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Tough Call - The Shiny Penny Syndrome

Back when Joe Hasty launched Hometown Building Supply, everyone said he was crazy. After all, existing supplies seemed to have all the niches covered. Plus, they’d all been around for as long as anyone could remember. Still, Joe was determined, and he invested all of his money and energy into establishing his startup business.

Having worked for Joe for the past seven years, you suspect that everyone telling him his idea wouldn’t work made him that much more determined to make it happen. Joe likes to say, “Those who say it can’t be done need to get out of the way of others doing it.”

Sure enough, Hometown Building Supply has carved out a profitable niche, serving custom homebuilders and high-end remodelers with a solid blend of quality products and top-shelf service. Even in this down market, Hometown Building Supply’s sales are keeping pace with the prior year. It hasn’t been easy-but working for Joe, you and your colleagues have successfully leveraged your customer relationships to uncover new business and to get additional sales from existing builder customers. And keeping these customers happy requires a single-minded focus on meeting their needs.

But now Joe has other ideas, too. Which is no big surprise. Over the years, just when everything has been working well, Joe tends to become fixated on something that he’s convinced will be the next big thing. You and your fellow salespeople have a name for Joe’s tendency to get distracted by new opportunities: the Shiny Penny Syndrome. Unfortunately, once he locks onto a concept, he absolutely will not let go. You call this the Pit Bull Syndrome.

His latest brainstorm is to get into building ultra-high-end homes. Here’s his plan: He’ll buy one or two executive home sites, and hire a well-known architect to design truly spectacular homes. The completed homes will be a showcase for the materials sold at Hometown Building Supply, and will be sold at cost. That way, he figures, he won’t be stuck with unsold homes, and he’ll be able to generate buzz about his products.

As with most of Joe’s ideas, this one is either brilliant or foolish. However considering the weakness of the housing market and the fact that it is taking tremendous work just to maintain your current level of sales, you question the wisdom of diverting staff from Hometown Building Supply’s core business in order to venture into unknown territory. Also, you doubt that your high-end builder customers will welcome competition from their supplier.

You’re concerned that the “shiny penny” is blinding your boss into making a very bad decision, but you don’t know the wisdom of sharing your concerns. After all, this wouldn’t be the first time he was told “it can’t be done.”

What would you do?

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