Introduction
Summary of the book A New Way To Think by Roger L. Martin. Before moving forward, let’s briefly explore the core idea of the book. Imagine entering a world where every company you encounter genuinely cares about making your life better. Instead of competing to impress distant investors, businesses focus their energy on understanding you—your needs, your preferences, and your well-being. In this world, brands earn your trust by continuously delivering quality, reliability, and fairness. They listen to your feedback, learn from your experiences, and improve their products over time. This is the vision that emerges when companies stop fixating on maximizing shareholder value and turn their attention to satisfying the people who actually use their products. The idea might feel refreshing, even surprising, but it’s gaining momentum. As we explore the chapters ahead, you’ll discover how this shift from shareholder-driven to customer-focused strategies can create stronger, more stable companies. By embracing a new way to think about corporate success, businesses stand ready to build a brighter future—one rooted in meaningful customer connections.
Chapter 1: How Shifting Business Focus from Shareholders to Customers Can Radically Redefine Corporate Growth .
Imagine a world where companies are no longer racing to satisfy a handful of distant investors who care mainly about quarterly numbers, but instead pour their energy into making their customers truly happy. Over the last century, businesses have frequently chased shareholder satisfaction as their ultimate goal, aiming to maximize returns at any cost. This approach, often known as shareholder value capitalism, took hold in the late 20th century and still influences many corporate leaders today. Yet, despite all the hype and promise, this persistent focus on shareholder gains has not always delivered the stable and long-lasting success companies initially hoped for. Instead, we’ve seen cycles of high expectations followed by dramatic crashes, leaving both companies and investors feeling restless and uncertain. The question that arises is: if constantly chasing shareholder value is not the key to long-term prosperity, what alternative can guide a business towards genuine, sustainable growth?
To answer this question, it helps to step back and understand how we reached this point. Historically, there were two major eras shaping modern capitalism. The first, known as managerial capitalism, emerged around 1932, as corporations began placing professionally trained managers at the helm. These managers were expected to balance various interests—employees, customers, communities, and suppliers—while maintaining a healthy bottom line. This system worked for a while but had its own shortcomings, often lacking a clear measure to determine a company’s success. Then, in 1976, a powerful new idea swept through boardrooms everywhere: the belief that a corporation’s sole purpose was to maximize shareholder value. Suddenly, investors became the center of attention, and companies focused on soaring stock prices to prove their worth. Decades later, it’s becoming clear that this approach might not be the golden ticket it was promised to be.
So why is the shareholder-first mindset beginning to crack? One fundamental problem is that stock prices depend on future earnings expectations, not just actual earnings. If you keep raising expectations to keep shareholders happy, you can reach a point where the company simply cannot meet these oversized hopes. Once this happens, the market reacts harshly, and stock prices plummet. These cycles—full of abrupt ups and downs—can wreak havoc on a company’s stability and even threaten its long-term survival. Moreover, relentless pressure to push up short-term stock values leaves less room to invest in research, product quality, employee training, and improved customer experiences. Instead of building a strong, trustworthy brand that consumers love over time, some companies chase quick investor approval, risking their reputation and their ability to innovate. In other words, making shareholders your number-one priority can erode the very foundation of lasting business success.
But a new idea is gaining ground. Instead of always dancing to the tune of shareholders, wise companies are reorienting themselves toward those who actually use their products and services—customers. By prioritizing customer needs, preferences, and satisfaction, organizations can nurture a loyal following that endures through market shifts and economic storms. Customers who feel understood, respected, and valued will become faithful brand ambassadors, spreading positive word-of-mouth recommendations. Over time, this stable base of happy consumers can translate into reliable revenue streams and balanced growth that doesn’t rely on impossible expectations. It’s as if companies are finally discovering that investing in long-term trust and quality pays off more than chasing short-lived surges in stock price. This chapter sets the stage for understanding how the customer-first approach can transform corporate culture and result in more dependable, meaningful success than the old, shareholder-centered model ever could.
Chapter 2: Understanding Why Maximizing Shareholder Value Alone Leads to Unstable Market Expectations .
