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Stakeholders' Loyalty

As I have said repeatedly, every business exists in order to serve people, speciically its stakeholders. A competent business organization succeeds at this and strives constantly to succeed even better – to “delight” its stakeholders, if I may put it that way. When stakeholders are delighted with the performance of a business, they become loyal to it – not just satisied, but deeply loyal.

Loyalty is a powerful word, and a business that has been able to inspire it is in an enviable position. When a business's stakeholders are satisied
enough that they are loyal, the competition becomes less relevant. As an example, consider the customer stakeholder. In a normal business relationship, customers compare the products and services they receive from Company A with those being offered by Companies B, C, D, and so on. A customer who is delighted with the products and services of Company A will feel less need to investigate those of competitors. Instead, that customer will vest any need for change in Company A, fully expecting it to continue to outdistance the competition. That is, this customer fully expects Company A to demonstrate not only that it is able to provide the best, most satisfying products and services but also that it is a high(er)-performance company. This relects the customer's belief that Company A has leaders who will change its outputs in ways that will justify continued loyalty.

As an organization seeks loyalty from customers, its high-performance leaders inluence it to proactively develop new and improved products and services for the customer, without that customer having to ask. They also provide customers with the very best information about their own customers. In other words, they partner with their customers, helping them ind new business opportunities.

Loyalty between customers and the business organization is possible only when role model leaders exist in great numbers within the latter. Role model leaders are continuously improving their company, regenerating it when necessary in order to sustain the loyalty of the customer base. The leaders of a high-performance organization, as they seek loyalty from customers, inluence their organization to innovate continuously, to factor their customers into all decisions, and so on. All actions focus on exceeding customers' expectations with regard to cost, quality, and service.

The concept of loyalty as a goal of role model leadership is applicable to the other stakeholders – employees, society, and owners. All of these stakeholders have their needs, and all role model leaders have as their objective a high-performance business organization that is able to inspire loyalty.

Harmonious Relationships

The role model leaders in a high-performance work system make strong efforts to raise their organizations' level of performance, from satisfying needs to inspiring loyalty to the ultimate goal, which is developing harmony.

A harmonious relationship exists when the stakeholders have achieved complete agreement on the purpose of the business organization – on its goals, its values, its beneits to society, and indeed its reason to exist. This
harmony as just described among the stakeholders in the business is a complete alignment of function, being, and will. Furthermore, a highperformance alignment of shared values exists when full understanding at the level of knowledge (function), consciousness (being), and understanding (will) exists.

Or, in other terms …

A true harmonious relationship exists when knowledge is shared among all stakeholders; when we appreciate one another's spirit and character and culture as human beings; and, inally, when we are motivated to understand one another fully and to work together with the shared purpose of achieving rapid and sustainable growth within the organization.

When the state of harmony exists between stakeholders and the business, the lives of people involved will be improved. When the alignment of the function, being, and will of the business organization is fully aligned with the function, being, and will of the stakeholder person(s), there will be a state of shared purpose in terms of values and actions.

More will be said about the importance of harmony in creating effective and high-performance work systems. The harmonious relationship between the shareholders and the business is best understood by segmenting that relationship into its component parts – viability (customers), vitality (employees), and virtue (society).


 
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