Wouldn’t it be great if the world was just a little simpler? How can we begin to do that? Well maybe you can start here.
Every business ever created runs according to how it is designed to run. There exists an established management SYSTEM for guiding how the work gets done. Sometimes it is quite sophisticated and other times it is so basic (as might be the case of a one man barber shop); that many might argue that, there is no management system here it’s just me and my Customer. But believe me there is always a system and set of processes for ensuring that the business runs according to the designed intent.
I have often said that every business has two basic elemental components in common and they are Capital and People and in this short note I want to focus on the people or the human capital piece, that enables the business ecosystem to function.
So regardless of which stakeholder group we refer to, I believe that the 2 most important questions in business apply to them all.
1. Why do they come?
2. What makes them stay?
I am not going to outline what the possible answers may or may not be for employees, customers, investors, suppliers to name a few of the more common stakeholder groups, but I invite you to go have some fun with these two questions and let me know how they work and what you find out.
I contend that these questions followed by a few more deeper levels of Why, ( or in order to accomplish what) can help uncover the intrinsic motives of all individuals and groups. I also contend that if an enterprise can satisfy the needs of each stakeholder group in a balanced and aligned manner, that the enterprise will endure and outperform the market over time.
I propose that beyond the short term answers, that belong to the lower 2/3 of Maslow’s Hierarchy of needs, people are looking for that opportunity for self actualization.
The job of any quality company is to convince their stakeholders that all participants can achieve that level of personal satisfaction while satisfying the lower level needs of life along the way. Most times the “Why they stay” revolves around the chase of that higher goal. The job of management is to continually reinforce the belief that each can attain that highest level of satisfaction. We have all heard that “Faith (belief) the size of a mustard seed can move mountains”. That simple statement that is 2000 years old holds the key.
How do we get each level of stakeholder to believe with the intensity expressed as able to move mountains. They must believe;
1. In the Mission of the company.
2. The Mission actually yelds a greater good.
3. That the Mission is able to be accomplished.
4. Those that help accomplish the Mission will be rewarded.
5. Management has complete comand of the requirements to accomplish the Mission and the path is clearly defined.
6. There is sufficient raw material and capital to accomplish the Mission.
How deeply the stakeholder group believes in these things will determine the speed and ability of the group to accomplish the superior performance that benchmarks the worlds best companies.
By: Royce Dugan on December 3, 2009
at 9:50 pm
Love it.
I take it your focus here was the employees of a company. What do the questions mean for the Customer group or the investor group as they are people too.
By: patrickhehir on December 3, 2009
at 10:35 pm
I believe that the “Feature” is the same for all groups. The “Benefit” that each group derives changes.
The Feature – Why we do it…
Why do we choose to do business with a certain provider over another… We like to associate with the “Best”. Part of that self actualization comes from being associated with “The Best”, it is safe, they are the “Safe Provider”. Look at the 6 sigma and other “Quality” systems they function around the “need” to make safe decisions by every stakeholder.
We never associate “low Cost” with “The Best” or “Quality” with “Lowest Cost” why? Decisions by each group are made based on the same personal needs of the decisionmaker, be that employee, customer or investor.
The same formula works for each group. Management must determine the “Needs” of each stakeholder group and then funnel the needs analysis through the 6 steps.
The Benefit – What we get…
We chose quality companies, people and products when we need to be “Safe” The glow or reputation of Quality Companies, People and Products increases our “Belief” that we are safe. We can accomplish our personal need or goal by using the goods and services of “Safe” companies. In these cases Safety usually outweighs price. Look at the “6 sigma” result… Why would anyone go through the pain of certification? We believe it makes you the safe choice -That is the benefit to all groups– Where does “Safety” reside on the Pyramid of Needs?? The base, we all seek it, require it must have it before we can move up the progressive levels to self accomplishment.
By: Royce Dugan on December 3, 2009
at 11:21 pm
Appealing; “motivation driven by the existence of unsatisfied needs” applied to focus groups within a company or as discussed here: outside focus groups. As mentioned; aren’t the customers and investors are people too? What are the Feature / Benefits for each? I challenge to consider that the features and benefits may not be the same, and that possibly Maslow’s theory can constrain us.
Perhaps what can be considered a feature to one is perceived as a benefit to others. Take a classic example: a “¾ inch drill bit” with carbide tip and tungsten shaft. To the Contractor or tradesman composition of the item can be viewed as a “benefit” because he “knows” it will out perform and out last similar products. The ¾ inch size is a “Feature”. Examined from different perspective all the customer want’s is a ¾ inch hole. The benefit may be “Service” We will drill the hole for you.
Consider Maslow’s theory again: its hierarchical model suggests, when a lower need is mostly satisfied it no longer motivates and the next higher need takes its place. Can the needs being pursued by an employee, investor, or customer can be driven by different factors?
Cultures are founded on different principles. In the “East” Social needs often trump Esteem. Or the “Starving Artist” in which a person neglects lower needs in pursuit of higher ones. Are people motivated to satisfy only one need at a time and in a linear fashion?
When Maslow’s theory is displayed in the classic Pyramid; as we do with so many other Solution Sets in business it appears intuitively correct. I would argue that individuals are motivated by multiple needs at one time found within varied layers of the hierarchy. Empirical findings and my observations of people’s behavior over the years reinforce this perception.
We need to understand that the employee, investor or a customer can have multiple needs “Benefits” to satisfy simultaneously. Moreover if the “Benefit” is not realized the individual may regress in his or her needs to a lower level. It is then up to the entrepreneur to recognize this and address the lower level need so we can focus again on the higher levels, thereby keeping the employee; acquiring / keeping investors or winning the customers business. I believe that the Science we are discussing here is fundamental in the pursuit of excellence in business or our personal lives. But it is Art and Intuition that ultimately wins the day or the customer or…. It is worthwhile to understand which needs are the more important for individual and what drives them.
By: Joseph Simmons on December 4, 2009
at 2:40 pm
Very deep and insightful Mr Simmons
By: patrickhehir on December 4, 2009
at 2:48 pm
Mr. Simmons, I agree with your statement about features and benefits being different for each group, and possibly within each group. In your statement that Maslow’s theory may constrain us, however I present the following thought. The linear form of progression applies if you allow for the fact that there are personality traits involved. In the case of the “starving artist” the striving for the top of the pyramid, self actualization. The artist personality has relabeled the levels of need, in fact may have inverted the pyramid… I need to succeed first to be able to meet the base level of needs. I think the “Needs” definition continues to change by our environment, place and time. “Needs” as defined in 1800 are very different that the ‘Needs” of 2010. Some of the base level of needs in modern cultures have been devalued by their abundance, and replaced by the needs from higher levels of the hierachy. Looking through this lens you can see why it may appear to be multiple levels of needs operating varied layers. I submit each one of our regions and area’s of the world have different labels for the levels. When you stack them up and try to make only one pyramid it appears to be multifaced. However the operations are the same, just the labels have changed based on the world each indivuidual lives in. So what does it mean? We better find out what the labels are on the needs pyramid in our stakeholder groups, and find a way to offer each group a path to reach the self actualization by investing in, or participating in or purchasing our goods and services.
By: Royce Dugan on December 4, 2009
at 5:08 pm
Royce (Call me Joseph) you might find Frederick Herzberg’s “Work and the nature of man” (An oldie, 1960′s I think, but as has been said….. I learned all I needed to succed in life on the play ground in Kindergarten…. and Chris Alderfer’s ERG theory spells out just this. at least from the employee side of the equation.
By: Joseph Simmons on December 8, 2009
at 3:11 pm