At first glance, the idea of maximizing shareholder value sounds simple and appealing. After all, aren’t shareholders the owners of the company, deserving the largest slice of the pie? In reality, this singular focus on shareholders often sets companies up for a precarious balancing act. The reliance on boosting share prices rests heavily on ever-increasing expectations. Investors want to see rapid growth, higher profits, and bigger dividends, even when the market conditions, competition, or consumer trends don’t support such lofty dreams. As these expectations balloon, they become harder to meet. Eventually, the mismatch between what investors anticipate and what the company can deliver becomes too large. The bubble bursts, and we see sharp declines in stock values that not only rattle shareholders but also damage the company’s reputation, employee morale, and customer trust. This cycle of inflated hopes and inevitable disappointments undermines long-term stability.
When management teams are under constant pressure to feed this hungry beast of rising shareholder expectations, they often start making choices that favor short-term results over long-term health. For example, imagine a company deciding to cut funding for a promising new product line that needs time to mature, just so they can meet earnings targets for the next quarter. Or consider a CEO who hesitates to invest in advanced training for employees because that expenditure might reduce this year’s profits, even though well-trained employees could create stronger products and happier customers in the long run. These decisions, driven by the urgency to please shareholders, push aside the fundamental factors that create real value—excellence in quality, customer satisfaction, reliable supply chains, and consistent innovation. Over time, this approach can lead to hollowed-out businesses that look good on paper but lack genuine strength.
The market itself becomes part of the problem. Investors, knowing that companies are trying desperately to meet their often unrealistic expectations, may push those expectations even further, betting on endless growth. But no company, no matter how brilliant, can grow without limit. Eventually, the entire system becomes unstable. When a disappointment finally occurs—maybe a new product fails, a competitor leaps ahead, or a global economic slowdown hits—everyone scrambles to adjust their expectations downward. Stock prices collapse, investors panic, and confidence erodes. In the aftermath, employees might lose their jobs, research projects get shelved, and relationships with customers become strained. This messy outcome is far from the glorious future that shareholder-value champions had promised. Instead of smooth progress, we get roller-coaster rides through unpredictable peaks and valleys that leave everyone dizzy and uncertain.
All of this chaos raises critical questions. Should companies continue to be guided by the whims of short-term stock performance and investor demands? Or is there a steadier path that companies can follow, one rooted in stable growth and long-term prosperity? Many forward-thinking business leaders and scholars are now suggesting that aligning corporate efforts with customer welfare can offer the stability and clarity that blind pursuit of shareholder gains lacks. Customers don’t demand endless expansions of profit every quarter. They care about getting consistent quality, reliable service, and products that actually meet their needs. By focusing on delivering excellence and building trust, companies can free themselves from the unrealistic burdens of shareholder-driven pressures. This shift requires bold thinking and a willingness to challenge old assumptions, but it just might hold the key to a more balanced and secure future for businesses worldwide.
Chapter 3: Examples of Customer-Centric Companies That Have Strengthened Their Foundations and Flourished .
To understand how customer-centric strategies work in practice, let’s examine some companies that embraced this approach and thrived. One classic example is Johnson & Johnson, a company known for putting the well-being of its customers and patients first. Rather than focusing exclusively on shareholder value, Johnson & Johnson has long emphasized ethical standards, product safety, and genuine care. Over the decades, this approach helped it build a name that people trust and respect. Customers know that when they purchase Johnson & Johnson products, they’re likely to be investing in something safe, reliable, and good for their families. This steady, customer-first reputation became a powerful backbone of the company’s success, allowing it to weather market fluctuations more gracefully than many of its competitors who chase quick but fragile shareholder approval. While shareholders still benefit from J&J’s overall growth, they are not the only priority.
