By John Peterson
“Sacred Cow (noun); An idea, custom or institution held to be above criticism.”
We business owners often forget this important analogy that can help us to get serious about the ongoing evaluation of who we are, what we do, how we do it, and who we employ to do it for us.
Sacred Cow Syndrome has long been understood in corporate America as a term to help executives to stop and evaluate their entire businesses more effectively. The term “Sacred Cow” alludes to something that has been beyond scrutiny in the past, but now may need you to take a long hard look at it.
COMMON EXAMPLES OF SACRED COW SYNDROME
- Your Entire Business is slowly grinding to a halt.
- Your Target Market is changing their behaviour or wanting something new.
- Your Products or Services are losing ground and yet you’re trying your best.
- Your Customers are not returning as often as they used to.
- Your Employees don’t seem to produce the same results they used to.
- YOUR ENTIRE BUSINESS IS SLOWLY GRINDING TO A HALT
As a big business example, a Sacred Cow once destroyed Kodak’s ability to achieve first mover advantage in the digital camera space, virtually costing the company its entire existence. Many other examples also no longer exist. These include the majority of milk bars, small hardware stores and video rental stores, etc., whereby the industry simply vaporised over time due to changes in consumer behaviours and expectations or technology. It doesn’t just “happen” to small business sectors. For example, GE is now predominantly a finance company, which has nothing to do with its origin.
So depending on your industry and / or how technology or buyer behaviour is transforming the nature of your industry, this may or may not be the case for you.
2. YOUR TARGET MARKET IS CHANGING THEIR BEHAVIOUR OR WANTING SOMETHING NEW
In small to medium businesses, Sacred Cow Syndrome can present itself in many forms. For example, you may be servicing a particular region or set of customers and, once properly analysed, you discover that particular territory or series of customers is actually costing you money.
Sacred Cows can be incredibly dangerous and, potentially, very financially destructive or even fatal to your business because they’re easily overlooked. It’s just like an odd job that needs doing around the house but it hasn’t been addressed for so long that you now overlook it every day. The difference with an odd job is that it’s not likely to send you broke but a Sacred Cow very well might.
One of my clients recently discovered that one of his “cash cows” turned out to be a potentially fatal Sacred Cow instead. His very lucrative industry sector had provided him and his family with an extremely solid, profitable income for many years and then, suddenly, the sacred cow was facing an “uber-like” disruptor which threatened his entire business’s existence. He now realises he was ignoring this Sacred Cow threat for a number of years and if he had been more realistic sooner, he may have been in much better shape right now to deal with what has become a genuine crisis and life-threatening issue for his business.
3. YOUR PRODUCTS OR SERVICES ARE LOSING GROUND, YET YOU’RE TRYING YOUR BEST
Markets evolve and so does your market share. What may have once been a highly lucrative niche sector for you can grow old and become unfashionable over time. Look at how much work multinational companies do to keep repackaging or refreshing a product that has been around for a long time. Tactics like “new and improved formula,” “now with this magic ingredient,” or “now endorsed by this amazing athlete so it must be a great product” are all examples of strategies to inject new life and appeal into an existing product or brand.
If your products or services fit into one of these “old” categories, there may be something you can do, like in these examples, to inject more life into them. Completely new artwork or an overhaul of your website and brochure list may help you achieve this.
4. YOUR CUSTOMERS ARE NOT RETURNING AS OFTEN AS THEY USED TO
You should ask them why! If you’re not willing to do this, then perhaps you’re in a deep state of denial that there’s even a problem at all. Asking a once very active or loyal customer what might have changed for them may seem a scary concept and you may not get exactly the facts at the outset. But if you can get them talking, then usually a few minutes into the conversation, you’ll get to the truth of the matter from their perspective. Customers don’t like to feel uncomfortable and, at first, most of them would prefer to smile and make up a soft excuse rather than hit you between the eyes. However, once they realise you’re sincere and genuinely want to know, you may be surprised just how honest some are willing to be. This can be absolute gold in terms of understanding what’s going on out there in your market place, and how valuable your customers perceive you and your business to be to them, rather than how valuable you think you are.
