The Four Pillars of Business Success

This newsletter aims to support HR professionals who want to contribute to business success and organizational leaders who seek to enhance management effectiveness by sharing my experiences.

This time, I would like to write about business success. If you have been reading my newsletter, you may have noticed that I often use the term "business success." What I mean by this term is largely inspired by the concept of "Human Capability" proposed by Dave Ulrich . Engaging with this idea has helped me consolidate and simplify my previously vague understanding.

In this article, I will organize my thoughts on business success in corporations through four perspectives: "Success of Shareholders," "Success of Customers," "Success of Employees," and "Success of Society." These four elements are deeply interconnected, forming a positive cycle that reinforces and sustains long-term business success.

Success of Shareholders

For corporations, shareholders are the owners of the company and important stakeholders. Meeting their expectations is crucial from the perspective of business success. While shareholders' expectations vary, stock price appreciation and dividend growth are particularly significant factors.

Increasing stock prices and dividends presupposes an increase in revenue and profit. Additionally, shareholders may be drawn to and support the company because they resonate with its reason to exist including purpose or mission. Therefore, for a corporation, having a compelling reason to exist (including purpose or mission) and long-term goals (including vision) is essential to attract shareholders.

On the other hand, a company must be a viable business to continue its existence, which requires a solid business model. Since revenue and profit are necessary for survival, consistently achieving promised financial results is vital for shareholder success.

To realize shareholder success, management must establish a robust business plan, possess the execution capability to implement it, and continuously achieve the promised revenue and profit. It is also important for shareholders to have transparent access to relevant information. When shareholders understand the company’s growth strategy and risk management and see that promised results are consistently delivered, they gain trust in the company.

Success of Customers

Achieving continued revenue and profit growth, which is necessary for shareholder success, depends on consistently satisfying customers by providing products, services, and customer experiences that they are willing to pay for. Satisfied customers tend to make repeat purchases and recommend the company to others, creating a phenomenon where customers generate new customers. This leads to both repeat purchases and an increase in new customers.

Acquiring new customers is costly, but increasing repeat purchases and referrals reduces customer acquisition costs. This allows companies to grow revenue and expand profit more efficiently. Additionally, improved customer satisfaction enhances brand reputation and trust, contributing to long-term business success.

Companies should earnestly listen to customer needs and feedback to improve their products and services. Prioritizing communication with customers and proactively engaging with them allows companies to address even their latent needs, strengthening customer trust. As a result, customer satisfaction improves, leading to higher retention and referral rates.

Success of Employees

The ones who create products, services, and customer experiences that satisfy customers are the employees of the company. For employees to achieve this, engagement is essential. Highly engaged employees actively contribute and strive to deliver outstanding results.

For example, when employees commit to organizational expectations, they can fulfill their personal values and move closer to their career aspirations. Regular reflection and conversations with supervisors help reinforce this connection. Additionally, designing and operating HR systems with consistency is necessary. Clearly defining what can be done at the company, team, and individual levels and taking appropriate action is crucial.

Enhancing employee engagement also requires fostering a strong corporate culture and improving leadership quality. Companies must provide an environment where employees can experience personal growth and career development. Respecting and incorporating employees’ opinions and ideas further boosts motivation. Engaged employees contribute not only to customer satisfaction and business performance but also to the overall vitality of the organization.

I have previously written about these aspects in past articles, so please refer to them if interested. Many of you may already be working on these initiatives.

Success of Society

When employees work with high engagement, customers remain satisfied with the products, services, and experiences provided, leading to increased revenue and profit. As stock prices rise and dividends grow, shareholders remain satisfied, and society recognizes the company as a reputable organization. A strong corporate reputation enhances employees’ pride and engagement, creating a positive cycle.

Additionally, as a company gains a good reputation in society, it attracts talent who align well with its values. These employees work with high engagement, perpetuating the positive cycle.

When a company improves its business performance, it also increases its tax contributions. These taxes are then reinvested into society, contributing to a better social environment. If employees can see that their work directly contributes to society, their engagement will further increase.

Highly engaged employees create better products, services, and customer experiences, helping solve more customer challenges. Solving more customer challenges contributes to addressing broader social issues. Moreover, increased stock prices and dividends may be reinvested into other societal challenges. Additionally, tax revenues generated from a company’s improved financial performance may be used to tackle social problems. In this way, a company’s activities serve as a starting point for building a better society. Companies that earn society’s trust can establish a strong foundation for long-term business success.

Conclusion

In this article, I have discussed business success in corporations from the perspectives of shareholder success, customer success, employee success, and societal success. These elements are interconnected, forming a positive cycle where one success triggers another. Recognizing this dynamic relationship and intentionally strengthening each element can lead to sustainable growth and development for companies.

As you reflect on your own organization, which of these four aspects do you think needs more focus?

Thank you for reading to the end. I hope this article serves as a valuable reference for many readers.

If you would like to read past issues, please check them out here.

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How do you define business success?