Another striking example is Unilever under the leadership of Paul Polman. When Polman took the helm in 2009, he boldly announced that Unilever would no longer provide short-term earnings forecasts to satisfy impatient investors. Instead, the company would channel its energy into creating products that customers genuinely love and addressing social and environmental challenges. Instead of pleasing shareholders with quarter-to-quarter results, Unilever concentrated on developing strong brands, improving sustainability, and enhancing the lives of customers around the globe. Critics doubted this strategy at first, but the results spoke for themselves. Over a decade, the company’s stock price rose by 266%—a remarkable achievement that came not from catering to shareholders’ every whim, but from building a resilient customer base and nurturing long-term brand loyalty. This example proves that putting customers first does not mean neglecting financial success; it often leads to stronger, more stable investor returns as well.
What makes these companies stand out is their commitment to building genuine relationships with customers, not just treating them as revenue sources. They invest in customer research, listen carefully to feedback, and continually improve their products and services. Instead of making decisions based solely on stock price predictions, they ask, How can we serve our customers better? This might mean introducing healthier ingredients, improving package designs for convenience, or offering superior customer service support. It could also mean stepping into socially responsible roles, such as reducing plastic waste or supporting local communities. Over time, these actions reinforce a trustworthy brand image, and customers return the favor by staying loyal, recommending the brand to friends, and buying again. While shareholders might not see spectacular short-term spikes, the value of these customer-centric companies tends to rise steadily, guided by a solid foundation of public trust and consumer satisfaction.
These success stories illustrate an important principle: concentrating on customer happiness and satisfaction lays a more reliable groundwork for long-term prosperity than chasing fleeting stock market gains. When a company builds its reputation on genuine care and quality rather than hype and speculation, it becomes more adaptable in the face of challenges. Economic downturns, new competitors, or changing consumer tastes are easier to navigate because the company has an established relationship with its core audience. The trust and goodwill cultivated by customer-centric strategies don’t vanish overnight when a stock price falls. Instead, these positive relationships can serve as shock absorbers, protecting the company from sudden, destabilizing market swings. By shifting focus from shareholder-centered thinking to a more balanced perspective that puts customers at the heart of corporate decision-making, organizations can achieve a healthier, more enduring success story for everyone involved.
Chapter 4: Breaking the Cycle of Short-Term Thinking and Aligning Incentives with Long-Term Customer Value .
One of the biggest challenges companies face when trying to move away from the shareholder-first model is breaking the cycle of short-term thinking. Many executives are rewarded based on how well their company’s stock performs in the near future. Stock-based compensation packages and bonus structures can tempt leaders to concentrate on quick fixes—such as cutting essential projects, laying off valuable employees, or shrinking product quality corners—to boost earnings right now. While these tactics might satisfy shareholders temporarily, they often undermine a company’s long-term health. To create a meaningful shift, companies must reconsider how they measure and reward success. Instead of praising leaders for only short-term results, businesses can align incentives with customer satisfaction metrics, product quality improvements, and steady, sustainable growth that ensures the company thrives for decades, not just a few financial quarters.
This isn’t always easy. Adjusting incentive structures requires rethinking long-standing traditions within corporate governance. Boards of directors, executive teams, and even investors must understand that long-term stability often trumps short-term gains. They must recognize that a secure future comes from building trust with customers, creating desirable products, and investing in the workforce. By tying executive compensation to multi-year improvements in customer loyalty, product innovation, and market share—rather than a single quarter’s earnings—companies can shift the mindset at the top. Leaders who are empowered to think long-term become more willing to take calculated risks that yield stronger connections with customers and stronger brand loyalty. Over time, this approach encourages innovation, better training for employees, and lasting relationships that outlive the mood swings of the stock market.
Consider a scenario where a CEO’s bonus depends not on whether the stock price jumped this month, but on how customers rate the company’s service over multiple years. If that CEO knows their compensation hinges on customer happiness and sustained brand growth, they’re likely to invest in initiatives that genuinely matter to end users. They might focus on creating a more intuitive online platform, improving product durability, or launching a loyalty program that rewards long-standing customers. As these efforts accumulate, customers begin to notice the difference. They return more often, spend more money, and recommend the company’s products to friends and family. Slowly but surely, a solid foundation of customer trust and admiration forms. This leads to more predictable revenues and, eventually, a stock price that reflects genuine business strength, not speculative bubbles.
