When someone knocks back a shot of mezcal, how its essence is harvested might be the furthest thing from that person’s mind. I read the lead article in the latest issue of Distilled magazine and now have second thoughts about ordering a drink that contains Oaxaca’s (Mexico’s) ancient spirit. According to the writer, the allure of profit is too great for the mezcaleros (those who farm the agave plant from which the nectar is harvested) to resist. So much so that they harvest it from every single plant in view which prevents those plants from ever growing to a state at which they can produce the flowers they need to reproduce. We’ve seen this overharvesting story throughout time, in virtually every region of the world – the number of plants diminish and the future of an industry turns down.
Enlightened individuals in Oaxaca are trying to stem the tide by teaching better sustainability practices but the challenge is daunting since it means that, in the process, sacrifices must be made by the farmers, sacrifices that mean lowering their already very low incomes. It’s a thorny problem, but there is hope.
It reminded me of how in our industry of SaaS we too are guilty of embracing a short-term view over the long. Of being willing to sacrifice the greater potential of long-term strength of our companies at the altar of short-term profits. Let’s call that what it is. It’s also over-harvesting because as a general rule we still place far too much emphasis on sales and marketing and not enough on services. McKinsey raises the red flag in a smart article called Reimagining Software Services for the Cloud and the Digital World:
“For some companies, the professional-services unit was viewed as a cost center or, at most, a low-margin revenue generator. Many professional-services businesses therefore haven’t invested in the new tools and capabilities they need to propel their operations. That’s a mistake. Software vendors must strengthen their professional-services offerings to meet their customers’ new demands and to maintain or increase their market share.”
Over-investing in selling products and under-investing in what it takes to help customers succeed is only going to satisfy the needs of short-term shareholders who are only interested in vanity metrics like new subscribers and number of users, and not the more critical metrics like net churn and customer retention, which are signals of long-term health.
Instead of allowing ourselves to be seduced by the narcotic of quick wins, let’s focus on building sustainable businesses that:
Partner more effectively with customers so that they engage in a bigger way; engagement is a key enabler of their success and should be something that is stimulated
Nurture a community of engagement that fosters sharing and mutual growth through your solutions
Sacrifice some short-term profits (leaders need to lead on this front and do a much better job of explaining why this is good in the long run) and retool our organizations to focus on what it takes to deliver the kind of solution experience our customers deserve
Leaders have to look at the bigger picture to provide a stronger solution. They need the best data possible to make the right calls. This means not only procuring good and useful data but managing it well and deriving the right insights. Find out how to “Go Further with Data Management.”
