The #1 Dumb Thing Businesses Do to Hurt Themselves

If you really want to hurt your business, ignore what your customers want. Let me give you a few examples of this stupid business trick in action.
10/23/2014 05:27 pm ET Updated Dec 23, 2014

If you really want to hurt your business, ignore what your customers want. Let me give you a few examples of this stupid business trick in action.

If you're a seafood fan like me, chances are you've eaten at Red Lobster. A couple years ago, I noticed the quality of service sharply decreased. It turns out, in their never-ending quest to cut costs, the owners eliminated all busboy positions and demoted many of the servers. In addition to bussing their own tables, servers now had to take on four tables at a time instead of three. The leadership did so after convincing themselves, somehow, that both the wait staff and the customers approved. Actually, they didn't. People got sick of waiting for clean tables and meals, and started voting with their feet. Less than a year later, Red Lobster rescinded the policy, and business has picked up since.

Downsizing can be deadly, and not simply because it overworks the surviving employees, but because it can lower your ability to respond to customer needs. You may have read my previous discussions of Circuit City's suicidal decision to save money by replacing commission-based sales personnel with minimum-wage newbies who didn't know the difference between a USB port and an Ethernet plug. People stopped buying, and Circuit City died an ignominious death. Leadership forgot that while labor is your biggest expense, your employees are your greatest asset.

Borders couldn't adapt to the e-book phenomenon customers were demanding, whereas Barnes and Noble embraced it wholeheartedly. Borders eventually went the way of the buggy-whip makers who thought horseless carriages were a passing fad. Speaking of passing fads, wasn't that what the old Bulletin Board Services called the Internet? When was the last time you dialed into a BSB? (Do you even remember them at all?)

Netflix also ignored customer desires to their peril. They started out by mailing DVDs to subscribers, then added online video streaming. Eventually, Netflix decided to split the services into different two companies, despite the outcry against it. They stuck to their guns, making ready to spin off the DVD mailing as Quickster. They even hiked their fees...then, just as Quickster was almost a reality, they killed it. Those who had gotten used to the idea were outraged again. Once the brouhaha calmed down, Netflix finally stopped reloading the gun they kept shooting themselves in the foot with.

Bottom line: keep your ear to the ground, do what your customers love, and make changes that follow their desires.

© 2014 Laura Stack. Laura Stack, MBA, is America's Premier Expert in Productivity™. Laura is the bestselling author of six books, with over 20 foreign editions, published by Random House, Wiley, and Berrett-Koehler, including her newest work, Execution IS the Strategy (March 2014). Widely regarded as one of the leading experts in the field of performance and workplace issues, Laura has been featured on the CBS Early Show, CNN, the Wall Street Journal, and the New York Times. Connect via her website, Facebook, or Twitter.