Adjusting incentives to focus on long-term customer value can have positive ripple effects throughout the entire organization. Employees, seeing that leadership prizes true innovation and customer happiness, become more engaged and motivated to deliver their best work. They understand that their efforts contribute to a company that values building something meaningful rather than chasing a temporary spike in share prices. Customers, on the receiving end of this commitment, feel respected and appreciated. They know the company listens to their feedback and strives to meet their evolving needs. Over time, this balanced approach to incentives helps everyone—shareholders included—benefit from a stable, trustworthy business that can stand strong against economic uncertainties and competitive pressures. It replaces the shaky reliance on short-term investor enthusiasm with a durable structure supported by genuine customer relationships and operational excellence.
Chapter 5: Reimagining Corporate Purpose to Embrace Customer Welfare and Business Ethics as Core Values .
At the heart of this transformative shift is a fundamental reimagining of what it means to be a successful company. Instead of viewing the corporation as a machine designed solely to enrich shareholders, imagine it as a vibrant ecosystem sustained by multiple stakeholders. These include customers who rely on the company’s products, employees who work diligently behind the scenes, suppliers who provide quality materials, communities that depend on sustainable practices, and yes, shareholders who still deserve a fair return. By embracing a more holistic purpose, companies can acknowledge that their actions reverberate beyond the quarterly earnings report. They have the power to shape social values, environmental policies, and even cultural attitudes. When a company stands for something more profound than a short-lived profit spike, it attracts customers who share these values, forging a relationship built on trust, respect, and a sense of mutual benefit.
This broader perspective encourages ethical decision-making. When executives know their company’s identity revolves around improving customers’ lives, they’re less likely to cut corners or launch products that might harm the people who trust them. Instead, they invest in better safety tests, more transparent labeling, and honest marketing messages. They consider the impact of their manufacturing processes on the environment, striving to reduce waste, water usage, or carbon emissions. By tying business success to ethical standards, companies become positive forces in society rather than profit-driven entities willing to overlook moral responsibility for the sake of a higher share price. Customers, in turn, appreciate these efforts. When they see a company genuinely trying to do good, they feel proud to support it. Their loyalty deepens, and a cycle emerges: ethical actions foster stronger trust and enduring success.
Aligning corporate purpose with customer welfare also encourages long-term planning. Instead of flipping strategies every few months to impress investors, companies consider how their products might evolve over years or even decades. They look ahead to future trends and potential problems, focusing on solutions that will sustain their customer base far into the future. For example, they may invest in research to develop safer materials, design products that adapt to changing technologies, or create services that remain relevant as consumer habits shift. This forward-looking mindset makes companies more resilient. They’re ready to handle unexpected challenges, from economic downturns to new competitors, because they’ve anchored their success in customers’ genuine needs. As a result, when trouble arises, they can pivot gracefully, staying true to their purpose and retaining customer trust.
In a world where consumers have more information and choices than ever before, authenticity matters. Customers can sense when a company is genuinely committed to serving them versus when it’s simply performing a public relations routine. By truly reimagining corporate purpose around ethical, customer-focused principles, companies stand out in crowded marketplaces. They become beacons that consumers seek out. Over time, this genuine commitment shapes brand image, amplifies customer loyalty, and creates a stable base of support. This doesn’t eliminate profits—far from it. Profits flow naturally when a company consistently delivers what customers want and need, and does so in an ethical, responsible manner. Rather than treating ethics and customer care as barriers to profit, companies can see them as catalysts for sustained growth. In doing so, they create a healthier and more balanced environment in which both business and society can prosper.
Chapter 6: Building a Lasting Framework for Customer-Centered Management and Future Corporate Evolution .
As we move into the future, it’s important to understand that customer-centered management is not a one-time fix, but an evolving framework that must adapt to changing conditions. Consumers today are informed, discerning, and quick to share their experiences with others. They expect companies to listen, respond, and innovate responsibly. Organizations that can do this consistently position themselves for long-term relevance. It’s not just about treating the customer as king in a superficial way; it’s about embedding their well-being into every decision, from product design to marketing strategies and community involvement. This means being prepared to update old habits, abandon outdated assumptions, and embrace new ideas—always with the customer’s best interests at heart.
