Meta Needs A Plan To Win ASAP
Reading the transcript from Meta’s February 2, 2022 Earnings Call, one can understand why analysts shivered with negativity and why investors shed the enterprise’s stock. The press describes the Earnings Call as a “gloomy” prediction for the upcoming year. Meta indicated less profit, more, stronger, creative competition, Apple’s privacy changes, a slowdown in Meta’s social media platforms and a lot of costly investment behind metaverse R&D. Plus, as Barron’s, Financial Times and Kara Swisher in The New York Times point out, Meta can no longer buy creativity. The enterprise is already perceived as too big for regulators. As for copying rivals, it turns out that the competition has raised the bar big-time. Kara Swisher noted that creativity for Meta, “…has not always been its strong suit….”
However, a parsing of the transcript reveals something much scarier. This latest Earnings Call was a hazy, undisciplined report on the ways in which Meta will generate enduring profitable growth.
There appears to be to be no clear articulation of what actually is the vision for Meta. All of the “priorities” stated by Mr. Zuckerberg are actions seeking an overarching North Star. Sure, Mr. Zuckerberg has identified an “immersive” Internet as the end goal. But, what exactly Meta’s role in that world is unstated and probably not well understood. Worse yet, according to Mr. Zuckerberg, the pathway to his immersive vision is “undefined”.
To be successful, it is not enough to say what the world is that you see. You must state 1) what will need to happen in order to make this world happen and 2) what your brand will need to do to win in that world.
Also, based on the executive comments in the Earnings Call, there are no SMART objectives (specific, measurable, aspirational yet achievable, related to overall business growth with time specifications). The transcript shows that the Meta executives used fuzzy time frames 19 times. These included the phrase “over time” (7 times), phrases such as “in the future”, “over the long term”, “years ahead”, foreseeable future” and “long term” (12 times). Of course, calls like these are meant to reflect forward thinking. However, when no specific times are applied to a list of organizational priorities, it seems as if these priorities are fungible.
So, this leads us to the problem that there is no explanation of how Meta plans to generate high quality revenue growth.
Meta needs a Plan to Win ASAP.
A Plan to Win is a brand’s roadmap. It ensures that all enterprise individuals are aligned around the same goals, actions, schedules and measurements. The transcript for the Earnings Call revealed an executive team where each individual had their own priorities… priorities that did not come together to create an aligned vision for the future. Plus, the frequent use of buzz words blurred any coherent, connected strategy.
A Plan to Win articulates the critical brand components from purpose and promise through five actions areas – People, Product (service), Place, Price, Promotion – to measurement of progress.
A Plan to Win creates common clarity. A brand cannot be successful if it is unfocused, unclear or inarticulate. In the Earnings Call, Mr. Zuckerberg kept using the word “stuff” (4 times) to describe what Meta plans to create. This is an indeterminate, vague reference to say the least.
If Meta cannot specifically tell analysts and investors what the short- and long-term brand-business plans are, then there is a problem of magnitude. Meta did not engender confidence with statements such as this regarding Reels, the short-form video aimed at TikTok: “So, as the engagement of the new thing starts to replace some of the engagement and the old thing, it creates a near-term headwind for revenue but it’s not that part. At this point, now is not that big of a concern for us. I mean it makes some of the stuff not as clear in the near term but over the long term, we’re pretty optimistic.” Forget the hesitancy and the grammar: what direction does this give to Meta employees? What does this say to Wall Street?
With a Plan to Win, Meta would have its one-page outline for its complex program for metaverse transformation while fortifying its legacy Facebook brand.
There are three parts to a Plan to Win: 1) Brand Direction; 2) Brand Action; 3) Brand Performance.
Brand Direction articulates the Brand Purpose and the Brand Promise. Brand Purpose answers the questions Why does this brand exist? What is the overarching intention of the brand? Brand Purpose is the overarching goal for the organization. Brand Promise is the bond the brand has with its users. The Brand Promise expresses the brand’s intent that if you but this brand, you will receive a relevant, differentiated, trustworthy quality brand experience.
Brand Action defines the priority actions for implementing the Brand Direction. These are the aforementioned five action P’s: people, product (service), place, price, promotion. For each of these five action areas, there are defined, time-specific, must-do undertakings.
Brand Performance defines the brand’s measurable milestones. These metrics are used to evaluate progress toward the achievement of the Brand Purpose and Brand Promise through implementation of the activities set out in the five action P’s.
Since the Earnings Call, there have been many articles on why Meta is in its current condition. In the scripted section of the Earnings Call, the problems were clearly stated. Knowing the problems is a great first step. How are we going to manage the brand-business for the short-term and the long-term is something else altogether. In the unscripted, Q & A part of the Earnings Call, the disciplined path forward was vague but expensive.
Meta can certainly reinvent itself and do so successfully. But with the formidable “headwinds” – to use Meta’s language – this reinvention will need cohesiveness, discipline and strategy. The best and easiest way to begin a reinvention is to map the brand’s Plan to Win.
High quality revenue growth means having more users who visit more often and who are more loyal. This leads to increased market share and lower price sensitivity. And in turn, this leads to revenues, profits and increased shareholder/stakeholder values. High quality revenue growth leading to enduring profitable growth takes direction and order as well as creativity.
Meta must generate a Plan to Win ASAP to meet its short-term challenges and its long-term conceptualization.