Excellent Business is not Zero-Sum

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  • Post published:March 25, 2015
  • Post category:Excellence

Any business that cannot stay in business is not excellent.

It follows that excellent businesses are sustainable but how do leaders ensure that they give the organization a good chance of attaining excellence?

Simply by being aware that excellent business is not a zero-sum game and so all stakeholders need to benefit.

The first step in enabling benefit for all stakeholders is to be aware of who the stakeholders are and how they differ from each other. At a high level, a list is likely to look something like this:

  • Customers
  • Staff
  • Owners/shareholders
  • Partners and suppliers
Excellent Business

It is a good starting point but it’s wise to examine each group to see if any further segmentation is needed. For example, are all owners equal? Companies can have major shareholders and minor ones and there can also be different classes of shares. If the needs of different shareholders can conflict, it might be wise to consider them independently from a governance perspective. Similarly in partnerships – the interests of a young partner may not be aligned with those of one who is soon to retire.

Also, it is wise not to overlook society as a stakeholder. The organization’s strategy determines the relative weightings the organization gives to each of its stakeholders but unless strategy considers and delivers benefit for all stakeholders, the organization will struggle. It’s a leadership challenge to get the balance right.

In closing, please note excellent businesses need to allow for their suppliers to prosper too – any business that can only survive by killing its suppliers is merely parasitic, not excellent, and risks running out of reliable suppliers.