Episode #416: Stakeholder, Customer, Employee - Whose Interests Should Leaders Prioritise?

Shareholders put up their future security in the hope of increasing their returns and adding further to their security. They take risk of losing some or all of their dough. CEO remuneration is often tied to how well they increase value for shareholders by driving the share price up and paying out regular fat dividends. Customers buy the product or service, so without them being enthusiastic, the scale of the revenues will fall and so will the share price and dividends. Without engaged employees, the customer won’t be satisfied with the quality of the solution or the service provision. If you don’t care about the company, then you are unlikely to care about the firm’s customers. These interests are not always aligned, so where does the leader need to assign attention?

There is no business without a customer and the reason you have customers is because your staff make sure you have repeater customers, rather than single transactions. CEO attention however is not always focused on the staff. They can see the staff as a tool for arbitrage in order to get more revenues. The “pay em low and charge em high” type of mantra. The USA has confused the world with its up to 300 times ratio between the CEO remuneration and the lowest paid employee. The fact that many failed leaders of big corporations get hundreds of millions of dollars when they are forced out is also astonishing.

I don’t see that as a sustainable model for Japan. As leaders here we need to be focused on recruiting and retaining the best team members we can afford. Recruiting them will only become more fraught in Japan and retaining them will be ever challenging. The way to attract people is by having very deep pockets and paying tons of dough to the staff. If that isn’t an option, then we need to build a culture where staff will trade money for the environment. Getting paid a lot of money to work in a toxic environment isn’t sustainable and eventually people crack and look for a better environment to work in.

How can we engage our staff so that they don’t want to leave and while they are with us, they want to work hard for the enterprise and want to support each other in that process? Gallup’s 2021 survey in the US found that 36% of staff were engaged, 50% were either indifferent or compliant and 14% were disengaged. Japan is hard to judge with these Western surveys. Japanese staff are conservative in their estimations because they are always thinking in absolute, rather than relative terms. Also, questions such as, ”would you recommend our company as a place to work for your friends or relatives?”, have a lot of cultural issues in Japan, that we don’t have in the West.

This is one of those key “engaged or disengaged” decider questions in these surveys. Japanese staff don’t want to take the responsibility in either direction. They don’t want their friends complaining to them about the company they have now joined. They also don’t want to have the company complaining to them about their friend they have just introduced. Better to give this question a low score. Overall Japanese surveys are always at the bottom globally but is that really an accurate reflection of the workforce?

What do staff want? Here is what we found from our surveys looking at the emotional drivers of engagement. Number One was they want the leaders to have a sincere interest in the employee’s well being. The key word here is “sincere”. This means taking a holistic view of the employee and not seeing them as an arbitrage opportunity or a tool to spoon up more revenues. Another key phrase is “well being”. In this modern age employees are taking responsibility for their kids, but also for their parents, as the latter age. That means they need a supportive work environment that puts health and family health above company health.

Sounds sensible, but is that the case down at your shop? As the leader, is that how you are talking and making decisions? Is this an approach that is sustained right throughout the enterprise from top to bottom? Are all the leaders walking the talk, starting with you? There is much more required beyond mere words and slogans to make these approaches the daily reality. Coaching and communication skills for leaders will rank at the top to encourage staff to believe what the company is saying. How would you rank these two skill sets across your leadership bench? If it isn’t where it needs to be, what are you doing about it? Everything is related to everything else, so it needs a complete solution rather than a fragmented result. How is that coming along?