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The Entrepreneurial Agenda by Robb Mandelbaum
Recent Entries
Inc.com Featured Blogs
March 24, 2008
What's Most Important? Profits? Customers? Employees?
Posted at 4:00 PM
It's important for every boss to understand what his or her critical functions
are. These might change significantly as you grow. You might, for example, start out doing all of the sales for your company and end up doing very minimal sales as you grow. But it's important for you to decide what's most important to you.
When I started in business, I used to think my one and only job was to take care of the customers. As I grew, I found out the hard way that it's very easy to have happy customers but still not make any money. Inappropriate pricing or lack of control over costs can quickly turn what seems to be a profitable sale into unproductive busy work. It took me a few years to figure out that having happy customers and making money is clearly related to having happy employees. My big revelation came years later when I realized that I find tremendous payback in knowing that I have made a positive impact on my employees by offering them opportunity, security, self-respect, and a sense of mission.
So what's important to you? Are you happy with just one or two of the three: happy customers, good profits, and happy employees. I have seen many companies that have managed to survive with just one or two of them. Or do you want it all?
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Employees are by far the most important part of any business. My corporate advisor and I had a discussion very recently about the difference between one company over another (in the same industry). Fundamentally, the only thing that is truly different is the people working at each busienss.
If you take away all our customers, revenue, and processes tomorrow, but allow us to keep the same staff; we will have a new business generating revenue, and creating value for our customers in no time. I truly believe this fact.
At Web Advanced, we do our best to provide our staff with everything they need. We are not a huge company, but we are growing at a pretty good speed. Our success is only possible with our committment to bring in quality people and provide our staff with what they need to become successful.
Sincerely,
Vic Liu
CEO
Web Advanced
www.webadvanced.com
Our focus, mission, and vision all rest strictly on our clients. We serve struggling teenage girls and their families (we operate a residential treatment center).
I know and agree with the argument that we need to take care of employees so that they'll take care of our clients. I think taking care of client and employee is important.
With Respect,
Dustin Tibbitts
New Haven
I also understand that business is about making money, and if we have money, we can please employees and surprise customers.
But if I'm forced to choose the "one" thing that is most important, I have to say it's the families we serve. When we make decisions, the families are our first priority, then the employees, then the bottom line. If there is ever a decision that pits one against the other (as infrequent as that may be), I side with the families first.
Obviously, decisions are rarely that "cut-and-dried". The reality is that we deal more in matrices or continuums. I've found, though, that the more time I spend directly with our clients, the better a leader I am, the more salient my decisions are, the more in tune I am with what clients want (and pay for) and the more respect my employees have for me.
This is why a strong vision statement is important. To me, the purpose of most 'for profits' is.... well, profit. Without it people cant grow and customers, by default, will go somewhere else.
Without maximum engagement of the right employees, its guaranteed that profits aren't being maximized.
Doing business using the right employees with the right customers and not being afraid to let the 'wrong' of either go is a big part of what leadership is all about.
Jay in the end its not about any of them but rather the value system of the corporation. What i mean is if your value system is not strong regarding employees, customers or profits any success you have, however great will be unsustainable. Look at Enron. So an organizations DNA and than how it gets translated in the pursuit of all three will ultimatly determine your success in reaching and sustaining your goals.
Jay,
I think it is possible to have all three and I believe that it should be the goal. Like one of the posts above, we are a client focused company. I often say that every decision we make must take into account what it's impact is on our clients. When you are able to establish a clear focus for your employees and set good expectations, the employees you have know what they need to do and those that your hire come into a positive environment. At a minimum, this creates satisfied employees. Like your point, looking at all the people that your company supports can be very rewarding. I take this a step further and make sure my employees know that this is a job first. We are here to serve our clients. What they get for that is a paycheck. The bonus is that with a clear company focus and employees who know what they need to do, you can create a workplace that is both rewarding and, sometimes, fun. Finally, the more profitable the enterprise, the more you can invest in pleasing your clients and getting and keeping happy employees.
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