If one is going to be involved in managing a business then one must take what I call the Triangle into account at all times. The Triangle is shorthand for the three crucial constituencies whose interests we must look after in order for our business to be successful: customers, employees and shareholders. As an aside, I’ll note that sometimes people internally refer to travel agents as a type of customer while others believe the Triangle should be a Diamond with Travel Agents as a 4th constituency. However one looks at this, travel agents are important in our world. So are the destinations and communities we serve around the world.
Let’s look at each of the three constituencies of the Triangle in turn:
Customers – They want great and memorable vacations. They want the best value possible for their money. They want to be recognized for their loyalty.
Employees – They want to do their jobs well. They want to be recognized for their contributions. They want training and opportunities to advance their careers. In the case of our shipboard personnel, they want acceptable living and working conditions 24/7 while they’re onboard.
Shareholders – They want a great return on their investment. They want us to conduct our business to the highest standard of governance. They want as much visibility into our business model as possible.
The way to maximize shareholder value – the purpose of a business — is to make decisions that are as beneficial as possible to the interests of the three constituencies of the Triangle. In the short term, not every decision can be completely pleasing simultaneously to each of the three constituencies (not to mention, as I alluded to in a previous blog entry that within each constituency there is often considerable disagreement!) But, at a minimum, each of the three should feel that most of the decisions we make are understandable and positive for them. We spend a lot of our time understanding and handling trade-offs that the various interests within Triangle pose to us. One of the opportunities this blog presents is to explain some of these trade-offs as they unfold. I know you won’t agree with me 100% of the time but hopefully you’ll understand where I’m coming from nearly all of the time. And hopefully you’ll be enthusiastic enough about our way forward to want to continue to experience Royal Caribbean International’s products and services.