Tobacco is an $80 billion dollar industry, according to Forbes. Tobacco companies certainly know this—reports show they spend as much as $12 billion a year just on advertising. That comes out to more than $30 million a day just on marketing!
So why in the world would a company that is profiting from being a part of the “big tobacco” industry decide to drop out of the running? Because the sale of tobacco went against that company’s overall mission.
I’m talking about CVS.
CVS is changing its corporate name to CVSHealth; and to make sure that its focus is truly on customer health, the company stopped selling tobacco. CVS is the first national pharmacy chain to do that.
CVS executives say they expect to lose about $2 billion in revenue because of the change.
I love what CEO and President Larry Merlo had to say about the decision:
“We saw a growing contradiction between selling tobacco and delivering health care in a retail environment…. Our decision is an example of private sector influencing public policy.”
Can you imagine what it would have been like to be in the meeting where that decision was made?
I’m sure no one went into the conference room with the desire to lose money for the pharmacy chain. They simply (but not easily) decided that if “helping people on their path to better health” was truly their purpose, they had to weed out anything that differed from that goal.
Your organization has core values that employees are expected to achieve. Excellence, integrity, diversity, customer service, and some other “feel good” words are probably among them.
In theory, those are great; but what does it look like? Have you sat down and asked the hard questions to make sure everything done by you and your organization is in line with those values? And if your actions don’t match up, are you actually going to do something about it?
CVS was willing to lose $2 billion to keep in line with its values, but your “$2 billion” could be a highly valuable employee, a major third-party contract, or some other company perk.
Sometimes leaders have to make sacrifices. It’s not always comfortable, and it may even end up costing you financially, but being confident that your organization is walking the talk is priceless.
Director of Communications, Strategic Government Resources
Amen. FEW are willing to allow principles to trump profits these days.
Very true, Enna! (And it’s great to hear from you again) 🙂
I love reading this blog it just seems as though I don’t get around to it like I used to. Keep up the great work!
I applaud this action, I’ve said for year that Private entities such as restaurants and nightclubs should ban tobacco use on their premises and then reap the financial rewards of all the customers who appreciate the gesture and atmosphere. I much prefer that route to government regulations and the added cost of enforcement. Now CVS just needs to quit selling candy, ice cream, sodas, and any number of other unhealthy items in their stores…
Exactly, Matthew. It was a great step in the right direction of CVS’ overall vision. I don’t know if the execs are willing to give up anything else though. HAHA!