How do you value your company?
There are many ways to quantify the value of your company, like profit margin, amount of venture capital investment, or market capitalization. These are all common valuations, and, unless your only requirement for your company is to be a cash register for you and your investors, they’re all flawed. Why? If you place the bottom line of returns above your products, your clients and your employees, then your company will be a hollow shell of its true potential.
If Steve Jobs (I know, I know…but I don’t bring him up all that much) came back to Apple with the sole vision of churning out anything possible to increase the bottom line, today Apple would have had a diversionary focus, pushing out a diluted product line of dubious quality. Given, he was tasked with making Apple more profitable, but he turned the focus back to the company’s roots: to create a limited line of very focused, highly-designed, high-quality products. The Cult of Apple was all him: they hired a team of highly-qualified and motivated employees to create products that consumers love—that they, in fact, covet with a particular rabidity given to few companies. In turn, the value of Apple has increased at an exponential rate in the past decade.
One of the most frustrating aspects of working for the internet startup was that even though most of my team knew better, we were pushed to create a compromised product and unable to fix the glaring inconsistencies and errors that had been built into the product since launch. Day in and day out, we did our best to polish a flawed product because the executive focus was on the bottom line. More specifically, the focus was on their bottom line with highly inflated salaries and cheerful presentations to the board. The net effect of their decisions to stick with only choices that generated more cash for themselves was a failed product maintained by underpaid, unmotivated employees, and a disillusioned client base that heading for the exits in droves. This was not creating value for the company, rather, it was creating wealth for a select few at the expense of many, while decreasing the value of the company on a daily basis.
While it’s true that very few companies will ever see the overwhelming success of Apple, any company can follow their lead. Stop thinking about the company’s bottom line—or your bottom line—as how you determine its value and instead think about making your products or services the best they can be. Continually improve those products and services. Listen to your clients and put that feedback above your own self-interests. Hire great people, pay them what they require, let them do their jobs and, above all: listen to them. Do these things and there will be no limit to the value of your company.
