Blog: What is ‘shareholder value’?

I was at a lunch last week discussing the latest thinking in sales performance and hearing that, since the global financial crisis new approaches are needed to selling, and that ‘consultative’ selling is a very effective approach. Consultative selling was defined as “selling to maximise shareholder value”, a great approach as it focuses on how to provide the best client value, not how to sell the most stuff!

But what is ‘shareholder value’? The discussion went along the lines of “profit, of course – all organisations just want to maximise profit”. And here I had to disagree – in fact successful, sustainable organisations seek to maximise all dimensions of ‘value’ – I.e. Everything they care about, not just profit. This often means things like minimising environmental impact, corporate social responsibility, customer experience, staff engagement. And organisations which have their attention on all these things will also deliver on their financial performance!