In today’s episode, host John Laurito talks about the concept of short-sightedness and how it greatly affects you as a leader in business or your personal life. John shares that, as a leader, you should always envision the future when making a decision, no matter how big or small. Your decision will affect the life of your organization and the lives of the people within it.
[0:58] Here’s to the riddle champions
[2:00] Today’s riddle is…
[2:33] What is short-sightedness?
[6:53] 10-10-10 Rule
[8:12] Cost of Inaction
[10:00] The challenge and takeaway
John Over the last two decades, I’ve been on an insatiable quest to learn everything I can about leadership. What makes the best leaders so good? After running companies small and large over the last 20 years, today I speak on stages all across the world to audiences who are interested in that same question. My name is John Laurito. I’m your host, and I invite you to join me on this journey as we explore this very topic and what makes the best leader so good.
John Welcome to tomorrow’s leader. He now has a radio on. Hope your week is off to a great start or whenever you’re listening to this, watching this. Maybe it’s the end of the week and hopefully, your week is going great. I’m just coming back from vacation. What a phenomenal week. I’m feeling rested, and relaxed now off to another week of travel, this business travel. But it will be another great week. Okay. Let me jump into a couple of things. I’ve got a lot to cover today. First of all, I want to give some props to our most recent Riddle. Champions Riddle Solvers. And if you remember one of the riddles that I had, I’ll read this again. How can the number four on behalf of five? Okay. So again, how can the number for behalf of five? I only got one guess on this.
John Usually, I get many, many, many guesses, so that tells me it’s hard. I thought it was hard and this individual guessed it and it was pretty quick. The day or date day after the episode was released. End the Props goes to Tatum Secrest, who is a high school senior. Super smart high school senior, obviously. And congrats. So Tatum gets a signed copy of my book on the Way to You and again that your name is world-recognized in 91 different countries.
John So great job, Tatum. Okay. Today’s riddle is really simple. Here we go. Ready for it? Okay, take note. Here comes. The more there is, the less you see, the more there is, the less you see. Hmm. Okay. Again, if you know the answer. Text me. Shoot me an email. Whatever you want. 860573723. Oh, easy text and let me know who you are and your answer. I’ll let you know if you’re right or wrong or whatever. So. Okay. So tonight, today’s topic is about the concept of short-sightedness. And I find in I find oftentimes not just leaders, I find people in general and everybody is a leader. I’m not talking about just formal leaders. I’m talking about people, in general, making long-term decisions based on short-term stuff or they’re not looking at the right stuff to ultimately make the right decision. And I’ll give you an example. This goes back to a big example, a tiny little company called Blockbuster at the time, no joke was an enormous, enormous company.
John For those of you who’ve been around and remember Blockbuster, it was by far not even close, to the largest video chain distributor. You rent videos to watch. Everybody went I mean, it was huge. And at that time, the streaming had just started. It was not perfected. There were a lot of problems with it. But streaming had just started. And Netflix, which we all know was starting to experiment with a subscription model. If you don’t remember, we weren’t around at the time when Netflix started. It basically was a subscription model. You paid an amount per month and you basically you rented a CD, they would mail, ah, the DVD to you in the mail. It would take three or four days or whatever.
John They would give you a return envelope, you’d watch the movie, and you’d return to your convenience. There wasn’t a late charge. So they totally, you know, kind of changed the whole model and obviously today have an entirely different model. But that was what they were doing. They were experimenting with it and it was working. It was not that it wasn’t working. They were not testing it. It was proven and it was working. The CEO of Blockbuster at that time had a very significant interest in doing something like that. He went to the board and the board said no. The reason that the board said no. Give you a second to see if you can guess. The reason the board said no was because they had 16% of their revenues coming from late fees. Now, to put that in perspective, 16% of their revenue. It was $800 million coming from late fees. Now, that’s a lot of money. But that’s 16% of their revenue.
John They were earning an enormous amount of money. Now, think about this. They were earning that money by penalizing, penalizing their loyal customers. So think about a company that makes money by penalizing its loyal customers. That’s not a business model that typically does very well. So they said, no, they did not go for this subscription model. Now, what’s interesting is they were afraid to give up that 16%. They were afraid to lose that. And in fact, instead, what they did was they lost the whole company. Being afraid to lose that 16%. And it wasn’t even that they were taking a risk. It wasn’t taking a chance on something that was unproven. The subscription model was proven. It was working. They said no because they didn’t want to take that short-term step back and lose that 16% of their revenue.
