CVS kicked their cigarette habit in October of 2014. They were generating $2 billion in revenue annually selling tobacco. But they quit, cold turkey. They gave up $2 billion a year because selling tobacco was out of alignment with their true purpose. Their announcement read:
Ending the sale of cigarettes and tobacco products at CVS/pharmacy is simply the right thing to do for the good of our customers and our company. The sale of tobacco products is inconsistent with our purpose helping people on their path to better health.
In conjunction with the initiative CVS renamed themselves CVS Health and launched Lets Quit Together, a comprehensive personalized smoking cessation program to help their customers kick the habit as well. CVS President and CEO Larry Merlo said, In quitting tobacco, we announced our plans to help the 18 percent of Americans who smoke. We know that 7 in 10 smokers want to quit, so weve built a comprehensive national smoking cessation program that will help them do so.
So how is CVS faring after giving up $2 billion in revenue?
Pretty well. Theyve made headlines in every newspaper in the country. Theyre being lauded by medical professionals and business journals alike because their forward-thinking strategy will actually help them make more money. Industry analysts believe that CVS will quickly replace their tobacco income with higher profit smoking cessation and clinic services.
People often ask me: How do you balance Noble Purpose with the need to make a profit?
My answer is, you dont balance Noble Purpose against profits. Successful organizations make more profits because their Noble Purpose drives their business decisions.
I doubt that CVS knew they were going to launch a profitable smoking cessation campaign when their leadership team starting discussing giving up cigarettes. Instead I imagine the discussion likely focused on the disconnect between CVSs purpose, Helping people on their path to better health and then displaying nicotine death sticks at the register.
CVS had to decide what to stop doing before they could figure out what to start doing. When a leadership team identifies where they are out of alignment with their purpose, and has the courage to walk away from potential profits, then the creative wheels begin to spin. In CVSs case they came up with the Lets Quit Together campaign.
CVS had the courage to go first. They will reap the financial benefits of making their Noble Purpose the nexus of their business. And all the smokers who want to quit are already shopping at CVS.
If others chains follow, they wont get the PR, or revenue boost that CVS is getting. Walgreens announced they will provide smoking cessation programs, but still sell tobacco. Who do you perceive as the stronger brand? The company that went first and fully supported their purpose? Or an organization that copied them, but didnt have the guts to do it all the way?
When Noble Purpose guides your business, you make more money. When Noble Purpose guides your life, you become happier and more successful.
But heres the rub, theres a huge advantage to going first. You can always do the right thing, but when you go first, you have more firepower.
The organizations that challenge long-standing business models on behalf of improving life for the customers not only generate more good will, they have a strategic advantage because they create the new marketplace.
CVS was able to communicate the moral fiber of their company in a sweeping policy change that will improve the lives of their customers and ultimately, make their organization more money.
It takes guts to go first, but it pays off.