The financial results which Twitter just released for its most recent quarter were characterized by weak user growth, weak revenue and a disappointing outlook. This caused an immediate -10% decline in the company’s stock price as investors continued to lose faith in the company’s ability to turn it around. For perspective, while Twitter’s stock price ranged between $35 and $55 during the period of January 2014 to July of 2015, in the most recent six months it has been in the $15-$20 range.
What all of this suggests is that the recent initiatives by Twitter focused on video streaming and growing its current user base are not enough to draw advertisers on to its platform as they migrate toward the more established social media channels, such as Facebook and Instagram. While Twitter remains a viable digital content and media outlet, its competitive position is eroding as Facebook ramps up on mobile messenger.
Very recently there was further bad news for Twitter as it announced its communications chief was leaving the company. The concern over this exit was heightened by the fact that it follows the very recent exit of the head of corporate, revenue, and policy communications. As noted by a financial analyst, these exits are very concerning in that “any signs of executives leaving in droves likely means there is chaos and disorder at the top of an organization.”
While Twitter is trying to strengthen its current offerings, the real issue is what it is doing that will generate significantly impact versus what the company has been doing. It does not appear that this is being addressed and instead the entire company is super busy doing a bunch of things related to the same old efforts of trying to generate more advertising and grow the user base. While that is admirable, it’s causing the company to continue to have weak operating results as its much larger competition clearly outpaces them on these fronts.
So…what are the lessons here?
1.) What is the Big Idea? – The key responsibility of any leader is to not only manage the current business, but most importantly, find the one or two big things that can get the company out in front of competition? In the case of Twitter, it has the same problem as Yahoo has had for the past 5+ years; namely, what is my next big idea that will change the game?
2.) Organize to Achieve Success – Once the leader isolates those one or two big ideas, it is key to assign top talent full time to shake out their potential. The people put in charge of these efforts should have the authority to make decisions and execute with speed and efficiency.
It is amazing how satisfied people can become when they are busy doing a bunch of things similar to what they have been doing in the past. It blocks the entire organization from realizing they are mediocre and they need to launch some very new and very significant new ideas.