John And because of that, they lost their company. So think about this. I see people do this all the time. I see leaders, I see companies. And I’m interested in your examples where you see short-sightedness. I see I work a lot in financial services. I see advisors. Now, this goes for any kind of practitioner out there or business where they are hesitant to hire a staff person, an assistant. They’re caught down doing this $20 an hour work when they’re trying to be at the upper end of the time value pyramid. And they can’t get out of their own way. Yet they’re afraid or unwilling to make an investment, which will mean a short term, very short term sometimes, but a short term step back and their net income for that long term growth and I’ve never talked to anybody and I truly mean this that said that hiring an assistant, somebody who’s at a really high level of growth in their business, that that was not one of if not the best decisions or turning points in the growth of their career.
John I’m talking about sole practitioners here, but it goes for business as well. You’re hiring infrastructure and staff. You need to do that. And I always think about a couple of things. One is, is I think about and I’ve talked about this in prior episodes, use the ten, ten, ten rule. So in other words, sometimes we get caught up in too much of this short term. Yeah. You know, I don’t want to, you know, the drawback or negative of the pain of investing money when in reality we’re not thinking long term. A simple rule. Ten, ten, ten. How will I feel and what will be the reward? Reward on this decision? After 10 minutes of making the decision after ten months after making the decision and ten years after making the decision.
John So let’s just put it in perspective on a scale of, you know, negative ten to positive ten, if my decision after I make it in 10 minutes is positive five because I feel good about it, haven’t gotten any financial reward ten months later is minus five because I’m now out the money for this staff person. I’ll use as an example an assistant and ten years later it’s positive ten, positive 15, positive 20. Well, then you’ve got to look and say, okay, am I, am I in this business just for the short term and trying to just make short term money? Or am I really trying to grow a long-term, thriving, healthy business? And if the answer is the latter, which it typically is, then make the investment right. The other way to look at this, I got this from a good friend of mine, Michael Altshuler, who’s a great keynote speaker, by the way, and he talks about the CEO, the cost of inaction. Cost of inaction.
John What is the cost of inaction? And what does that look like? So if you didn’t make this investment, what happens in Blockbuster’s case? Okay, there was a significant cost. They lost their whole business. Now, if you remember what they did, instead of adopting the subscription model, they knew that there was so much out last year about the late fees and there was so much negativity and resentment then customers just clients, customers literally starting to leave and move to Netflix model by the droves. They changed it and they did advertising false advertising that there was the end of late fees. Go back to one of my prior episodes and you can hear the whole story about that. But they did something unethical in order to combat what was actually a very winning strategy and would have made a lot more sense.
John Obviously, to do bottom line is bad decision making. Envision when you make a decision, envision what the outcome is, and just think about what is ultimate does this look like a year or two, three, four, or five years down the road? Okay, what are the possible costs of doing this? What are the rewards? And then flip it to the higher costs and rewards of not doing it. The cost of inaction. I love that. I think it’s a great way. But think about it. There’s so much, so many times long-term decisions are made based on short-term stuff. So my challenge to you in this short episode today is what in your life is going on that you are really just focused on in the short term? What are you doing in your world? Maybe it’s personal, maybe it’s work-related, maybe it’s a relationship.
John Whatever it is that you’re so focused on the short term that you totally lose sight or partially lose sight of what you’re trying to do for the long term. And what you’re doing short-term does not put you on track. What you’re trying to do long-term. Just think about that. That’s my biggest takeaway to give to you today. Again, get the wheels turning on that. What in your life are you so focused on the short term that you’re losing sight, you’re losing ground, you losing momentum where you’re trying to go for the long term? If I can help on that and I can help you brainstorm some stuff and figure some stuff out, reach out to me. I’m more than happy to do that. But here’s my quick ten-minute episode for you today, delivered to you in a nice, perfect little package for you.
John Whether you’re listening, watching it, whatever. I don’t know what it was like, but anyways, you know what I’m talking about. Go do it. Take some action on it as always. Like share, subscribe, go down below, give a five-star review and we’ll see you next time. Thanks. Bye.
John Thanks for joining us on today’s episode of Tomorrow’s Leader. For suggestions or inquiries about having me at your next event or personal coaching, reach me at John@johnlaurito.com. Thanks, lead on!