Risk & Business Magazine F.A. Peabody Insurance Fall 2015 | Page 10

Like the tradeoffs between the balance
sheet and the P&L; it’s this reputation/
productivity balance that is the essence
of business. We want to make our
customers, employees, and shareholders
increasingly happier, which should lead
to a more valuable company; but we
can’t give away the store in the process.
“We want to make our customers,
employees, and shareholders increasingly
happier, which should lead to a more
valuable company; but we can’t give
away the store in the process.”
this one), etc. In turn, the customer group
represents all those who pay you. After
you subtract one from the other, what’s
left over, hopefully, is some cash to pay
back the bank, investors, and the owners.
It greatly simplifies how you view a
balance sheet if you look at it through
this three-stakeholder lens. If you
think about the balance sheet, it lists a
bunch of people and organizations with
whom your business has a monetary
relationship, telling you who owes
who and what cash, if any, remains
– hopefully a significant amount
of cash(flow) if you’ve structured
the business model correctly!
Process/Activities
These three groups of people, in any
busine