Stakeholders and Priorities

Stakeholders and Priorities
May 19, 2021 admin
In Podcasts
Competing Shareholder Priorities

The stakeholders in business aren’t just in boardrooms or corner offices, they are in every room in your business and well beyond the walls. Who are these people, should any one stakeholder come first? Ray Zinn answer that complicated question in this latest edition of the Tough Things First podcast.


Rob Artigo: I’m Rob Artigo. I’m your guest host for this edition of the Tough Things First Podcast. Hi Ray. It’s good to be back with you.

Ray Zinn: Hey, it’s so good to have you, Rob. It’s always fun to be with you and having these interesting topics.

Rob Artigo: Well, I caught a part of a Forbes article the other day that posed the question, “Who comes first, your team members, your customers, or your stakeholders?” So let’s define each one of them briefly if we can here for this podcast and try to answer the question “Which comes first?”

So team members obviously are employees, but would you expand the term team members to include people who are not employees, like contractors and other people?

Ray Zinn: They could be, certainly. A team member could be a vendor, a supplier. And so you got to look at it… In fact, a customer could be a team member, or even a shareholder, or a member of the board. So a team is really what it takes to accomplish a task. That’s whether it be basketball, football, baseball, or whatever kind of team you’re setting up, they are a group of people that work together to accomplish a common task.

Rob Artigo: This might be a thing where we have team members and customers and stakeholders in general, sort of overlapping in some situations. Now let’s talk about customers real quick, define that. Are there different levels of customers? And are those customers always the ones directly buying from you, or does that include people who are indirect buyers like the customers of customers?

Ray Zinn: Well, it could be the customer of customers, depending upon how many tiers you have in your distribution chain, or whether you’re a service company, like if you’re a hairdresser or you have a beauty salon or a restaurant. It depends upon what kind of business you’re running, would define who your customers are. The customers or whoever is in that chain… For example, I refer to some of my employees as customers. And so, I know that one of my marketing people who has to work with the product groups, they refer to them as their customers. A customer is anybody who’s receiving your service. That’s basically what a customer is.

Rob Artigo: All right. So let’s talk about stakeholders. And I think that, again, this is another one of those terms. It could cross the customer and a team member boundaries. The stakeholders, how would you define a “stakeholder”?

Ray Zinn: Somebody who has a stake in the company. For example, an employee could be a stakeholder because maybe they own stock, or maybe they’re just putting all that time and effort into it. They’re putting a lot of blood, sweat, and tears. They become a stakeholder.

A customer could be a stakeholder because they’ve got either some commitment, loyalty, maybe they’ve got your product designed into their product. And so, they become a stakeholder. And so, a stakeholder is really anyone who has a vested interest in the company.

Rob Artigo: Okay. So then, going back to the original question from this Forbes article, which was, “Which comes first, team members, customers, or stakeholders?” In the way that we’ve defined these here, and this is what caught my attention, and you clearly pointed out here in your definitions of each one of these categories is, you cannot really answer the question of which comes first, when you’re talking about a group of people who essentially cross over, depending on the circumstances. And would you be able to, and I’ll just pose the question to you, can you answer that question? Which comes first, the team member, the customer, or the stakeholders?

Ray Zinn: I know the trap you are getting me into on this. So I was ready for it. They’re really partners. Okay. So if you look at those team members, the customers and the stakeholders, they’re all partners. They’re partners in your venture. And if you look at them that way, then you’re not trying to differentiate, “Okay, well, you’re just a team, you’re an employee, or you’re a contractor, or you’re a customer, or you’re a shareholder, or you’re a board member.”

We’re all partners in the success of the venture. And so that’s how it should be looked at as opposed to, “who comes first?” Back to the chicken or the egg thing, who comes first? Because without your customers, your team members, aren’t going to have anything to do. And without your stakeholders, they’re not going to be supporting the company. So you get back to this chicken and egg thing about who is the most important. And if you look at them as they’re all important equally, then I think you’ll have a better chance of treating them all equally, successfully.

