Finding the right balance of delivering value to shareholders and stakeholders is one of the critical things every business needs to do. Unfortunately, the prevailing business climate that seeks to drive share price and not disappoint shareholders is often dominated by concentrating too much on strategies that achieve short term results at the expense of long term sustainability. It is a mindset that seeks to extract as much immediate income generating potential from clients and compromises on delivering enhanced value to them. This short-term profit at all costs is one of the biggest contributors to a very distorted view of the God given hierarchy of value.
People & relationships trump money and transactions
I strongly believe the only way we can co-create long term sustainable business and economic growth is if we restore the hierarchy of value. It's a hierarchy that places the value of people above money, and relationships ahead of transactions. It's based on delivering maximum value to people and allowing the money to flow from the genuine value we offer to clients. Businesses that intentionally allow this thinking to flow through in the way they operate internally (engage with staff), and in the way they take and offer their products and services to the market will establish a competitive advantage that will not be easily challenged and deliver long term profitability and growth.
Touching people’s hearts
The interesting fact is that the delivery of enhanced value can be the most inexpensive thing to do, because it is often an attitude issue and not a monetary one. It has to do with how we make people feel. ‘When you touch someone’s heart in a positive way they will come back for more’. ‘The way we touch people’s hearts’ within our businesses will determine the level of engagement of the staff and determine the level of intellectual and emotional investment they will put into the vision and mission of the business. It will also determine the level of effort they will commit into positively touching the hearts of clients’ as they do their jobs.
The impact of morals
We are increasingly seeing the evidence of what an unethical lifestyle can do to destroy value in business. Unethical behaviour destroys trust and hence relationships. Trust is the fuel that powers business forward. Trust is ‘the firm belief in the reliability, truth, or ability of someone or something’. When there is trust more transactions take place, when more transactions take place there is growth. When trust is lost the reverse happens. This is true for any transactional activity – whether it’s staff doing their job, clients buying products or services or shareholders purchasing shares.
Forbes top 10 corporate scandals in 2017
A quick look into 5 of Forbes 10 biggest business scandals in 2017 highlights the impact that an erosion of trust due to a disregard to the value of people and relationships can have on bottom line performance –
- United Airlines and the ‘dragging of a blooded passenger’ off one of their planes that resulted in a mass consumer boycott
- 21st Century Fox and the Bill O’Reilly’s sex scandal that resulted in advertisers suspending their segments
- Uber got embroiled in numerous run ins with the law and an internal sexual scandal which resulted in a loss of market share (much to the delight of Lyft)
- Equifax sold client data illegally to third parties for a profit affecting 145 million customers
- Wells Fargo charged clients for auto insurance that did not need and had to pay $80 billion in remediation and suffered big client losses
All 10 scandals that Forbes listed show either a complete disregard to the principle of making money by enhancing value to clients and/or living a life of decent morals in leaders private and public life’s.
Investing in value and trust
Long term value creation requires an investment in people and relationships because this is where trust is birthed, and trust drives transactions – transactions that will profit everyone in the value chain – staff, management, clients and shareholders. This is how the Creator intended business to be. People and relationships first – out of that will flow transactions and money.
‘The love of money is the root of all evil and results in the destruction of people, the love of people is the foundation of life (and business) and results in much long-term blessing.’