Satisfy All Three Key Stakeholders

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As leaders of our companies, we have three key stakeholders: customers, employees and shareholders.

While some “experts” focus on one as “the priority” group, wise leaders need to address all three. If your customers aren’t happy, ultimately you will lose their business, leading to employee losses and reduced shareholder value. If you don’t give employees a chance to be engaged and grow, they will not give the extra effort needed to achieve full customer satisfaction and maximize shareholder value. Finally, if you don’t care about shareholder value, you will limit access to capital resources, which will adversely affect both employees’ and customer satisfaction.


At any given time, you may need to decide which is the most important, and focus on that constituent in order to eventually serve all of the shareholders. Zappos, for instance, puts employees first, believing that happy employees lead to satisfied customers whose increased purchasing satisfies shareholders. Car companies that ignore early signs of defects often do so because shareholders are being prioritized; however, as the last few years have demonstrated, with over 20 million recalls, when customers’ safety is ignored, and the employee culture discourages acknowledgement of the problem, the ultimate result is that both shareholder value and employee opportunities are diminished.


The key is to always keep the eye of meeting the needs of all three stakeholders. Decades ago, Johnson and Johnson’s Tylenol packages were tampered with in stores leading to seven deaths. Acknowledging their credo of putting customers first, they took their product off all shelves, not just those in the geographically affected areas. It cost hundreds of millions of dollars. The company then created a new tamper-proof package which allowed Tylenol, within some 18 months, to resume its leading marketplace position. Employees to pride in their jobs and their company; so did potential shareholders as the longer-term shareholder value increased.


Most important, as leaders, we need to learn from these experiences so when we need to make the hard decisions, we make the right ones. More recently, Johnson and Johnson experienced problems with a few other products; the new leader team did not quickly move to protect its customers, hoping the situation could be contained and resolved. The result was poor press, employee disappointment, and lower enthusiasm by shareholders.


Have you had to balance the needs of these key shareholders and choose one to get the priority for today’s action? How did it turn out? What lessons did you learn? Share them with us!