When you set out to build and lead a business, you do you very best to tune in so that you can ensure that it's based on something that has value in the marketplace. If you succeed, it gets off the ground and your role as a leader changes. You find that actually growing and running an enterprise comes with some new responsibilities. There are lots of roadmaps from leading economists, consultants, and many others in the financial community that are there to help you but there is a problem with them at their core. It sounds strange but they all generally reinforce an organizational model that says "show me the money". For those who grow large enough, the big scoreboard on the New York stock exchange cements that importance with daily movements of the one measure that everyone with a vested interest in the company can follow ... the stock price.
When we interviewed CEO's of tuned in businesses, we found something different in their DNA makeup and leadership style. It was almost a carefree acknowledgement of measurement in general. They really didn't put undue weight on things like stock price. We focused mostly on the aspects of how they made the decisions that mattered the most to producing positive outcomes ... the products and services they chose to launch ... but also probed a bit more into the kind of leadership style it takes to really pull this off.
That style was brought front and center to me this week. John Moore at Brand Autopsy pointed me to a great article in Time about John Mackey, CEO and co-founder of Whole Foods and Kip Tindell, CEO and co-founder of The Container Store. The article is curiously titled The Curious Capitalists. Skip the early part about their college years and go right to the meat of the article where they take on Milton Friedman's mantra and state that:
Building your business with a focus on shareholder value is a myth.
Instead they talk passionately and persuasively about a new model for building businesses in the 21st century based on 'stakeholder value'. What they say is three things all at once -- simplistic, tuned in and counter-intuitive. Some snippets:
- You should manage your business based on creating value for an interconnected set of stakeholders in it ... customers, employees, partners, investors, the community.
- Satisfy your employees first. If you do,they'll take care of the customer and in most cases surprise and delight them beyond anything you could design.
- Treat your competitors can be a stakeholder too by making you alert to perform better.
- Be transparent and relationship-based as stakeholders value trust most.
- Communicate everything. It is a leaders #1 job.
- Hire only great people. If you're going to start a golf team, start it with Tiger Woods.
Sound a little namby pamby to you? Well, let's look at it from a results perspective then. The Container Store has grown 20% for 30 consecutive years. Whole Foods checks in at 30% and owns the proud distinction from JP Morgan of having the highest multiple of EBITDA in retail. What's more they each own incredibly strong brand loyalty because of their approach. The kind of loyalty that allows them to weather downturns like we're in now.
Being tuned in is a product management, marketing and leadership principle. Its implementation takes on different forms in each. I've found few models as compelling a description for leaders as the one that Mackey and Tindell have perfected. Check it out.
