The Value Profit Chain

For many years in the private sector, shareholders were the only stakeholders that mattered. In the public sector there was no consistent strategy that focused organisations on the needs of any specific stakeholder group. Gradually, over the last two decades in the UK, companies have focused increasingly on customers because they have begun to understand that satisfying customers is the best way, in the long run, to achieve the results desired by shareholders. This process is still far from complete, especially the ‘long run’ bit. Too many companies are still prepared to sacrifice results to customers by cutting costs in order to deliver short term results to shareholders. Although public sector organisations took longer to cotton on to the idea that they had ‘customers’, the Best Value philosophy now adopted by most of them provides clearer focus than the changeable strategies of many private sector companies.