Sir Martin Sorrell wrote a compelling article on thinking long-term and taking risks to achieve success. He wrote:
Corporate America is shrinking—at least by one important measure. In five of the six quarters to June 2016, across the S&P 500, share buy-backs and dividends exceeded retained earnings.
From around 60% in 2009, the ratio of payouts and buy-backs to earnings has risen inexorably, passing 100% at the beginning of 2015 and reaching a staggering 131% in the first quarter of 2016.
If you imagine the S&P 500 to be one company, that company ceased to grow at the start of last year and shrank by nearly a third in the first three months of 2016. While the FTSE 100 may not have gone into reverse, a similar trend can be observed. The dividend-payout ratio has climbed from less than 40% in 2011 to over 70% in 2016.
Read full article here...
My Comment on the Topic:
Excellent assessment of the pressures CMOs face to cut costs rather than invest in brand building - an approach "entirely understandable—and entirely wrong".
Yet with all the rich customer insights and tools available to digital marketers, there's every reason to invest in your teams to build brands, win loyalty and grow sales. Digital marketing is a low-risk investment, not a cost.
View my comment here...