Put the customer before the cash

Two decades ago when I was an executive at Associated Newspapers, the company decided to bring in an incentive bonus scheme for its senior management - but only after a long period of resistance by the chairman and major shareholder Lord Rothermere, father of the current incumbent.

Anthony Hilton: 'Management should not expect employees to care about quality when those on top make it clear the numbers matter more.'
Anthony Hilton: 'Management should not expect employees to care about quality when those on top make it clear the numbers matter more.'

His concern was that his business could be destroyed if its management was incentivised to focus on profit. What mattered to him was market share, because that told him customers were happy with the product, which in turn implied the business was running along the right lines and had a future.

Growing market share, defined in this case as higher circulation and readership, was the responsibility of the creative employees in the business. It was management's job to make financial sense out of what they created.

I was reminded of this last week when Serco joined the ranks of companies in deep trouble, when it was accused by the Government for the second time in three months of failings in the way it was carrying out its outsourced contracts - in this case prisoner escort duties.

The shares plummeted - prompting comment that this was a PR disaster. Arguably, however, worrying too much about its share price in the first place was the real PR disaster, because it is that sort of focus that leads to profit becoming more important than performance.

The only enduring hope for a business is if it makes the customer the focus of everything. The fixation with financial performance - usually encouraged by the financial PR industry - too often leads the business directly in the wrong direction.

The message chief executives too easily forget is that driving too hard for financial success can create pressures that have serious consequences. Management should not expect employees to care about quality when those on top make it clear the numbers matter more.

We do not have a business press in this country; we have a financial press obsessed with the stock market and financial results. If we had a business press that wrote about what really makes business tick, it would probably also help lead us to a much healthier economy.

Anthony Hilton is City commentator on London's Evening Standard

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