Give the Client What They Want, Success Will Follow
At M Squared Consulting we are 100% focused on helping our clients succeed. With 21 years of dedicated client service under our belts, we’ve learned that in serving our clients best interests, we also help ours. The reward for this dedication has been a high rate of returning clients for additional engagements.
The wisdom of our strategy was recently affirmed by none other than Jack Welch, the former CEO of General Electric. Welch, who is widely regarded as the father of the “shareholder value” movement that has dominated corporate America for nearly two decades, made some strong statements about the negative impacts of focusing so heavily on quarterly profits and share price gains.
In an interview with the Financial Times, Welch said “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy…Your main constituencies are your employees, your customers and your products…”
What he’s talking about is the commonly held belief that the purpose of business is to increase shareholder value. That belief is variously attributed to Milton Friedman, Adam Smith, and perhaps common sense.
It was the operating principle that resulted in two market busts and innumerous scandals in the past 10 years. The fact that Welch was one of the main proponents certainly adds a fair amount of gravitas to his comments.
Profitability, shareholder value, and measures like economic value added (EVA) completely miss a point that Welch now articulates so well. Namely, increased “shareholder value” is a result, not a strategy.
In other words: by taking care of clients, the bottom line will take care of itself. This is certainly a strategy that we at M Squared Consulting intend to continue following as we deploy our unique and powerful talent-on-demand model to help our clients solve their business challenges.