5. YOUR EMPLOYEES DON’T SEEM TO PRODUCE THE SAME RESULTS THEY USED TO
Another example may be a particular employee who has been with you for a long time, or has stayed with you through hard times in the past, so your sense of loyalty to them is understandable. However, when you really stop and evaluate what they do for you, you realise their ROI (return on your investment) is not there anymore.
Another client offered an example of a Sacred Cow in terms of a long-term employee who had progressively manipulated themselves into being a Sacred Cow internally, and he was astonished to realise how unproductive and costly this person had become to his business. He eventually realised the employee kept him distracted quite regularly with criticisms and suggestions regarding what the business owner needed to do differently himself and, in doing so, maintained a constant state of not being evaluated as an employee themselves.
If you discover you have a Sacred Cow employee, it’s important not to just blame them because, after all, you’re the employer and have been in charge all along. So it has been a process of mutual acceptance over time which has led to the issue you now face – THE BASEBALL BAT YOU DON’T WANT.
As a business owner, Sacred Cows are the baseball bats your forehead eventually walks straight into, apparently unaware that usually the issue has been there all along. The real challenge is that once you’ve bumped your head and realised you’re facing a Sacred Cow, you must take massive action to address the problem and not sweep it under the carpet, because the cow may kill your business if you stay in denial.
Remember that change in business really does mean progress, even in those tough times when you have to “go backwards to go forwards.”
The hardest part about this is your own ego and having to roll your sleeves up and drive changes through a more hands-on approach. By its very nature, this can feel like a backwards step whereas, in reality, it’s most likely essential to ensure the vitality and long-term sustainability of your business and, if that’s the case, then anything that’s essential is not a backwards step, it’s a must.
IDEALS CAN BE SACRED COWS TOO
Sometimes we can hold to ideals about how things will eventually “work out.” An ideal that isn’t working for you is another, more positive way to say someone is being pig headed. Refusing to accept what the facts and figures may be telling you because your ideal or vision of the future is so inspiring that you don’t accept anything that gets in the way of this in the short term. When your vision is so compelling that you’re genuinely excited by it, you also need to be realistic in the short term. Sound commercial principles can’t be overlooked in your daily, weekly and monthly habits or you may find yourself one day sharing your great vision of what might have been…at the bar with a bunch of strangers because you lost it all through ignorance.
Remember that forcing yourself to offer a new product or range of services, losing a particular part of your business, dumping a costly customer segment or letting go of some people that your cash flow can’t afford or who no longer fit into the future direction of your business isn’t easy. But if it was going to be easy, then everyone’s surnames would be Branson, Jobs or Buffett, wouldn’t they?
Until next time!
John Peterson’s track record in assisting businesses to achieve rapid Growth and Succession Planning is second to none. A self- made, serial entrepreneur, John is the founding Director of a number of privately owned companies in Australia, including Providence BSM (Buy, Sell, Merge), Best Practice Marketing, Providence Advice Services, and Cash Momentum. John has studied the mindset of entrepreneurs for more than twenty-five years. From humble beginnings, John’s fascination with business success was first discovered in the Advertising industry, which later blossomed in a Fortune 500 consulting company and then in rapid growth environments as CEO in Hong Kong, Singapore and Australia. His perspective on business success includes dismal failures along with significant triumphs. John’s personal values resonate throughout the companies he runs and these values are evident in the behaviours and passion every single one of his employees demonstrate on a daily basis. John is most proud of creating the “Best Practice Program,” the world’s only Fortune 500 business education, coaching and mentoring program affordable to small – medium businesses. Revolutionary in that the program offers every business owner the opportunity to pursue and achieve Business Mastery.