I’ve heard people within my company actually say, “Oh, employees come first because without the employees, then you don’t have the products, you don’t have that quality, that reliability, and so, the employees come first. A happy employee means you’ll have a happy customer, and you’ll have a happy shareholder or stakeholder.” But I like to think of them all as kind of being a triangle. They’re all equally… A triangle where they’re all equally-sided.

And so you’re not trying to partition out in saying, “Oh, the customer is more important” or I’ve heard them say, “customers are number one.” Well, they’re number one in some respects. And your shareholders are number one in some respects, and of course, your employees are number one in some respects. So they’re all equally important, like an isosceles triangle. And so, if you start trying to differentiate and separate them, then you’re going to bifurcate that triangle, and it won’t be a triangle anymore. It’ll be this mess.

Rob Artigo: And that’s a well-rounded way of looking at everybody. A well-rounded way, we’re talking about a triangle here. It’s a kind of a mixed metaphor I think I just walked into. But it is a symbiotic relationship in the sense that you have these different categories, but like you said, they’re all equally important. When you’re dealing with them as a leader of a company, each one of these different categories, tell us a little bit about your approach to making sure that they understand that they are important.

I’ve heard this saying, and you’ve probably heard before, “the customer is always right.” And you treat the customer in a certain way to at least let them think that they’re always right. But you know that when you’re dealing with people, particularly when it comes to technology, the customer doesn’t necessarily know what it is that you’re doing and your business in the integrated circuits. Silicon chips are so complex that if somebody can say, “hey, look, I need something to do this”, you can understand what they want, but they can’t tell you how to get it done when they have no idea how a Silicon chip works.

Ray Zinn: Well, if look at the word employed, E-M-P-L-O-Y-E-D, employed means to be engaged. And so if you look at it in that respect, your customers are engaged, your shareholders are engaged, your employees are engaged. And so they’re all employed in the endeavor of that company. It’s just a matter of who’s focused on what. Your sales department’s going to be more focused on the customer. Your human resources department is going to be more focused on the employees. Your shareholders are going to be more focused on the CEO and the CFO of the company, and vice versa, because they’re the ones that are in contact with the various organizations. And so, I just tell my people that you have to look at every person as important, and not that one’s more important than another. And so, that’s the way I’ve treated this problem of “Which comes first, the employee, the customer, or the stakeholder?” Because in many respects, we’re all basically the same. And because we’re all employed in the success of the company.

Rob Artigo: Well, like I said, the term, “the customer’s always right” gets bantered around a lot. The team members do want to feel like they’re important. The team members, the employees, let’s say employees. Employees do want to feel like they’re important because you want them to stick around. You want the customers to stick around. I guess the stakeholders, depending on how intertwined they are with the organization, that you would want many of those to stick around, and maybe some of them you’d probably prefer if they didn’t stick around. But you have to address each one of them. That’s what I hear you saying, address each group, according to what their focus is.

Ray Zinn: I think that in the article, the Forbes article, I think they chose the word stakeholder specifically, as opposed to shareholder. So a stakeholder could be a customer, or an employee, as opposed to being a… The shareholder would not necessarily be a customer or an employee. And so, they were very careful in choosing that word “stakeholder”. Because a stakeholder could be a shareholder, but it could also be a customer, also could be an employee. So because they all have a stake in the success of the company.

Rob Artigo: It’s been great talking to you again, Ray.

You can reach out to Ray Zinn with your questions at toughthingfirst.com. Really, send your questions in. Ray reads them. He will answer those questions. So you’ll also find more podcasts there, blogs and links to information about the books, Tough Things First, and the Zen of Zinn. Also, please go to your favorite podcast source. It’s probably the one you’re listening to now. Give your rating to help us spread the word about Tough Things First, The Podcast. It’s one of the top rated podcasts in all of Silicon Valley. And if you’re listening to it, you know it. So we look forward to having you back to listen to another edition of Tough Things First.

Thanks again, Ray.

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