Three legged stools

A well run company is like a three-legged stool.

One leg represents capital. Without money a business can't survive. Capital can be provided by stockholders but a stool can't survive on that alone. Something needs to be done with the capital to make it viable.

The second leg is clients, who also provide capital. If the clients are not treated well they will go to a competive stool that has equal or better quality legs at prices the second leg deems reasonable. 

The third leg is employees. They do the work that produces the product or service that the clients buy. These employees sell their time, skills and energy to the stool. Ideally, the better they work, they will receive the rewards in money and benefits where they will be motivated to do the work the best way possible. 

It's costly (reduces capital) to replace a well-trained, well-motivated employee and it is wise to do everything possible that the employee does not take its time, skills and energy to a competitor.

A stool that is strong enough to be used to sit on, stand on, needs all the three legs: capital, clients and employees. To ignore two for the third means the stool is handicapped.

I think of the story of Market Basket, a New England chain of groceries considered by Consumer Reports as the second best supermarket in the U.S.

After years of infighting, Arthur T. Demoulas took over as head. The stores had the support of 5000 employees who backed him. The store is a good three legged stool. Prices are lower than the competition, money is being made for investors and employees are well paid with good benefits. 

A recent observation was that another supermarket, with the more traditional approach where everything went to the top, was next door.  Their parking lot was empty. Market Basket's was full.

Market Basket is a three-legged stool. I wish there were more of them under the capitalism system. We'd all be better off.