Serving the "Customer Stakeholder"

by Graham Denton

In order to secure long-term market advantages, companies, today more than ever, are trying not just for dollars but for goodwill. Sometimes that means they are outbidding each other to be good. Customer stakeholder companies may thus be the cutting edge of a trend.

In his stimulating assessment of the "next economy," Paul Hawken discusses that trend. As our economy shifts from a mass-intensive to an information-intensive one, Hawken says, companies that do well in the market will share a peculiarly "unmercenary" corporate culture. Whether these successful firms make databases or machinery or fast food, their managers will operate on three basic assumptions:

• First, they will assume that people are "intelligent and are becoming more so. Companies that try to fool their customers or manipulate their employees will find themselves, sooner or later, competitively threatened by a company that does no such thing."
  
  
• Second, those who prosper "will treat their customers and clients as they would themselves." Hawken is speaking here of the importance of service and of enhancing "human contact and social conviviality." But his statement could hardly be a more clear-cut evocation of the Golden Rule.
  
  
• Finally, the successful firms in the information economy "will no longer make a distinction between how they act in the world and how they want to see the world act." Again the Golden Rule, and again the implication that receiving a "high component of informativeness" -- service, quality, responsiveness -- is a direct result of giving it.

If Hawken is right, and the economy is undergoing a fundamental transformation from a mass base to an information base, then the importance that customer stakeholder companies have traditionally placed on meeting the real needs of their buyers is likely, in the not too distant future, to become an essential characteristic of all companies. Leaving your customers "surly but not rebellious" may have been a viable operating strategy in the days of caveat emptor, when consumers were more likely to shrug their shoulders in resignation if a company overpromised or underfulfilled. The combination of a tightening economy and a decade of consumer activism, however, has made those who buy products and services far smarter than they used to be. They know now when they are being taken advantage of -- and they have options to correct it.

One social consequence of the information explosion, then, has been to alter the ground rules under which goods are distributed and consumed. The ethical implications, at least for businesses with a high social profile and an expectation of long-term business, can be startling. Today customers, no less than employees, recognize their right to demand fair treatment. In the near future, firms with little official commitment to fair dealing may be following the lead of customer-stakeholder firms, if not because they want to, then because they must.

From Tad Tuleja, Beyond the Bottom Line: How Business Leaders Are Turning Principles Into Profits (New York: Penguin Books, 1987), 91-92.