Ugh... but tomorrow we diet!

Greetings and welcome to 2019 every one! This year's only 7 days in and already governments are shut down, R&B and rap stars are getting called out for past indiscretions and everyone's favorite fruit themed tech company is trying to explain why their products aren't selling. It looks like if nothing else, 2019 won't be boring. In last week's article, I encouraged everyone not to let the challenges get them down. I also acknowledged that for many people, the end of the year is a time to forget their inhibitions and do whatever feels right. Let me clarify, I did not, nor do I encourage this behavior, I simply acknowledge that it is a trend as the year wraps up and I recognize that trying to prevent it is in many cases an exercise in futility.

So now that we've thrown caution to the wind and partied like it's 1999 (again) where does that leave us? For many people, it left them with the combination of nausea, headache and dry-mouth commonly referred to as a hangover. I'm sure there are several other consequences that could come along with an evening of bad decisions, but in the interest of keeping it PG, I'll stick with the most ubiquitously understood example. For many people, the go-to response to a hangover is to grab an over the counter medication of some sort. Others prefer to try to sleep off the symptoms. There are even some people who believe that the best way to deal with a hangover is to pour another glass of whatever beverage gave it to you in the first place. While these are all options and all may help cure the symptoms with varying degrees of success, I myself took a different approach the last time I found myself hung-over almost a decade ago. Partially by choice and partially as a result of an unforseen series of circumstances, I couldn't sleep it off, I couldn't take any meds and I couldn't stomach another drop of the beverage that had done me in the night before. Instead, I was forces to sit in my hungover state and just deal with it. I had to face the consequences of my actions unaided and acknowledge how much it sucked.

You might be wondering why I'm talking about a new years day hangover in an entertainment business blog. If you recall, I started this post by casually referencing a few newsworthy occurrences that have happened since the year has begun. If anyone were to analyze any of these situations, one would realize that the circumstances leading up to said events were not unlike a night of dining and drinking leading up to the new year. Virtually everyone knows what a hangover is, and avoiding on isn't really difficult. The problem is that many people prioritize the enjoyment of the moment over the pain of the consequences that are guaranteed to follow. I don't have a personal private security firm on retainer so I'm not going to address the issue of government shutdown, and I'm not a successful enough entertainer to go anywhere near the entertainment industry scandals, so I'll digress from those and talk about the state of the tech industry... although I'm sure the lessons learned will be equally applicable to those other scenarios.

It's amazing to look at the speed and impact of the recent technological progress we've seen. Within my lifetime I've seen paper maps all but disappear, I've seen constant connectivity to the internet become a reality for the majority of the world (though still not everyone), I've seen music stores close in malls across the country as media streaming became a reality, and we're even beginning to see malls themselves close as home delivery services begin to supplant them. With all of these tech companies coming of age and overshadowing their more analogue competition, one would think that they've been taking detailed notes of the demise of the fossilized establishments they have been displacing. I mean, every smart person knows that history tends to repeat itself. One of the things I think I'm beginning to learn as I get older is that individuals are smart, but when those individuals become a bureaucracy most of the intelligence goes out of the window in favor of following trends and industry best practices. That's not to say that there isn't something to be learned from best practices and trend analysis, but it's important to look at these things objectively when determining how to lead your organization. As I've said before, bad things happen when companies fail to properly prioritize the need to take care of the customer.

In the interest of not beating a dead horse, I'm not going to harp upon the importance of taking care of the customer. This is something everyone knows, but when things like shareholders and hedge funds get involved priorities can become cloudy and the person who most often gets forgotten about is the customer. For some strange reason, everyone tends to forget that in order for a product or service to be successful someone has to be willing to pay for it. Far too often corporate interests get so loud that taking care of the customer takes a back seat to making as much profit as possible with as little investment as possible. What boggles my mind even more is how often companies seem to think that all that's needed for a product to be more successful is more / better marketing and advertising. Don't get me wrong, marketing and advertising are of paramount importance and must always be thought of as investments as opposed to expenses, but they are part of a larger equation that leads to a successful product. Market research, product research, prototyping design, manufacturing, quality control, marketing, and advertising are all part of creating a successful product which leads to a successful company.

The sad truth is that so many corporate executives are so concerned about their own bottom line that they are only care about customer satisfaction to a degree necessary to ensure the payout of their next executive bonus. So what's the solution? The idea I would propose is to tie executive bonuses to customer satisfaction instead of share profitability. The problem with this, of course, is that the shareholders who are invested in the company want to see the share price go as high as possible and have little concern for actual customer satisfaction. What's a bit strange about this focus is how counter-intuitive it is. Satisfied customers tend to be loyal and repetitive customers. The problem is that shareholders want to see as much profitability as quickly as possible and corporate executives want to see as large an executive bonus as possible as quickly as possible. As such, no one seems to care about long term value except the customer and many of them are beginning to shift focus away from long term value as well.

There is a big problem that comes along with subconsciously signaling to customers that the companies they patronize don't care about long term value. Customers gradually begin to realize that it makes no sense to spend large sums of money on a quality product when they can just buy a cheaper product that they can replace just as easily. By removing the focus on long term value corporations self-cannibalize by eroding away the value of their brand. I believe we're seeing this play out in multiple arenas especially the tech field. From my perspectives, it looks like corporate America (and the rest of America as well, but that's another blog post) needs to go on a diet. Instead of focusing on quick market share growth we should be focused on long term sustainable growth. Virtually no successful investor ever made their fortune getting rich with overnight share price inflation. The more we gorge on instant gratification the worse that hangover's gonna hit us with prices come tumbling back down.