27 May 2013

A MESSAGE TO WALL STREET - Are You Just Another Hungry Hippo?














Analyst reports: the ever-present companion to a corporate exec’s life. I know,

because they were my ever-present companions when I worked in corporate 

life.

Too many things in corporate life are geared around the analyst reports. They 

seem to make people act like rabbits in headlights. They can’t focus on 

anything other than what’s in front of them. It’s understandable, because 

analysts are good at what they do. They look at the facts of today and make 

predictions for the future of your business. But in today’s business 

environment, in my view, analysts are missing a part of the big picture that 

could lead to a poor analysis of where a company’s future may lie - the impact 

of improving their organization’s Customer Experience.

Companies Create Customer Dissatisfaction to Meet Short Term Goals
In these days of cutting costs to increase margins and a no-fail attitude on 

posting growth every quarter, analysts are tasked with finding out how the 

company is going to make the numbers for the next quarter so the earnings 

report will boost the stock price, and it appears they don’t concern themselves 

with the long term effect on the Customer Experience. These cuts will post 

growth this quarter, which is the only thing that the analyst’s bosses want to 

see. However, cost cutting such as limiting the call-center hours to 9 to 5 

Eastern Time or dismantling the warranty program can prove to be a big deal 

to the Customer. Yes, it boosts immediate profits but causes a poor 

experience and the Customer can be lost for the future.


But somewhere between their analysis of the strengths and weaknesses of 

the company’s ability to make the bottom line this quarter, the analysts and 

his or her boss missed the opportunity to prevent one of their biggest threats 

to long-term growth: a poor Customer Experience.


An Exception in Big Business
One company that does not buy into the need to post huge growth every 

quarter is Amazon.com. Their long-term vision has resulted in actions that are 

the opposite of what the rest of the pack is doing. It is because of these 

actions and their lack of huge profits every quarter that Amazon.com is 

regarded with a sense of incredulity and even dismissive derision by their 

competitors.

Amazon knows that their methods are not business as usual today. In 

Amazon’s Letter to Shareholders last month, Amazon’s Founder and CEO Jeff 

Bezos details his plans for the future, which are being built today with 

foundations in customer satisfaction made from the materials of customer 

experience. From paying its authors monthly to proactively cutting prices to 

increase their value to customers, or even investing in technology that 

enhances the customer’s interaction, Amazon.com puts the customer 

experience at the top of their short and long-term to-do list. It is no mistake 

that Amazon.com is one of the longest living online entities of the new 

millennium. They have planned for this future and built it, one satisfied 

customer at a time.


The Hungry Hippos vs. Monopoly Approach
When I was a boy, I played a game called Hungry Hippos. In it, you grab the 

handle of the hippo and try to gobble up the little white marbles before your 

opponent does. The game ends when each respective hippo has gobbled all 

the marbles up and the player with the most marbles wins. The game lasts 

about 60 seconds, at best. There isn’t a lot of strategy and honestly, unless 

you have a bionic thumb, there isn’t a lot of skill involved with winning it. You 

are no more likely to win one round over another with much of the game being 

decided on which way the marble rolls at any given time. Or, in other words,

 luck. If I was being harsh I would say this is what companies are like today, 

in part driven by the short term reporting.

I also played Monopoly. This game requires a sound strategy for how to spend 

one’s money, which properties should be purchased and when, then populated 

by houses and hotels over time. This game requires a lot of thinking and 

planning for a future result. The longest game of Monopoly I played took my 

friends and I five hours to complete.

Unlike the Hippos, Monopoly took planning and time. Amazon are playing 

Monopoly not Hungry Hippo’s. With strategy you could win the game in the 

long term and make even more money than using the Hungry Hippo’s 

approach.
More companies need to play Monopoly more rather than Hungry Hippos and in 

my view, analysts should be encouraging this with the questions they ask 

about how the organization is going to improve their Customer Experience 

measures.

If you ignore your long-term goals in order to gobble up the marbles of 

quarterly earning numbers, cutting services that customers rely upon and that 

enhance their experience, you will create disharmony in your relationship. And 

as anyone who has been through it can tell you, harming a relationship just 

takes an instant but building it back can take months, or even years.

So repairing your customer service satisfaction levels can add more time to 

your strategy and implementation phase. This is time that few businesses 

have the resources to weather. For this reason, I believe that damaging your 

customer experience satisfaction levels in the name of profit could be the 

beginning of the end of your business.

Analysts Need to Consider the Customer Experience in Their Evaluation
Don’t get me wrong. I believe in analysis. I believe that knowing your 

strengths and weaknesses, your opportunities and threats is a good business 

strategy. I believe that you should listen to the analysis that you have 

invested time and money to have when you construct both your short and 

long-term strategy. But you need to protect the customer experience when 

building them or your strategy is likely to fail you in the long run.

Analysts must include the Customer Experience measures in their reports, 

along with all their other important data. Because without it, their data is 

incomplete as will be their predictions. They could, in fact, predict a future for 

a company that will no longer exist because all their customers were gobbled 

up by another hungry hippo!