Could You Sacrifice Your Customers of Today for Tomorrow?

An Article By: Evan Leonard, President, CHIPS Technology Group Inc.
Last week I was in Dallas participating in Officer training for the Long Island Chapter of YPO as I am becoming the Education Chair.  As part of the training, we were given the opportunity to interview the ex-GM of the Philadelphia 76ers, Sam Hinkie.  For those of you who are not basketball fans or don’t know of Sam, he has been a polarizing figure for the past three NBA seasons.  During his tenure, the 76ers have been one of the worst teams the NBA has ever seen.
He believed the best way to build a great team is to stockpile top 5 draft picks over the course of a few seasons since the team can’t land big name free agents.  His strategy was to try to draft the next LeBron James or Stephan Curry or Kevin Durant by accumulating as many picks as possible in a few year period.
Sam had the support of ownership including the Private Equity partners of the 76ers but no one could predict what came along with the “losing to win” strategy.
The idea sounds great in a presentation but did they really understand the impact it was going to have on their clients, 76er fans?  Losing as a tactic to try and win a title and put more money in the owner’s pocket was a big risk.  Will their customers ever come back and can they regain employee moral?  I immediately thought about my own and my client’s businesses.  We all need to make strategic decisions to grow or stay in business.  It is imperative to understand how this will affect others as we make changes.
The customers of the 76ers were sacrificed for this unproven strategy.  Could you sacrifice and alienate your clients for the mere hope of greatness?  How long could your clients sustain feeling pain?
Changing your business model or having the industry change in ways that affect your business is not as simple as it appears.  We need to think of the effects of our plan on the organization, employees, vendors, systems, and clients. 
Being in the technology business gives me a great perspective on what this means in practice.  In the 20+ years CHIPS has been in business, we have had to change our business model 5 times to keep up.  I often joke about the early days when we had to go and sell clients on the need for e-mail!  If you had told me or my clients about things like smartphones or the cloud, we probably would have laughed, and thought you were crazy.  Yet we continue to try and stay on top of trends and how we deliver support and services to meet changing needs and demands.
The business climate is changing and the next generation of employees are demanding to work differently. If you get a chance to read Sam's letter to ownership when he resigned, it makes for a great business case study.