Image: (From left) Paul Singer, founder and co-CEO, Elliott Management; Jack Dorsey, co-founder and CEO, Twitter
Running a successful business means keeping customers, workers and investors all happy at the same time. Twitter has been trying very hard to keep everyone happy for a long time. Activist investor Elliott Management is now part of the picture, however, and that means Twitter and CEO Jack Dorsey are in for the fight of their lives.
It’s always much easier if you can keep everyone happy and on the same page. Herb Kelleher, co-founder and former CEO of Southwest Airlines, said it best. He said first, take great care of your people. Then, they will take great care of your customers. Then the investor will be happy.
And it has to be done in that order. This method should be learned by everyone and practiced at every company. Period.
CEOs must focus on their people first, then the customers, then the investors
What was interesting is the investor is last in this equation. While investors are the owners of the company, and while their satisfaction is the ultimate goal, and while many companies put them first, it is vital that the CEO understand all the important constituencies. The big picture and in the right order, and not just the needs of only one side.
When a company focuses on the wrong party first, it will suffer long-term. If the company focuses on the investor first, there may be a short-term jump in stock price, but in the long term, the company will never perform at its best.
While I love Twitter, its problem is it has been battling the bad guys for far too long. It’s a constant struggle and has been for years.
One of the biggest problems is that, mixed in with all the everyday users, bad guys worldwide are always trying to cheat and steal from all the good guys.
To combat this, Twitter has continually implemented new rules and regulations to fight back. While that may sound helpful, the other side of the coin is that it also makes it more difficult for regular users to build name recognition and their follower list.
Can Elliott Management improve Twitter?
Now, Paul Singer and Elliott Management step in and rock the boat, trying to improve Twitter’s investment performance. While I can understand what they want, it all depends on how they want to get there.
Will they focus on building and growing the business, or will they damage the company long-term trying to achieve near-term profitability?
To tell you the truth, I think Elliott Management has bitten off more than they can chew with Twitter. This is a company that started the social media space along with a few others like LinkedIn and Facebook a decade ago.
Both Jack Dorsey and his predecessor, Dick Costolo, have worked very hard to solve this growing problem.
Sure, there are all sorts of successful, top-line users like President Donald Trump and Kim Kardashian, but Twitter’s average users find it very difficult to rapidly grow their user base and influence.
Could Elliott Management help Twitter?
The fear I have is that any changes Elliott Management proposes may not be in the long-term, best interest of Twitter. So, the question is this; is Elliott Management interested in short-term or long-term success at Twitter?
They should make their intentions clear. This is an important point.
Jack Dorsey is interested in the long-term viability and growth and strength of Twitter. If Elliott Management is on the same page, perhaps getting together can work. However, if they are only interested in short-term stock performance, then Dorsey needs to be aware of this and protect his company.
Perhaps Elliott Management has new ideas that could help Twitter. Perhaps. As long as they are in this for the long-term best interest of the company, not just the short-term interest of the investor, this could have a positive impact.
I like Jack Dorsey and Twitter, but they must prepare for Elliott Management
What will happen next? Change can be difficult. Especially when change comes as an attack. And that is what this looks like at first glance.
While we all love Twitter and want the company to succeed, there are problems that need to be solved without harming the users’ ability to get value from the site.
Perhaps this upcoming battle between Elliott Management and Twitter will result in good things.
But Jack Dorsey must be smart and move carefully. I like Dorsey. I like Twitter. I want them to succeed, long-term. For that to happen, however, they need to fix the parts that don’t work well. They need to grease the squeaky parts and have the entire organization run like a well-oiled machine.
If that can be the end result, then mixing it up with Elliott Management could be a good thing.
Jack Dorsey needs to be on his best game, and he needs to understand what is happening at all times. He needs to know this is war and he needs to be prepared.
He needs to be sure that the interests of the company and investors, including Elliott Management, and employees are as aligned as possible.
Dorsey needs to be sure any changes he makes in Twitter going forward, are in the best, long-term interests of the company, with the greatest potential for positive impact.
Remember, first focus on your own people and keep them happy. Then they will focus on making the customers happy. Only then will the investors be happy. And it must go in this order!
Jeff Kagan is an Equities News columnist. Kagan is an Industry Analyst, Key Opinion Leader and Influencer focused on Wireless, Telecom, Pay TV, Cloud, AI, IoT, Health Tech, Healthcare, Automotive and Self-Driving cars. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and on LinkedIn at linkedin.com/in/jeff-kagan.
Equities Columnist: Jeff Kagan
Source: Equities News