CVS Lost $2 Billion With One Choice. Here’s Why They Were Right
As people face significant stress imposed by COVID-19 and an increased amount of isolation due to social distancing measures, everybody has had more opportunity to reflect recently. While some are looking forward at how they will adapt and improve themselves when the virus passes, others are regretfully considering decisions they did or didn’t make.
When making difficult decisions, especially ones with long-term ramifications on your life or career, it’s crucial to have a decision-making rubric supported by non-negotiable core values. Values-based decisions always seem to pay off in the long run.
CVS provides a high-stakes example of values-based decision-making in practice. In 2014, as CVS was rebranding as a health-services company, CVS Health, the company decided to stop selling cigarettes. CVS knew it couldn’t present healthy living as a key value proposition while selling a significantly unhealthy product. As their CEO said at the time, “the sale of tobacco products is inconsistent with our purpose.”
The company lost $2 billion in revenue by ending cigarette sales and angered some shareholders. But today, as the COVID-19 crisis gravely illustrates the risks of smoking, the short-term revenue hit has become a brilliant long-term decision.
If you’re weighing a big decision, whether it’s leaving a frustrating job, selling your business or investing in something long-term for yourself or your family, start by consulting your values. Here’s why.
The benefit will become clear
CVS lost substantial revenue by dropping cigarettes, but they more than compensated for that loss by improving their relationships with customers, employees and health-industry partners who appreciated their dedication to healthcare. It wasn’t painless, but it was critical for their new direction.
When you are being true to your values—both personal values and organizational values—you make better decisions that stand the test of time. Often when you do the right thing, and do it early, it doesn’t always seem savvy or effective in the moment. But today, CVS is applauded for their risky move, even prompting some of their customers to quit smoking.
At Acceleration Partners, we did this by becoming one of the first agencies to question many of the conflicts of interest in our industry. We made the choice to distance ourselves profitable partners with questionable tactics. Because we were early on these issues, it allowed us to establish ourselves as thought-leaders our field.
Making a values-based business decision shows customers, partners and employees what your organization stands for—and will compel people who respect those values to want to work with you.
Don’t ignore the little warnings
We often overlook the small signs of what will become larger problems. The vendor that’s always a day late and a dollar short. The friend who shows a consistent lack of judgment. The colleague who makes inappropriate comments. Maybe you’ve considered cutting ties, but assumed you’d either get used to the irritation or that things would improve.
Often, the opposite is true—when we overlook these values mismatches, they can grow into seriously harmful problems faster than you’d ever expect, especially during a crisis like we have today. That vendor lets you down at exactly the wrong time and causes irreparable harm to your business. That friend with the poor judgement drives your kid home after having a few drinks. These worst-case scenarios can be avoided by making a values-driven decision early.
It’s nearly impossible to act too early on values. What sets the most successful people and businesses apart is that they almost never act too late.
It’s not supposed to be easy
Leaning on your core values doesn’t make difficult decisions easier in the moment. CVS looks brilliant in their decision now, but they likely agonized over the prospect of losing considerable revenue when they stopped selling cigarettes.
As with every hard choice you’ve ever had to make, personally and professionally, you’ll certainly feel the fear of choosing the wrong option and the anxiety of proceeding down a new path.
But the alternative is much worse. Imagine staying in a job you hate, with uninspiring leadership, only to be forced to face the COVID-19 crisis with that organization and leader. Rather than weathering the storm with the right team around you, you’ll probably go down with a sinking ship and have to start over.
It’s because these types of decisions are so hard that it’s vital to consult your core values when weighing your options. Viewing your choice through the lens of your non-negotiable principles will always lead to better decisions.
Standing up for your values isn’t easy, but it’s rewarding in the long-term. Not only will you attract others who share your core principles, personally and professionally, but you’ll also build a more successful business—and a more fulfilling life.
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