It’s a $2-billion bet by pharmacy giant CVS that running ahead of the pack will ultimately be good for the bottom line.
This month, CVS announced it would become the first major pharmacy chain in the United States to ban tobacco products. At a time when fewer and fewer people are smoking, you might not think that’s newsworthy. But consider that this decision, effective in October, will mean $2 billion in lost sales for its 7,600 stores across the U.S.
The strategy behind the move is fairly simple. With the Affordable Care Act formally in place, and tens of millions of additional Americans now having health insurance, CVS wants to be a primary provider of health care. Like Wal-Mart and other big retailers, CVS is opening up mini clinics in its stores to provide basic care and health care advice.
Clearly, CVS realized that selling a toxic product like tobacco just doesn’t align with its health-conscious corporate profile and its core purpose of helping people on their path to better health.
The stakes are very high with this decision. CVS is now wagering that their new activity around health care services will offset the loss in tobacco sales. Although many industry pundits have applauded the move, it’s not completely without risk.
Many leaders cower from making the tough decisions even if it’s the right thing to do. Let’s face it, we live in a world where doing the right thing is often ignored in the name of profit.
As CVS demonstrated, tough decisions can mean loss of revenue in the short term. Many retail analysts believe, however, that CVS will benefit in the long run by confronting this issue now.
More importantly, if you have the strength to do the right thing, you need to embrace risk and accept the possibility that your decisions may not work out.
Think of your own company or industry. What key issue is calling out for you to step up and do the right thing for your customers, your shareholders, and for society?
The National Football League is facing a Gut Check moment right now. Top college football prospect Michael Sam showed that he had the guts to do the right thing by disclosing, prior to the NFL draft, that he is gay.
In a league where there are currently no openly gay players, that is a pretty courageous stand. The question now is, where will Sam be drafted in the NFL’s May entry draft? Many football pundits have predicted his stock will drop because of his admission.
If that’s true, it shows that the NFL is not prepared to take a stand and do the right thing. That is not great leadership.
Great leaders have always done the right thing, even when it meant going it alone and breaking free of the pack. That’s real leadership in action.
The bold move by CVS brings up this week’s Gut Check question: do you have the guts to do the right thing even when you don’t have to?
About the Author
Vince Molinaro is the Global Managing Director of Strategic Solutions at Lee Hecht Harrison. He is also the author of The Leadership Contract – a New York Times and USA Today bestseller. Vince has spent more than 20 years as an adviser to boards and senior executives looking to improve leadership in their organizations.Follow on Twitter More Content by Vince Molinaro