Yet by January of 2011, five years later, Monster Inc. was rated the worst stock of the year. By 2014, things were worse. In that year alone, Monster's shares dropped 43 percent.
What went wrong?
Analysts suggested that Monster's free fall was due to their inability to compete with newer, more nimble, connected solutions like Indeed and LinkedIn. The analysts were right about the outcome, but they missed the root cause. Lack of competitive differentiation and old technology were only symptoms. The root cause for Monster's free fall was they lost their purpose.
In 2007, after Taylor and his team had left, Sal Iannuzzi became the CEO of Monster worldwide. Iannuzzi preached a very different message from Taylor's. Iannuzzi didn't talk about job seekers, or helping people find better lives. Instead, he put the focus on earnings. Without a leader to champion the cause, over time Monster's original noble purpose – helping people have better lives – eroded.
Iannuzzi's Town Hall meeting in June of 2014 illustrates the problem. Monster's stock was at an all-time low. Iannuzzi was announcing the launch of a new strategy and a global rebrand that were intended to reverse their decline.
When Iannuzzi took the stage at Monster headquarters in Weston, Massachusetts, to announce his plans, 800 employees were sitting in the auditorium, and over 4,000 more employees dialed in via webcast from 36 countries around the globe. The employees knew their company was at a critical juncture. Would they be hearing about a new strategy that would jolt their business back to life?
As Iannuzzi began, he talked about the need to increase earnings saying, “Our number one responsibility and focus is increasing shareholder value. That will pay us, that's why we're here.” He hammered on the point saying, “That's what we're here to talk about. Everything you're going to hear [today], the emphasis is on how we're going to do that.”3
The rest of Iannuzzi's presentation was a blur of numbers that concluded quickly. Not once during the entire presentation did Iannuzzi talk about Monster's aspirations for job seekers. There was no mention of better jobs and better lives. Instead, he told his team, the single goal of their new strategy was to increase the stock price. Not help customers, not improve the industry, just increase the earnings. Afterwards, one attendee said, “It was as though the oxygen was slowly leaving the room.”
When original Monster.com founder Jeff Taylor talks about his time at Monster he says, “The pride of helping millions of people find jobs was real inside the company. We read testimonials from people all over the world at our meetings. It was meaningful.”
Iannuzzi's narrative about stock price never touched on pride they might derive from helping people. His presentation at the Town Hall was consistent with the way he routinely discussed Monster in the press. For example, he said to the Wall Street Journal in May of 2012, “I owe it as part of my fiduciary responsibility to increase shareholder value any way that I can. That's what the process is all about.” This was same story he emphasized on a daily basis to his employees.
Sadly, Sal Iannuzzi is not unique. He's an exaggerated version of what happens in conference rooms and boardrooms every day. How many other leaders have had the same conversation with their teams? How many board meetings and departmental meetings have been exclusively focused on earnings with few or no conversations about customers?
Iannuzzi's focus on earnings was understandable. Like all CEOs, he was under pressure to drive the numbers. He might not be a bad guy. Yet he made a common leadership error. He focused on profit instead of purpose. In doing so, he eroded the driving force that had once made Monster great. Their business was no longer about making people's lives better; it was about making money, end of story.
Monster serves as a cautionary tale. The same scenario could have just as easily happened elsewhere. In fact, it already has. Companies like Blackberry, Blockbuster, Sears, and Toys ‘R’ Us, who were once giants in their spaces, took gut-wrenching tumbles when they lost their sense of purpose. It wasn't a loss of earnings that caused the loss of purpose; it was a loss of purpose that caused earnings to decline. In each of these organizations, the leaders were so intent on making money from their existing business model that they lost sight of their companies' true purpose: to improve their customers' lives. With no lens on the customer's world, they were outinnovated, outsold, and outmaneuvered. By focusing on profit instead of purpose, they became dinosaurs.
Under Iannuzzi's leadership, Monster's stock value declined by over 90 percent. Between April of 2007, when he was named CEO, and November of 2014, when he departed, Monster lost 93 percent of its market capitalization, falling from 5.5B USD to under 400M USD. Analysts said he was fired for declining stock value. Insiders know the loss of purpose came first. Fortunately, the Monster story does not end there. Iannuzzi's successor, CEO Timothy Yates, a long-time Monster employee, is taking a decidedly different approach. Yates launched an “All the Jobs, All the People,” strategy focused on helping job seekers. Later in this chapter you'll learn how Monster is reigniting their true noble purpose.
The idea that a leader's primary purpose is to drive earnings is pervasive in many, if not most, organizations.
Unfortunately, It's Also Wrong
Compare the typical “let's rally around earnings” message with the words of these leaders:
● Ryan Holmes, Founder and CEO of Hootsuite, the social media management system that has exploded globally, kicks off their Town Halls saying, “We're more than a social media company. We empower our clients to turn their messages into meaningful relationships.”
● Steve McHale, the CEO of Explorys, the health care intelligence cloud company that has built one of the largest clinical data sets in the world, says, “We unlock the power of big data to improve healthcare for everyone.”
● Bruce Poon Tip, founder of Toronto-based G Adventures, who has become the global leader in adventure travel, says, “Our business model transcends our products. We're not just a travel company, We help people discover more passion, purpose, and happiness.”
As you read the statements these leaders use to describe their businesses, ask yourself, Who would you rather work for? A boss who tells you that your sole purpose is to deliver earnings for shareholders? Or a boss who tells you that your true and noble purpose is to make a difference in the lives of your customers?
These three leaders have absolute clarity about how they make a difference in the lives of their customers, as does every member of their organizations. The results speak for themselves:
● Hootsuite has grown 56,000 percent over the past five years. That is not a typo – fifty-six thousand percent. Even after their initial explosion, in the last 24 months they have more than doubled their business.
● Explorys has experienced unprecedented growth year-over-year. The year after they launched their purpose with their team, they grew revenue by 53 %. They now work with 26 major healthcare networks, delivering care to 50 million unique patients at 360 hospitals.
● Bruce Poon Tip and his team of “Global Purpose Specialists” (the name adopted by his sales force) have grown revenue by 25 percent every year for the 25 years they've been in business. They're now a $400 million company. Since implementing Noble Purpose in 2013, they've accelerated their growth rate to 35 percent.
These leaders are early adopters. They're also our clients. You'll read more about how these three leaders and others have driven exponential growth, leveraging the power of purpose. For now, think about the way these leaders talk about their businesses.
You can tell a money story, or you can tell a meaning story. Think about your own business. Is the driving question, How can