The Race to the Bottom

This week, Tiger Wood’s apology was all over the news. From Entertainment Tonight to CNN and New York Times to USA Today, his face was on the television and Internet wherever you looked.
It’s an interesting dilemma for the media. On the one hand, this story is like a train wreck – it’s horrible yet you can’t look away; you want to know what’s going to happen. On the other hand, the information is not exactly substantial journalism.

The problem is that once each media outlet ran the story, they were committed. Whether or not this fit with their mission of providing information to the world, they were a part of the downward spiral. Most outlets ran the story based on what type of information the masses would flock towards. If one company didn’t publicize the story, they risked losing readers to the competition. On the other hand, if they did report the story, they ran the risk of alienating the customers who thought there should be more substance in the content.

Consider what happens to businesses that start the price bidding game. One tire company lowers their price for tires from $50.00 per tire to $49.25 to lure in an additional number of customers. In response, the competitor across the street lowers their tires to $46.00. Let’s say Tire Company #1 lured 15% of Company #2’s customers solely based on the price change. They’re going to lose the new customers unless they either match or lower price again. On and on the price game goes until it drives both into the ground, or until one of the companies provides a better value offer to customers (say, $55.00 tires with a 6 month warranty).

Overall, it’s a vicious downward spiral that will not be broken until someone steps forward to break it with quality information, a quality product or something else.

It’s easy to get caught up in the hype, the short-term activity that will vary your market position daily. Whether it’s the media sensation, whether you’re competing on price, swaying your ethics to make a decision for today, or changing your corporate values to satisfy a customer request, it’s a race to the bottom. If you do not have a firm understanding of your purpose for being in business, a long term vision for where you want to go, and a clear vision on what steps and behaviors you need to take in order to get you where you want to go, you can easily get caught up in the frenzy of doing what everyone else does, just to stay ahead.

Be careful, because hasty decisions towards perceived incremental positive gain can result in significant, unwanted changes for the future.

Filed under: Competition, Steadfastness, Vision