Abhinav’s Blog

There is a debate raging elsewhere on whether employees are most valuable for firms, or customers. I have not gone through the entire discussion, but most entries seemed to be for either one of the two.

My take on this would be - neither. In The Goal, Professor Goldratt has mentioned that the primary goal of an organization is to earn money. This would make the most important stakeholder, for any firm, to be its promoters and shareholders.

Most people might not be as blunt as Professor Goldratt, but the machinations of any organisation do, on close scrutiny, affirm this belief. During a recession, for example, what would a company considering employees or customers most valuable do ?

• The Pro-Employee camp would probably believe in making sure that the employees are not “inconvenienced” - no layoffs, minimal pay cuts, business as usual - after all, aren’t the employees their most prized asset?
• The pro-customer camp, on the other hand, would make sure that the customers continue getting value-added products, and services. If the customers cannot pay for these? Reduce prices ? Give it away for free ? Anything to keep the customers, no matter what happens to the balance sheet ?

A more pragmatic approach would be to make sure that the financial health of the organization is not harmed to the best possible extent. This might mean pay cuts, products not being agressively marketed or even rolled out, customers being politely refused - but in the end, the firm would live to see another day.

This is not to say that the first two groups are not valuable or that they are unnecessary. Both are equally important for the long term success of any organization, and every organization should - especially in the current global environment - provide the best of facilities and opportunies to both the employees and customers. It is just that playing a game of “Which is more important” is futile.

Thoughts ?