In Just 4 Words, Shopify's CEO Taught a Leadership Lesson to Every CEO - Inc.

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In Just 4 Words, Shopify's CEO Taught a Leadership Lesson to Every CEO – Inc.

Published

2 years ago

July 31, 2022

Harry Miller

For many of us, they are the four most difficult words to say to others. For high-powered billionaire CEOs — especially so.

“I got this wrong.”

Shopify CEO Tobi Lütke issued a statement sharing the news about a sweeping set of layoffs to 10 percent of Shopify’s workforce, mainly in the recruiting, support, and sales departments. Over the past 2.5 years, Shopify capitalized on the boom in the e-commerce space, as lockdowns and closures spurred an uptick in online purchasing behaviors.

Brick-and-mortar stores were out. Online shopping was in.

Lütke made a bullish prediction: The e-commerce space would leap ahead 10 years from pre-pandemic predictions and usher in a dawn of near-total online shopping. Shopify — and Lütke — went all in.

But he was wrong.

Consumers are reverting to pre-Covid shopping habits. I guess there’s still something to be said for putting on a pair of pants and leaving the house to do our shopping. Browsing for clothes in clothes is still a thing — for now.

“Ultimately, placing this bet was my call to make and I got this wrong,” said Lütke. “Now, we have to adjust.”

A difficult situation, to be sure. But Lütke owned it — showing up with a quality of honest integrity, or what CEO Rasmus Hougaard calls “caring candor.” It’s one thing to let go of hundreds of your employees at one time. It’s a whole other thing to do so while taking full responsibility for the bad outcome.

Therein lies the key to powerful leadership.

The psychology of apologizing (the right way)

Saying sorry is a daily occurrence for most of us. We say it, or have it said to us, as part of ordinary life — common and fleeting exchanges between colleagues, family members, and even strangers. But for high-powered leaders in Fortune 500 companies, an apology is so much more than a casual “sorry about that.” They have to be reserved for special occasions.

As Harvard psychologist Barbara Kellerman writes, “A leader’s apology is a performance in which every expression matters and every word becomes part of the public record.” According to Kellerman, an apology coming from a CEO must be carefully thought out. It is a “high-stakes move, for themselves, for their followers, and for the organizations they represent.”

In the case of Lütke and Shopify, there were likely dozens of senior leaders at the time involved in the decision process. It’s not like Lütke was operating solo and making big strategic pivots without the counsel of his executive team.

In which case then, Lütke could have pointed to the collective expression of regret — “We made a bet.” Or, at the very least, he could have used the royal we in his statement: “We got this wrong.”

He didn’t do that, though. He owned it and put the blame squarely on himself. He chose not to drag his leadership team through the mud.

A wise choice, if not an ethical one. A leader’s position means that not only are you responsible for your own behavior, but also for that of your team, followers, and the institution you represent at large.

When things go well at the organization, you are the hero. And when things go poorly, you take the fall. That’s the job of a leader. Par for the course. You can’t always be the hero.

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Dow Jones Rises But S&P, Nasdaq Fall; Nvidia, SMCI Flash Sell Signals As Bitcoin's Fourth Halving Arrives – Investor's Business Daily

Published

8 hours ago

April 19, 2024

Harry Miller

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Dow Jones Rises But S&P, Nasdaq Fall; Nvidia, SMCI Flash Sell Signals As Bitcoin’s Fourth Halving Arrives Investor’s Business Daily
Iran fires at apparent Israeli attack drones: Mideast tensions The Associated Press
S&P 500 extends losing streak to sixth day, Dow up 210 points Yahoo Canada Finance
Stock Market Today: Dow, S&P Live Updates for April 19 Bloomberg
Stock market today: Wall Street limps toward its longest weekly losing streak since September CityNews Kitchener

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Netflix stock sinks on disappointing revenue forecast, move to scrap membership metrics – Yahoo Canada Finance

Published

10 hours ago

April 19, 2024

Harry Miller

Netflix (NFLX) stock slid as much as 9.6% Friday after the company gave a second quarter revenue forecast that missed estimates and announced it would stop reporting quarterly subscriber metrics closely watched by Wall Street.

On Thursday, Netflix guided to second quarter revenue of $9.49 billion, a miss compared to consensus estimates of $9.51 billion.

The company said it will stop reporting quarterly membership numbers starting next year, along with average revenue per member, or ARM.

“As we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact,” the company said.

Netflix reported first quarter earnings that beat across the board on Thursday, with another 9 million-plus subscribers added in the quarter.

