Awkward Reality #9

“Maximize shareholder value” is the pledge of allegiance recited in board rooms. It is a poor goal.

9-Business-Pledge

This mantra guides the decisions of the business masses. But is it right? Peter Drucker didn’t think so. He said the primary purpose of a business is to acquire and keep customers. I believe increased shareholder value is a good result, but a lousy goal. You’ll have better results if your goal becomes: “Understand and meet the needs of our customers.”

More in newsletter, Why Maximizing Shareholder Value is a Flawed Goal (Jan-Feb, 2012)

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