Perhaps the immediate workplace renovations should have been a hint.
When Lex Fenwick took over as chief executive of Dow Jones in 2012, he began by tearing out offices and instituting an open-floor plan. He also installed a crystal chandelier so ostentatious that it spawned its own Twitter parody account, as John McDuling reports in Quartz. With all that focus on motion, all too little went into action—or at least the right action. And now Fenwick is out of a job.
Fenwick’s strategy for Dow Jones, the News Corp. unit that publishes The Wall Street Journal and offers other financial-information services, consisted of killing off its old à-la-carte subscription products and replacing them with a new fixed one, dubbed DJX. The problem is, customers didn’t like the approach.
“Mr. Fenwick’s plan had been to unify a number of Dow Jones products—offering a fast-moving news wire along with other financial databases—and charge customers one price for them all,” the New York Times explained. “Numerous customers blanched at the price increases, and many complained that the product was inferior to the data terminals offered by Bloomberg and Thomson Reuters.”
To make matters worse, customers were offered the product on a take-it-or-leave-it basis, according to the Times. And so they left it, leading to an $11 million decrease in subscribers. It didn’t help that a dozen Dow Jones executives also left during Fenwick’s tenure—something attributed, at least in part, to the boss’s brash style.
So, how does a high-flying chief executive manage to overlook some of Peter Drucker’s most basic questions? Chief among them: Who is our customer? And what does the customer value?
Actually, Drucker made a point of formulating such questions precisely because so many executives do overlook them. In particular, they fail to ask what customers value because “managers are quite sure that they know the answer.”
What’s more, Drucker added, managers tend to get bewitched by the bells and whistles of their products, forgetting how dispensable and peripheral these can be to those outside the organization.
“The executives of a company always tend to believe that the customer spends hours discussing their products,” Drucker noted. “But how many housewives, for instance, ever talk to each other about the whiteness of their laundry? If there is something badly wrong with one brand of detergent they switch to another.”
Where have you seen a company fail to adequately consider what the customer values?