Subscriber additions of 9.3 million beat expectations of 4.8 million and followed the 13 million net additions the streamer added in the fourth quarter. The company added 1.7 million paying users in Q1 2023.

Revenue beat Bloomberg consensus estimates of $9.27 billion to hit $9.37 billion in the quarter, an increase of 14.8% compared to the same period last year as the streamer leaned on revenue initiatives like its crackdown on password-sharing and ad-supported tier, in addition to the recent price hikes on certain subscription plans.

Netflix’s stock has been on a tear in recent months, with shares currently trading near the high end of its 52-week range. Wall Street analysts had warned that high expectations heading into the print could serve as an inherent risk to the stock price.

Earnings per share (EPS) beat estimates in the quarter, with the company reporting EPS of $5.28, well above consensus expectations of $4.52 and nearly double the $2.88 EPS figure it reported in the year-ago period. Netflix guided to second quarter EPS of $4.68, ahead of consensus calls for $4.54.

Profitability metrics also came in strong, with operating margins sitting at 28.1% for the first quarter compared to 21% in the same period last year.

The company previously guided to full-year 2024 operating margins of 24% after the metric grew to 21% from 18% in 2023. Netflix expects margins to tick down slightly in Q2 to 26.6%.

Free cash flow came in at $2.14 billion in the quarter, above consensus calls of $1.9 billion.

Meanwhile, ARM ticked up 1% year over year — matching the fourth quarter results. Wall Street analysts expect ARM to pick up later this year as both the ad-tier impact and price hike effects take hold.

On the ads front, ad-tier memberships increased 65% quarter over quarter after rising nearly 70% sequentially in Q3 2023 and Q4 2023. The ads plan now accounts for over 40% of all Netflix sign-ups in the markets it’s offered in.

FILE PHOTO: Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo — Netflix reported first quarter earnings after the bell on Thursday. REUTERS/Dado Ruvic/File Photo (REUTERS / Reuters)

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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Oil Prices Erase Gains as Iran Downplays Reports of Israeli Missile Attack – OilPrice.com

Published

12 hours ago

April 19, 2024

Harry Miller

Oil Prices Erase Gains as Iran Downplays Reports of Israeli Missile Attack | OilPrice.com

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.

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By Tsvetana Paraskova – Apr 19, 2024, 4:23 AM CDT

Oil prices initially spiked on Friday due to unconfirmed reports of an Israeli missile strike on Iran.
Prices briefly reached above $90 per barrel before falling back as Iran denied the attack.
Iranian media reported activating their air defense systems, not an Israeli strike.

oil

Oil prices gave up nearly all of early Friday’s gains after an Iranian official told Reuters that there hadn’t been a missile attack against Iran.

Oil surged by as much as $3 per barrel in Asian trade early on Friday after a U.S. official told ABC News today that Israel launched missile strikes against Iran in the early morning hours today. After briefly spiking to above $90 per barrel early on Friday in Asian trade, Brent fell back to $87.10 per barrel in the morning in Europe.

The news was later confirmed by Iranian media, which said the country’s air defense system took down three drones over the city of Isfahan, according to Al Jazeera. Flights to three cities including Tehran and Isfahan were suspended, Iranian media also reported.

Israel’s retaliation for Iran’s missile strikes last week was seen by most as a guarantee of escalation of the Middle East conflict since Iran had warned Tel Aviv that if it retaliates, so will Tehran in its turn and that retaliation would be on a greater scale than the missile strikes from last week. These developments were naturally seen as strongly bullish for oil prices.

However, hours after unconfirmed reports of an Israeli attack first emerged, Reuters quoted an Iranian official as saying that there was no missile strike carried out against Iran. The explosions that were heard in the large Iranian city of Isfahan were the result of the activation of the air defense systems of Iran, the official told Reuters.

Overall, Iran appears to downplay the event, with most official comments and news reports not mentioning Israel, Reuters notes.

The International Atomic Energy Agency (IAEA) said that “there is no damage to Iran’s nuclear sites,” confirming Iranian reports on the matter.

The Isfahan province is home to Iran’s nuclear site for uranium enrichment.

“Brent briefly soared back above $90 before reversing lower after Iranian media downplayed a retaliatory strike by Israel,” Saxo Bank said in a Friday note.

The $5 a barrel trading range in oil prices over the past week has been driven by traders attempting to “quantify the level of risk premium needed to reflect heightened tensions but with no impact on supply,” the bank said, adding “Expect prices to bid ahead of the weekend.”

At the time of writing Brent was trading at $87.34 and WTI at $83.14.

By Tsvetana Paraskova for Oilprice.com

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