Monday, April 6, 2009

You've got to serve somebody. But who?

It seems to be sinking in, finally, that the Wall St (and hence B-school) fueled obsession with having CEOs focused on shareholder value at all cost was twisted, toxic, unsustainable logic.

Shareholder value is, and always has been, a by-product of productive employees successfully answering an unmet need or want of customers. You serve customers. With well-served employees. Then you serve your shareholders. That's the only model that sustains.

Steve Jobs is infamous on Wall St for defiantly thumbing his nose at the traders and speculators, repeatedly saying that he would prefer to focus on making insanely great products that work and let the stock price take care of itself.

Yesterday, Om Malik posted a very nice bit about a recent Bob Iger comment that underscores this same, noble view:

Disney’s Iger Shows Up The Street

Walt Disney used to say, “We don’t make movies to make money, we make money to make more movies.” It’s good to see that ethos is still alive and well at Walt Disney Co.. When a bunch of Wall Street analysts and toy retailers expressed doubts about the financial potential of Disney’s new Pixar movie, Up, CEO Robert A. Iger told The New York Times:

"We seek to make great films first. If a great film gives birth to a franchise, we are the first company to leverage such success. A check-the-boxes approach to creativity is more likely to result in blandness and failure."

Well said. It is easy to fall prey to a “check the boxes” approach and veer away from the core beliefs and values of your company. If that happens, you’re left with forgettable products that lack vision.
Today, the customer is evolving into a self-organizing community This is not a passing fad or trend. This is a fundamental shift. Technology will continue to make it so. Serve your community, from the inside, not as leader to followers, but as supportive co-author and active participant in the experience.

It Takes guts. But it pays huge dividends in loyalty and the multiplier of WOM. Wall St will take care of itself, assuming it can right itself.

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