The value of involving your stakeholders in company decisions
Imagine you were driving around town with family members with your convertible top down, zipping in and out of traffic, maneuvering brilliantly around slower moving vehicles and taking hairpin corners with squealing tires and flying gravel. Does that sound like fun to you? Imagine the exhilaration – the adrenaline rush – your heart pumping…just a complete thrill to those who love to drive!
Now…imagine what your more conservative passengers might be feeling. What if they are scared out of their wits? What if they are hanging on for dear life, praying for “terra firma?” What if the shear terror of riding with you makes them never want to enter a vehicle with you at the wheel again?
This is what can happen with our businesses when we focus on one or two things, and don’t pay attention to the “big picture”: how the decisions you as a business leader make affects your primary stakeholders: your customers, employees, shareholders and your community. The simplest illustration being that if you disregard the way customers feel about doing business with you, and you offend them, they just won’t do business with you.
How many times have you been upset by the way a customer service representative treated you or the level of service you received from a company versus what you expected? You probably didn’t do business with them again, or at the very least, you thought long and hard before you did.
As business leaders, we tend to focus on one thing: the financial component. However, when developing new products or services, making changes in the way we deliver them – or the way we position the company, these decisions directly impact our stakeholders. This being the case, we would be justified in asking them what they think – not just doing things and hoping for the best. This is why so many companies invest in test marketing, customer feedback, town hall meetings and other ways to communicate their thoughts and ideas before launching them to the general public.
Is there a cost associate with this? Yes. There are tradeoffs.
- You could create as many products/services as possible, push them out to the marketplace, market them, use partnerships, etc., and make some sales. Some sales are better than none. However, time to market is relatively quick. You can sometimes make changes on the fly. You can bury the product if it doesn’t meet the performance requirements you have for it. We’ve seen this in the Android tablet market. Imagine the cost associated with developing, marketing and distributing products that ultimately fail.
- You could work with your shareholders to develop and deliver and extraordinary product that the marketplace has a need and interest in and a willingness to pay for. This will probably result in ongoing sales and company loyalty from the shareholders who invested time and energy into helping create the product or service. It will take longer to develop. It will cost you more up front for a number of reasons. However, we have seen companies such as Starbucks become wildly successful as a result of making these investments. On the other hand, I am certain there are many more companies that scrapped project ideas and saved large amounts of money, company reputation and stakeholder value from the same investments.
Does that mean that every product or service brought to market will be the next Facebook, iPhone or Kleenex? Of course not. But it does mean that you will avoid some of the mistakes many companies have made on their way to success or failure.
Don’t just watch the road; value your stakeholders. Build an extraordinary business.
Aepiphanni Business Consulting: The Business Strategy People is an Atlanta, Georgia based Operations Management and Business Strategy Consulting Firm dedicated to serving the needs of small to medium sized business leaders. We help business leaders DESIGN| CREATE | BUILD extraordinary businesses. We support our clients with financial management, product and service production and delivery, outsourced services management, sales & marketing and business growth. We provide them with a number of flexible solutions to help them reach their goals.
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