Monday, November 2, 2015
Do CEOs Value Investors more than Employees?
Who Comes First?
A company is operated by its employees, run by a CEO, financed by investors, and so on. In this matrix of varying types of stakeholders, we thought that it would be stimulating to find out who was considered to be the most important in the eyes of the different individuals.
To understand what perceptions people had, ValueStrat Consulting and Customer Value Foundation conducted a survey on corporate executives and asked 4 basic questions as follows:
1. Who comes first in your view?
2. Who comes second, in your view?
3. According to you, who does your CEO consider comes first?
4. According to you, who does your CEO think comes second?
All questions are to get the views of only the executive. In the first two they give their view and in the 3rd & 4th they give what they think their CEO’s view was.
The results of the survey are as follows:
Executives’ view of who comes first and second
We found that 71% or nearly three-quarters of those surveyed felt that according to them, the Customer comes FIRST while about a fifth (21%) felt that the Employee comes First.
Just over half (54%) executives felt that the Employee came second while a quarter (24%) felt that the Customer comes second.
This is a very interesting point because it means that a staggering 95% or almost all of them respondents felt that the Customer comes first or second in their scheme of things. Also, according to 75% of the executives, employees were in the top two important entities.
Conclusion: In the view of the respondents, the Customer is on top, followed by the Employees
Now let us look at what the executives thought their CEO’s view was. We did this by asking how they thought their CEO would answer the same 2 questions, and here are their answers:
What Executives thought their CEO’s view of who comes first and second
45% of the executives felt that their CEO would think that the Investor comes first while 42% would put the customer first. Only 9% put the employees first.
Bottom Line: Surprisingly (or not), we can discern a distinct disparity between what executive felt about who is important and what they thought their CEO considered important. And they clearly felt that their CEO thought nothing much of their employees. That they cared more for their investors than their employees!
The results are startling in that the executives did not share the views they felt their CEOs had. This is a huge disconnect between executive thinking and their perception of CEO thinking! This being the case, it is imperative that the company takes measures to remove this perception-gap and align the processes for better efficiency and profitability.
ValueStrat Consulting @ValueStrat helps businesses understand where they are currently and what they need to do to get where they want to go. For this, we provide essential strategic plans and approaches, called “Keys”, to enable businesses to open up competencies, create value and deliver profitability. ValueStrat gets to the DNA of business - Desire, Need and Ability - to help you ask some critical questions such as discussed above. Check out http://www.valuestrat.in for more
Customer Value Foundation (CVF) helps companies to Create Value for the employees, business partners, customers and society and thereby for shareholders. Visit www.customervaluefoundation.com to know how to help your company Create Value.