their stocks trades.
Can shareholders be in touch with a customer-centric philosophy? Absolutely. Shareholders are a different segment of the marketing audience. They are as responsive to the concept of one-to-one orbiting relationships, because that supports their own expectations. What they are not hearing is the customer-centric philosophy within the heart of the enterprise. A shareholder can comprehend the sense of the position only when it is communicated centrally to the goals of the corporation. A shareholder will extend their trust to a management vision, whatever it may be, for a period of time, to see what will come out. When the prediction fails to materialize then the bottom falls out.
What if loyalty, frequency and continuity were central to the management vision of the company, and they were able to demonstrate their success not just in dollars and cents. It takes a quantum leap out of the day-trader mentality to comprehend that a business that keeps its customers, can also keep its shareholders, even when it is not doing quite so well.
So the answer to the original question: who is standing outside with his arms open wide? It is the CEO who doesn’t have to compromise his customers to meet his shareholders expectations and doesn’t have to compromise his shareholders to support his customers’ values.
Wouldn’t that be something?
