I have used the last eight editions of the infinite stake theory to define and lay the foundation on how visionary organisations and societies can be built. Having leaders with infinite mindset is a sine qua non to building sustaining businesses or societies. The story of Singapore, Rwanda, and many other transformed third-world countries are told because of the leaders’ infiniteness.
A vital element of the infinite stake theory aside the shareholders and employees are the customers’ groups. They are the core of the business continuity, and without satisfying your customers, your business is not a going concern. In not too long a distance, customers can swiftly migrate to new entrants and existing competitors. If companies want to have and maintain loyal customers, customers also want to avoid switching costs. They want to be proud of their products or service providers as much as possible without losing value from every naira spent.
I read an advertorial, which eulogises the importance of customers to the business in a foreign newspaper. Tesco Mobile advert read thus: ‘Sorry. The other mobile networks really should be. For years they’ve hiked up your bills mid-contact. It’s how they’ve made nearly £1bn extra from customers since 2013. This spring, when people have enough to worry about, most are introducing big increases once again. We’d like to apologise on their behalf. Yes, we’re a mobile provider, but not that kind. In fact, we’ve never increased customers’ price mid-contract, and we’re not starting that now. If you’d like prices to stay frozen for your whole contract, come and say hello’.
The above advert might appear competitive. However, if Tesco had never increased customers’ tariff upward mid-contract, had the flexibility to freeze price and spent to make the adverts in numerous newspapers, the culture of putting the customer first and developing infinite relationship is apparent. Howbeit, some factors will impede any intention to treat the customers fairly, provide unmatched service experience, see future value in customers’ relationship and ultimately build a company to last. Wherever the critical infinite customer-centric factors are absent, the slogan’ customer is the key’, we put our customer first, and many others are but a delusion. A business ideology that fails to strike commensurate balances in shareholders, employees, customers, and society’s interest is a business built to lose. Infinity stake thinking and leadership style creates businesses that last and outlived their owners from generation to generation.
An excellent example of a retail company that exhibits an infinity mindset and leadership in its stakeholders’ management is Costco. Costco ticked the pass box in shareholders’ satisfaction, employee engagement, customer loyalty and other indicators. It is a company built to last under Jim Sinegal’s philosophy, the founder and solidified by Craig Jelinek, the current CEO. Costco market capitalisation is not in a trillion, but its $120billion net worth is incomparable to the company’s infinite value. To get the company’s infinity value, the ratio of employee and customer’s loyalty is vital and essential to the worth of the financial shareholders.
How do we build a company with infinite life? What is the key driver to achieving business infiniteness?
The first requirement is to have founders or major shareholders who are not focused on increasing their wealth at all cost. Wherever there is value, there will be an increase in wealth. Infinite minded leaders focused on creating value for others. The more the key decision-makers focus on personal benefits, including an appearance on Forbes’s list, making sensational news headlines or making management bonus year on year, the less ethical the company will be. Infinite minded leaders focus on a key objective that will outlive them. The infinite purpose is what Simon Sinek called ‘Just Cause’. A company might focus on a quality product above profit margin and generate higher profits from the vast quantity and expansive patronage.
The second must-have is corporate governance and fair treatment of all the stakeholders irrespective of their level of interest and power. Unethical practices are products of failed corporate governance. Where rules are not bent and loopholes in the pricing regime are not explored; the customers will receive value for money and become lifetime believer in the company and its products. A generation of the customer with little margin per product is better than a one-off big-ticket transaction without the hope of repeated patronage. I once wrote an article titled the future is retail to portray how customers with little margin contributions but in the mass market segments can be treated and mined to produce profit-margin momentum for infinite patronages.
A fallout of excellent corporate governance is a realistic expectation from the management. The economy might be contrasting, yet we want increasing profit margin instead of developing new frontiers. To complement the existing products. The pressure executives placed on staff to earn bonuses at the end of the year accounted for Wells Fargo’s scandals and in the near-collapse of General Electric and Enron’s collapse. A more realistic approach to business outcome is visible only if the executive or owner greediness is reduced. Such can only be achieved by focusing on a ‘Just Cause’. A ‘Just Cause’ beyond financial reward will produce rewards in its billion-fold over generations in the long run.
Finally, the essential factor in building to last is the treatment and engagement of the goose that lays the golden eggs. Nemo dat quod non-habet – “no one gives what they do not have.” Engaged and satisfied employees will produce loyal and infinite customers. With infinitely loyal customers, future existence is guaranteed. Who will innovate for customers to benefits from? Who engage your customers daily? Who is the first port of call for patronages? Directors? No. Employees. If they are in huge numbers, think of their cumulative negative or positive effects on your brand and future.
If you want future profits and your brand’s infinity existence, put your customers first continually. Howbeit, the bedrock for creating a business that is infinite is making your employees feel valued and part of the wealth they are creating.
