In chess as in war, there is a clearly identifiable king. We know who has the power and who we have to protect until the end. The king is the most important figure and is decisive for the end game result. If knowing who the king in chess is can help us prioritise our moves, knowing who the king in business is can guide us in our decisions.
Business is undoubtedly more complicated than chess. There are far more people and factors involved than the 16 pieces each player has on the chess board. This complexity also contributes to the difficulty of decision-making in business. Surely, there are lots of considerations to take into account. We need, however, a guideline for most business decisions. Who is the king that will in the end count?
At first, the CEO of a company seems to be the king. He/she has great power and is on the top of any type of any organisational hierarchy. He/she defines vision, mission and gives orders to the subordinates. However, if the CEO were the king, it would mean that the he/she is irreplaceable. History has shown us the opposite. In reality, a business can continue to exist even if the CEO is changed. For example, Apple Inc. continued to exist even after firing Steve Jobs.
If you have studied business, you might already be yelling that shareholders are the king. They can decide on major corporate issues, many of which are beyond the functions of the CEO. In textbooks we are also constantly told that the purpose of financial management is to maximise shareholder value. Saying that shareholders are the king is certainly a better response than the previous option. However, shareholders of a company can change; there are M&A transactions, corporate successions. A business can outlive the existence of shareholders and is independent of who is the current owner/shareholder.
Customers are another ideal candidate for king. Marketo says that the phrase “customers are king” is more true than ever. Customers are certainly essential to a business as they buy our products and services. This answer is perhaps be as good as, if not slightly better than saying shareholders. Through customers, we can realise the value of the business. However, having customers does not guarantee the survival of the company if other decisions are being made erroneously.
Another candidate, quite closely related to the CEO, are employees. Good employees make a good company. Great employees make a great company. If it weren’t for them, we would hardly drive any customers to us. If there were no employees, there would hardly be a business and we would hardly be able to respond to customer demand. Yet employees can leave companies and basing decisions on them would be rather narrow-focused. Can we guarantee that having satisfied employees is equal to business survival?
The previously named candidates were all people. Businesses are formed by people, but at the same time go beyond them. A company has a spirit of its own and can outlive the people in it. So, if there is no single person or group of people who can be appropriately designated the king, is there any at all?
I am currently working at an IT company (Clueda AG) with talented engineers and I have to mention that when your background is engineering and you are really into programming and systems, you might easily equal business to technology. That is in the end your passion and the essence of what you are doing day in and day out. However, there are also companies without great amounts of technology that are thriving in the world, e.g. service companies, consulting firms; and there are companies with great technology that are struggling. What is essential for every business is not so much technology, but rather cash.
Cash is the king in business independent of who is providing it. If you have cash, you can survive. Cash to business is as king to chess; as long as it is not attacked, you have hope and you have chances. All the candidates we named above are of utmost importance. We should definitely take care of the CEO, shareholders, customers and employees. They indeed lay down our playing ground, making it to our advantage or to our disadvantage. However when facing a hard scenario, it is cash, no matter from shareholders, customers, investors or debtors, that gives us the opportunity to survive. You can use the cash for operations and turnaround the business and/or deploy cash for business expansion.
Markets and economies are changing rapidly. It might well be that one day everyone will be working for you and providing you services for free or giving you products on credit for the long term. But until that day, cash is the king.
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