Companies that adopt this framework often create feedback loops to stay tuned into customer needs. They conduct surveys, hold focus groups, interact on social media, and pay attention to reviews. They track buying patterns, examine how customers use their products, and seek insights into their evolving preferences. Instead of making decisions in a closed corporate bubble, they open doors to meaningful dialogue with the people who matter most. This ongoing conversation helps companies fine-tune their offerings, spot emerging opportunities, and identify potential pitfalls before they become problems. Over time, this practice strengthens customer relationships and keeps the company’s growth rooted in reality rather than guesswork or speculation.
To ensure that customer-centered principles endure, leaders must weave these ideals into the company’s culture. This involves training employees to value customer satisfaction and empowering them with the tools, authority, and resources needed to deliver excellent service. It means recognizing and rewarding those who go above and beyond to help customers, because such behaviors reflect the company’s true identity. When everyone in the organization understands that their ultimate purpose is to enhance the customer’s experience, customer-centric thinking becomes second nature. The culture self-reinforces these values over time, ensuring that the company remains focused and balanced, even as challenges arise.
A future built on customer-centered principles is not an unrealistic dream—it’s a stable, beneficial path that many companies are already discovering. As more organizations move away from the narrow vision of maximizing shareholder value and toward a broader view that prioritizes customers, we may see a healthier business landscape emerge. Companies will be better prepared to handle fluctuations, find new growth avenues, and forge long-lasting bonds with the communities they serve. Shareholders, ironically, may still benefit handsomely, receiving steady returns over time rather than riding a terrifying roller-coaster of market volatility. The shift toward customer-centered management represents a more human, sustainable approach to doing business—one that can outlast fleeting trends and stand strong amid economic storms, leading us into a more balanced, customer-driven era of corporate evolution.
All about the Book
Discover innovative problem-solving techniques in Roger L. Martin’s ‘A New Way To Think.’ This transformative book empowers business leaders and thinkers to approach challenges with creativity and strategic insight for sustainable success.
Roger L. Martin, a leading business strategist and former Dean of Rotman School, inspires readers with his profound insights and groundbreaking ideas that shape modern business thinking.
Business Executives, Strategic Planners, Entrepreneurs, Consultants, Product Managers
Creative Writing, Entrepreneurship, Design Thinking, Problem Solving, Strategic Games
Lack of innovative thinking in organizations, Ineffective problem-solving methodologies, Resistance to change in corporate culture, Missed opportunities for strategic growth
To outthink the competition, we must first rethink our approach to strategy and innovation.
Malcolm Gladwell, Daniel Pink, Simon Sinek
National Business Book Award, Choice Outstanding Academic Title, Axiom Business Book Award
1. How can we shift our thinking toward possibilities? #2. What strategies can change our approach to problem-solving? #3. How does understanding mental models transform our decisions? #4. Can ambiguity lead to richer, more creative outcomes? #5. How do we cultivate a mindset of curiosity? #6. What role does empathy play in effective decision-making? #7. How can we embrace uncertainty in our thinking? #8. What techniques improve our critical and strategic thinking? #9. How can we better connect ideas across disciplines? #10. In what ways does collaboration enhance innovative thinking? #11. How can reframing problems lead to breakthrough solutions? #12. What practices promote a culture of continuous learning? #13. How does storytelling impact our understanding and influence? #14. What are the benefits of thinking in systems? #15. How can we identify and challenge our own biases? #16. What approaches foster adaptive and flexible thinking? #17. How does humility contribute to effective leadership? #18. In what ways can we encourage diverse perspectives? #19. How can we differentiate between facts and assumptions? #20. What steps can we take to implement change effectively?
A New Way To Think, Roger L. Martin, business strategy, innovative thinking, leadership, decision making, problem solving, creativity in business, management techniques, strategic thinking, organizational change, business innovation
https://www.amazon.com/dp/1422161481
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