The most important person in your company by Adi Gaskell, CMI on 13-May-2011

I remember vividly a management lecture at university back in 2003. The lecturer asked the group who we felt were the most important stakeholders in any company. I was overcome with dotcom fever back in those days so confidently puffed out my chest and offered up ‘customers’ as my answer. Can’t be wrong I thought. After all, if you don’t have customers buying your products, you have nothing.

Alas I was slapped down, with the lecturer believing that shareholders were the most important people in any company. This has been the common answer in management circles for decades. Indeed a recent Australian study still placed shareholders top of the tree in terms of most important stakeholders. The reasoning goes that because shareholders provide the finance, you have to keep them happy. Indeed, the business pages of our newspapers are awash with statements by executives needing to meet quarterly earnings in order to keep their jobs.

Looking back with hindsight, however, I think we were both were wide of the mark. A recent groundswell has been led by companies such as HCL and Southwest Airlines behind the notion that the employee is in fact the most important person in any company. A happy employee will treat the customer well and this in turn will keep the finances in order and keep shareholders happy.

HCL has turned this philosophy into official policy: Employees First, Customers Second. Chief Executive, Vineet Nayar, has written about the philosophy in his book of the same name. The following video sees Nayar talk to Harvard Business School about his philosophy.

© Harvard Business Publishing

Who is most important in your company?

Adi Gaskell is the editor of The Management Blog for the Chartered Management Institute, a professional body for managers and leaders in the UK: The CMI Management Blog

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