CEOs: Don’t blame your customers

Tupperware Brands’ leadership finally figured out the reason for the sliding U.S. revenues: it’s my fault. And yours. And pretty much all of America’s fault, apparently.

“The USA is basically a Walmart market. Our top- tier products like the Microsteamer or the Ultra Plus — that are 100-year-old products — hard to sell them in the U.S. because that’s a discount market over there,” CEO Rick Goings said during a 2013 earnings call.

“Take a look at the average brand of cab that you get in the New York cities. I mean, they’re filthy; they’re junk […] They buy price,” Goings said of Americans. “Europe buys quality, Japan quality.”

Goings, the British CEO of the venerable U.S. brand, is complaining about the “cheapening” of American consumers at the same time that Torsten Mueller Otvos, the German CEO of venerable British brand Rolls Royce, is posting the company’s best year ever.

That’s right: at the same time that Ford, GM, even Toyota are shuttering plants around the world, ultra-luxury carmakers are posting record profits. We see this same phenomenon in one industry after another: computers and mobile devices (Apple), watches (Rolex), software (SAP), professional services (McKinnsey), stereos (Bose), groceries (Whole Foods), aircraft (Gulfstream Jets), medicine (Urgent Care Clinics), plus consumer goods, food, and dry goods of all kinds.

Poor Me Syndrome

My father used to remind me as a kid not to get sucked into a spiral of self-pity when things didn’t go my way. “Everyone’s got obstacles,” he’d say. “So do you want a ‘Poor Me’ tee shirt, or do you wanna get busy and do something about it?”

Clients whose companies have hit a plateau in their growth or profitability, what I call the Success Trap, frequently succumb to Poor Me Syndrome.

But this is deadly for organizations. It causes management to circle the wagons and focus on cost-cutting alone to maintain or increase profitability, because leaders assume that increased top-line revenue is simply beyond their control. As a result, the company fails to invest in innovation and new business development. Indeed, later in that same earnings call, Tupperware CEO Rick Goings notes that the company is putting more eggs in their European basket of investors (i.e., Tupperware distributors):

“Frankly, our approach is to get more of our investor base over here [Europe]. Most of the investor base over here the kind we like tend to hold fewer names and hold them longer, and this leaves senior management time to work on the business rather than Investor Relations.”

Are you selling yourself short?

As a leader or entrepreneur, don’t blame the economy or your customers for your lack of growth. Look in the mirror. What are you doing to grow a premium brand for yourself or your organization? If you can’t see a way out of your Success Trap, consult your team- and not just the usual suspects. There may be good ideas locked inside the heads of your line-level managers or front-line employees, advisory board, volunteers, and customers.

Techniques for innovation

Here are a few jump-starters to break free of your current malaise:

Go upmarket.

Companies in competitive industries often find themselves forced to offer more and more for less and less; what I call the death spiral, because it leads to the death of your profitability. Instead, try adding a ‘premium’ or ‘luxury’ choice to your offering. This works for any organization, including non-profits. The key is not asking customers to pay more, but finding the value that they’ll pay more for, and how to fund the added value in the most palatable way (charging customers directly is only one way, and the least creative, at that).

Look for internal patents.

Problems that you have solved may still be vexing others (including your competitors). The technology solutions that you created in-house may be intellectual property (IP) that you can market, even outside your own industry. Training materials, production processes, and even marketing approaches and materials may all be viable IP. If you have not created a go-to-market plan for your own IP before, then consult experts, including an attorney. Do a quick survey of the existing market before investing too much time and money.

Nix the non-results.

As with the ships in dry-dock mentioned earlier, identify the places where your organization is paying dearly for not doing, i.e., not producing, selling, or collecting. Start by looking for places where time is a major component of cost. Then confer with your team how these can be reengineered to reduce waste. You’ll need to ensure that your financials are tracking the numbers that matter, and how they compare to other organizations in your industry, market, and size.

Fresh eyes

If these conversations are difficult to orchestrate, or you find the ideas are still trapped inside the echo chamber, get outside help. The best executives, athletes, and artists all use outside advisors to hold a mirror to their own performance. Sometimes a fresh perspective is all that a leader needs to make the leap from good great.

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