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Business Leadership Series Part 4: Balance the Constituents

Tue, 23 Apr 2019 15:16:24 +0000 / by Raymond E. DiDonna

L3_Leadership Series_Blog4_Balance

As you reach step 4 of this business leadership series, we return to the idea that every business has several key constituents.  And, importantly, these constituents all have a different focus.

Customers: Customers care about the cost of your product and service offerings, the quality of service, and their perception of the overall value they receive. Most importantly, customer care about how you can help them succeed.

Owners: Investors, advisors, and founders care about the safety of their investment, their reputation and their ultimate return on investment.

Employees: Your team cares about having interesting work to do, development opportunities, working in a positive environment, and being recognized for their accomplishments—both monetarily and otherwise.

As you can see, each constituent wants something a little bit different. Often times, those things are at odds. The customer wants a lower price, but that would cause investors to get a lower return – the same happens when paying employees more. You can offer a great service, but it may be at the expense of working your people too hard and, as a result, you could end up with an employee retention problem and a bad reputation.

“Balancing the Constituents” is all about finding the sweet spot in the middle of the diagram below.  I’ve used this diagram in real time with new teams while running strategic planning meetings.


The three concentric circles in a Venn diagram make a triangle formation. Each constituent is represented by one of the circles. In some areas, you’re only in the customers’ circle, and may be inadvertently impacting employees and owners. Sometimes you intersect two constituents’ interests, but the ideal scenario is to hit the middle and satisfy the needs of all three.

Your job as a business leader, when you cut through all the other details, is to hit the bulls eye. You need to balance keeping customers satisfied, employees engaged, and owners happy. It is easy to talk about but, make no mistake, very hard to do.

When you hit the bulls eye, your customers appreciate the value you’re providing, you have a great company culture and produce incredible work through an engaged team, and your owners maintain a strong marketplace reputation and receive a great return on their investment.

You’ve made it this far, now you are ready to Understand the Levers. Subscribe to receive the next article in this series!

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Topics: Business Leadership Series

Raymond E. DiDonna

Written by Raymond E. DiDonna

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