Should Companies Focus on Investors, Customers or Workers?

Which should companies focus on first — investors, customers or workers? This is a question we have asked and answered so many times, you would think the answer would be obvious. However, we always see companies either doing well or struggling because they just don’t get it. A look at a few of today’s winners and losers may reveal why this is so.

Sometimes a company has good results for several years, and its leaders think they are on the right path. Then they stumble. The problem was always there, but they didn’t see it. When it hit them in the face, it was too late. When companies start to slide, they usually continue to collapse over the next several years until, if they finally figure it out, they make changes and start a long-term recovery. Here are a few examples.

Sprint’s Story

Sprint is a company that was a strong No. 3 in the wireless space until a handful of years ago, when it started to collapse. Its focus changed. It was not on workers or customers anymore — it was on investors. That worked for a while.

Sprint had numerous challenges, including that it was only a wireless company. It did not have a wireline business like AT&T and Verizon did.

Sprint tried to improve its stock price by doing deals with the cable television industry, which fell apart after a short test run. Then it tried once again to offer a 4G experience on its own, and that sent the stock into a free fall. After changing CEOs twice and working at it for several years, Sprint finally has pulled up from the free fall. It is no longer crashing. It has started its upward climb.

It still has a long way to go, and it is a bumpy ride, but the company is finally headed in the right direction. This process has taken several years and has given Sprint two black eyes that it will have to live with for a while.

Sprint focused on improving the customer experience and its employee relationships. It got a great rating from a consumer report recently — a complete turnaround. Hopefully it will do its best to keep customers and workers happy, going forward. This repair is still in progress; however, as it continues, the company can perform well — and that should keep investors happy.

AT&T’s Blinders

AT&T is another interesting case study. It seems to be growing strong and doing well. That is the good part. The bad part is it has many unhappy workers and customers, and I think that is a sign of trouble brewing. It doesn’t yet seem to care, because its leaders don’t see the longer-term risk to the business.

In October I wrote a column, “Solving AT&T’s Ballooning Problem”, that seemed to strike a chord with many workers and customers. I got emails with so many more stories to write about that I could write a book. If AT&T does not change on its own, I have a feeling this will bubble up and become a problem for the company in the next few years — not unlike Sprint’s story.

AT&T is currently focusing on the investor. The customers and the workers are out in the cold. The comments that have been shared with me regarding AT&T’s relationships with these groups are disturbing. One example is workers being told they get paid enough to work extra hours — so either work or quit.

Another challenge is gelling different company cultures. Remember, the AT&T we see today is a brand new company. A few short years ago, this big company was really four smaller companies: SBC, AT&T, Bellsouth and Cingular. SBC started the big wave of mergers, and they all got together.

Each company had a different culture. Now they have one, and it is not pretty trying to squeeze it all together. This means many feel uncomfortable. That is natural after a merger. However, the company has a choice about what comes next. It can tell the workers to buck up or get out — or it can recognize the problem and work to soften the sharp edges, to make it easier for everyone to fit in. So far, I hear the company is taking the wrong path. I would love to hear the other side too, but I have not.

Many customers have the same complaint. They say they no longer feel a connection to a caring company. Basically, customers who don’t need any extra help are fine, but those who do require some attention feel like the company no longer cares for them. In fact, they feel like they are in the way. Solid relationships are starting to get shaky. Is that the way you want a customer to feel?

So far, the company is still doing strong business. However, I worry that at some point in the near future, the earth may start to crumble beneath AT&T’s feet — like it did at Sprint — and enough damage will be done that it will have to just go down for a ride and fix the company afterward. I hope it doesn’t get to this point. Their future is in its leadership’s hands.

What’s Working, What’s Not

Verizon may be on the right path. There are several issues, but the company seems to care for its customers and workers, and that ethic has served it well. Because customers and workers are generally happy, the company is performing well — and investors are rewarded.

Qwest is a very small baby bell and it has been through the wringer in the last decade. Customers are not generally happy, because they feel like they are left behind the rest of the country. Qwest doesn’t have a big wireless or television footprint, so while traditional telephone is shrinking, Qwest is not growing in other areas to make up the difference. In this case, all three groups are suffering. So customers, workers and investors are struggling.

CenturyLink already acquired Embarq and is in the process of acquiring Qwest. Windstream is a similar company. Both of these are growing through acquisitions. They look good right now. The question is, what happens when the acquisitions end? Where will growth come from? They are currently focused more on the investor side, and that is a concern. So far, they still look good, but the next few years will be interesting to watch as they and the industry completely change. Are they up to the challenge?

Apple does a remarkable job of focusing on the customer and the worker, and that has kept the investor very happy. Walk into any Apple store, and you will find many happy and dedicated workers. You will also find the store packed with customers who are happy. Apple has its own problems, but its way of doing things keeps sales high and investors happy.

Google keeps wowing the marketplace. Its workers and customers seem to love the company — and because of that, the investors laugh all the way to the bank. So far, so good.

Motorola was a company that led the wireless handset business until the mid 1990s. That’s when the networks switched from analog to digital, and Motorola didn’t have handsets yet. Nokia did. It took the lead and has kept it ever since.

Now, a decade later, Motorola seems to be coming back — partnering with Google and delivering cool new Android handsets. Customers love this. The workers are treated well. Now, finally, the investor is responding and winning with them again.

Nokia may be starting down the same path Motorola was on during the last decade unless it can update its brand and keep customers happy and interested. It has a good reputation, but it is not updated with the industry.

Handset makers like Samsung, LG, HTC and Ericsson, and equipment makers like Nortel, Alcatel-Lucent and Cisco have similar opportunities and challenges in these areas. Who will do well, and who will struggle?

Season of Extremes

This is a teachable moment. Company after company is either doing strong business or struggling. Very few are in between. The reasons are obvious, but it is amazing to me how so few pay attention to the reasons.

You have to focus on the worker and the customer, and keep them happy. If you can have a strong business, then you will have a happy investor. If, however, you focus on the investor and let your workers and customer suffer, you will pay the price. It may take a while — but when it hits, it will knock you for a loop for several years. Is that what you really want to struggle with?

The choice is clear. Focus on the customer and the worker, and you win. Focus on the investor, and you eventually lose. It’s a simple equation. There are many issues, but this is a key one to get right. I only wish every company understood this.

I am thinking about writing a book on this very topic, and it is turning out to be very interesting. Drop me an email with your thoughts on what your company is doing right and wrong.