Who Do You Love?
It seemed as I was graduating from college in the early 1980's, prevailing business thought revolved around a passion for the customer. Business writing seemed to be dominated by the power of the customer at least from a marketing perspective. Customers selected the style of car and the flavor of food. Customers were front-and-center of marketing thought and business motivation.
Beginning in the mid 1980's, coinciding with a general acceleration in technology, the focus started to change. Technology brought about the idea that businesses created value with their hope and that was reflected in the stock value. Shares of stock and shareholders became the central focus of business motivation. Every business wanted to create value for their shareholders. In the interest of shareholder value we experienced the travesty of Enron and WorldCom and we're seeing the current stock market bust. Many have prospered from the stock market run-up that ended in October of 2008. Fortunes were made, until recently.
In both cases, the groups of people businesses seemed to focus on caused the very problems the businesses experienced. Your customers can run your business in the ground. Customers are fickle and their preferences change quickly. Unfortunately, stockholders are more skittish. The market gives and the market takes away. It seemed in late summer of 2008 that the Dow Jones averages would move 2-3% in a "normal" business day. One news item could create a 5% swing in the value of the market. Companies met expectations and their price dropped. Fortunes were made and lost in the perception of a single report from the government related to jobs or consumption estimates.
Now that we're all reeling from the roller coaster of the last 20-30 years, can a business succeed? Can it even hope to thrive? Can business focus on a group or goal in order to operate above the drama of customer whim or the fear and panic of stockholder opinion?
There's an old analogy about breakfast that may give us the answer. In a traditional bacon and eggs breakfast, the chicken and the pig each contribute, but only the pig gives his all. In business, customers and shareholders are chickens (no pun intended). Since they choose to participate, their contribution is conditional. Employees are represented by the pig. They contribute their life to a business much like the pig donates his life to a breakfast. Employee contribution to a business is greater than shareholder or customer contribution because of the relative cost to the contributor.
So, what if business operated to reward the people making the greatest contribution? What if businesses operated for the benefit of their employees?
When a company can put their people first, in the truest sense of the word "first," they create a natural motivation for rational performance and measured improvement over the long haul. That rational ongoing continuous improvement in-turn creates a compelling competitive advantage. No employee-first company would price themselves out of business. Nor would they chase the stock market or make irrational sacrifices to hit quarterly targets. Employee-first companies will excel at the important things necessary to improve all employee's quality of life for the long run. Operating in their own self interest, they will charge a fair price and provide excellent service because fairness provides greatest likelihood of securing the future of the jobs they have. They would continuously improve and cautiously hire because those practices provide the best chance for long-term employment. They would train people and take care of the environment since those things also impact their own quality of life. They would even go so far as to make sure that their associates truly improved as a result of the organization's success. They might even create a Dream Manager position to help their people accomplish their personal dreams. But that's a topic for another post.
Wouldn't you love to own or work for a company whose people are the true priority?