When creating a long-term strategic plan in the pursuit of organizational excellence, a company should have a set of goals that optimally serve all of its stakeholder groups. The key word in that sentence is should, and the main problem many groups face is that they don’t change their inward-focused mindsets to match the outward-focused approach that must be the heart of a solid multi-year plan.
More specifically, many companies prioritize the needs and goals of one stakeholder group above all others. When that happens, it nearly always is investors who are given top priority. This is what’s known as teleopathic behavior. Teleopathy is most simply defined as the unbalanced pursuit of objectives, and the needs of others often are sacrificed during that pursuit.
It’s easy to see how this happens in a typical corporate culture. While companies develop long-term strategic plans to guide them toward a prosperous future, they frequently measure their success in short-term increments, such as quarterly or annually.
In good economic times, ink flows black as sales and profits grow, and employees are added to handle increasing demand. Suppliers are called upon to provide more goods, and the community in which a company operates often benefits as dollars course through the local economy. All stakeholders are served, and everybody should be happy.
When sales slow and hard times hit, however, companies often work to keep that quarterly report looking good for its investors to the detriment of the other stakeholders--employees, customers, suppliers and the community as a whole. To maintain shareholder value, companies might downsize their workforce and bargain more sharply with suppliers. They often cut corners on customer service and reduce their investment in the community. All of this occurs in the name of maintaining shareholder value.
The tough decisions described above may be necessary for a company to remain viable when times get tough. If revenues fall and a company starts operating at a loss, tough decisions must be made, of course. That is, even an outward-focused and excellently run company might need to make such tough short-term decisions in the context of its mission for the long term. In this case, the decision process is balanced.
Returning to the behavior of the teleopathic condition, this unbalanced pursuit can be most harmful when it exists whether the company is in good times or bad. With teleopathy, the dominant behavior is inward-focused, short term and narrowly interested only in shareholders. This is a long-term recipe for failure. Problem is, it is wide spread, and it is viral.
One of the greatest consequences of teleopathy is this: when it’s pervasive, organizational excellence is impossible to achieve. Further, this behavior is a symptom of a larger problem – a leadership culture that is indeed inward and short term-focused, which is ultimately doomed to failure.
True value will be realized if and only if goals and strategies are established to optimally serve all stakeholder groups through all economic cycles, through good times and bad. It truly takes discipline and courage. This discipline and courage are grounded in a common vision that truly inspires every employee, from the boiler room to the CEO’s office, to always serve all stakeholders.
It’s a tall order, to be sure, but it’s an achievable one for a company that has a strong, livable vision, a mission that involves all stakeholders, and a strategic plan that takes into account what’s best for all involved.