Why Monster.com Is Failing And Others Will Follow

by Lisa Earle McLeod

In 2006 Monster.com was one of the 20 most visited websites in the world. By January of 2011, Monster was rated the worst stock of the year. Earlier this year, 2014, Monster launched a new strategy and global rebrand in an attempt to right their ship. It didn’t work. Earlier this week, Monster CEO Sal Iannuzzi resigned, and as of this writing Monster shares are down 43% this year.

What went wrong?

A billion dollar organization once heralded as the industry innovator is on the verge of becoming irrelevant.

Industry analysts suggest that Monster’s demise is due to their inability to compete with newer, more nimble, more connected technologies like LinkedIn. The industry analysts are wrong. Lack of competitive differentiation and old technology are the symptoms of Monster’s decline. They’re not the cause.

The real reason for Monster’s freefall into oblivion is that they lost their Noble Purpose.

Monster was originally founded on the belief that helping people find jobs was a Noble endeavor. Their iconic “When I Grow Up” Super Bowl ad featuring kids saying, “When I grow up I want to be a yes man” or “I want to claw my way into middle management” made it clear, you deserve a better job, and Monster wants to help you find it. Founder Jeff Taylor’s mantra was, “It’s half about a better job, and half about a better life.”

Flash forward, recently departed CEO Iannuzzi’s leadership narrative was never about helping customers having a better life. He focused exclusively on earnings. During a Monster town hall earlier this year, he didn’t mention job seekers once. Instead, he told his entire organization that the goal of their new strategy was to increase the stock price. Not help customers, not improve the industry, just increase the earnings.

Like all CEO’s, Iannuzzi was under pressure to drive the numbers. He might not be a bad guy. Yet he made a classic, very common, leadership error. He focused on profit instead of purpose. And in doing so, he eroded the very thing that had made his company great. Their business was no longer about making people’s lives better; it was about making money, end of story.

Monster serves as a cautionary tale. The same scenario could have just as easily happened elsewhere. In fact, it has. Companies like Blackberry, Blockbuster, Sears, and Toys ‘R Us, who were once giants in their spaces, took gut-wrenching tumbles when they lost their sense of purpose. It wasn’t a loss of earnings that caused the loss of purpose; it was a loss of purpose that caused earnings to decline. In each of these organizations the leaders were so intent on making money from their existing business models, that they lost sight of the true purpose of their business, to improve life for their customers. With no lens on the customer’s world, they were out innovated, outsold, and out maneuvered. They became dinosaurs, because they focused on profit instead of purpose.

Compare Iannuzzi’s earnings message with these leaders, who are our clients:

Ryan Holmes, the founder of Hootsuite, the social media firm exploding globally, kicks off his town halls saying, “We’re more than a social media company. We empower our clients to turn their messages into meaningful relationships.”
Rick Russell, Chief Commercial officer for Sunovion Pharmaceuticals, drove double-digit growth rallying employees around the Noble Purpose, “We bring health and hope into the lives of patients.”
Bruce Poon Tip, the founder of Toronto based G Adventures, who has become the leader in adventure travel says they owe much of their consistent thirtyfive percent plus growth to the clarity of their Noble Purpose, “We help people discover more passion, purpose, and happiness.”
As you read these statements, ask yourself, who would you rather work for? A boss who tells you that your purpose is to deliver earnings to shareholders? Or a boss who tells you that your true and noble purpose is to make a difference in the lives of your customers?

Monster and the other failed, and failing, organizations are not unique. The same thing happens in conference and boardrooms every single day. The narrative of profit, earnings and bonuses that was supposed to improve employee performance has had the opposite effect. It stripped the joy and meaning from work in ways that have a chilling effect on company performance, customer service, and employee morale.

The idea that a leader’s primary purpose is to drive earnings is pervasive in many, if not most, organizations.

Unfortunately, it’s also wrong.