Today’s post asks whether an organization’s long term financial health is best served when the organization’s main focus is to increase share price each and every quarter, or if more value is generated by putting the customer their needs first.
Recent literature on the subject implies that the popular trend of the last three decades may not be the best choice – prioritizing share price above all else may actually rob longterm shareholders of wealth that could have been generated with a customer first policy. In the January-February 2010 issue of the Harvard Business Review, Roger Martin (dean of the Rotman School of Management) took a close look at a few companies that put the customer first. Interestingly, many of these companies generated strong shareholder returns compared to the S&P 500 while creating customer loyalty (or because of it).
