I recently attended a breakfast where the CEO of one of Australia’s ASX Top 10 companies was speaking. At the end of his delivery, he opened up the floor to questions. After a range of questions specific to his industry, a question came from one clever observer who had been keeping an eye on the share price of this company. He wanted to know whether this particular CEO put the most focus on shareholders or staff or clients.
It was a great question.
Now given his position and the fact that a mere comment from a public company CEO can wipe millions off the market cap (look up Gerald Ratner, who lost £500 million overnight for his comment that earrings from his chain of stores were cheaper than an M&S prawn sandwich but probably wouldn’t last as long) he had to be very careful with his answer. He gave a waffling answer that had lots of words but didn’t really say anything and kept the share price intact.
I have no such responsibilities, though, so I thought that today I would tackle this question. Which should you focus on more in your business? Your clients or your staff or your shareholders (or owners) or the products you are selling?
Let me pitch the argument for staff.
I often say that in sales, he with the best knowledge wins. To take it a step further, he with the best staff wins. If you have staff that have intimate knowledge of your products and can deliver exceptional service to your clients, then surely the individuals you have working in your organization are more important than the other items I have mentioned. Policies decided by owners smoking cigars in ivory towers mean nothing if there are not exceptional foot soldiers to deliver on said policies. Clients don’t interact with policies — clients interact with your staff and, ultimately, people buy from people. It looks like an open and shut case for the staff in an organization being the most important facet and everything else will fall into line.
Hold the bus.
The Soup Nazi example
How would your staff perform if the product you had to sell were overpriced and inferior to your competitors’ products? You have great staff with great knowledge and they are delivering exceptional service — but the widgets you are supplying are terrible and everyone knows the price is way too high. Great staff can only go so far. They can’t make clients buy rubbish — and if they were delivering fantastic customer service then they would find it hard to recommend inferior products. Conversely, think of Seinfeld episode 116, “The Soup Nazi.” Jerry says “the guy who runs the place is a little temperamental, especially about the ordering procedure” and Elaine says that she has “never been so insulted in my entire life” and “there’s something really wrong with this man” but, because his soup is so good that it can’t be eaten standing up because your knees will buckle, customers put up with the eccentric and rude nature of the owner and continue to buy his soup. I know it is only a TV show, but I am sure you would know of examples of great products where, at best, you tolerate bad service.
Based on this, it would appear that the product is king.
As much as it now appears that it is a lay down misère, for the sake of completeness, we really should explore a business that has a focus on delivering profits for shareholders and owners. We often read about some great businesses across the world and we marvel at the wonderful products they are delivering. We acknowledge the contribution made by business leaders. The Bill and Melinda Gates Foundation has donated $3.5 billion since 2000 to eradicate polio from the world and, in conjunction with Rotary, the world may be polio free by 2018. (There were only 19 new cases last year.) Regardless of how good your products are and how great your staff is, if the business is not making money for its owners or not delivering dividends and growth to the shareholders, then the business will have a relatively short life. Some of the best ideas went nowhere because the business model didn’t make money. The profits were simply not there. Profits allow you to invest in R&D and make great products and hire great staff. It also allows the business to continue to operate and not close the doors. That seems an important aspect in a great business.
Maybe a focus on delivering profits to shareholders is the most important aspect after all?
Clients are king
Lastly, let me explore the case of a business that puts clients above all else.
If you don’t have clients, you don’t have shareholders or business owners. If you don’t have clients, you don’t need any products to sell to them. If you don’t have clients, you don’t need any staff to service those nonexistent clients.
If you don’t have clients, you don’t have a business.
It seems to me that, while every aspect of a business is incredibly important and there is a symbiotic relationship among all components listed so far, your clients are king. If your No. 1 focus is to deliver great solutions for your clients and put them at the center of your universe, the profits will flow and the best staff will want to work for you and, by the very nature of providing the best solutions, you will source the best products. As much as a noncontroversial answer would be that all parts are equally important, my opinion is that your business cannot survive without clients. Do everything you can to attract and retain those clients and provide solutions. It has been said that money is something you make while providing solutions for clients, but I go a step further. A business is something that runs while you are providing solutions for clients.
The real downside is that you will have to trash those posters that proudly exclaim how great the job is — except for those damn customers!
Photo credits: Pixabay