January 29, 2004

Interesting discussions with two different clients today about the death of shareholder value as a single driver of business targets to the exclusion of all else.

As I have been predicting for some time, the language of shareholder value is changing, softening on websites, in annual reports and internal communications in Europe, tempered by one scandal after another in companies which focussed on narrow definitions of success and corporate duty.

It is absued nonsense to try to build a business on giving shareholders loads of rewards. The core of every successful business is providing customers what they want, in a profitable way - a rather different emphasis.

I cannot understand how apparently intelligent and experienced executives could possibly see otherwise.

Satisfied customers must be a first priority and focus. Placing shareholders first in the feeding chain creates a culture where executives are tempted to cut corners, short-change customers. You cannot allow pressure from shareholders to suck the business dry.

See presentation slides on Real Success
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