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I agree with the former. Hard to starve yourself to greatness. The latter makes some sense. Make departments compete for capital. Give capital to those with t

I agree with the former. Hard to starve yourself to greatness. The latter makes some sense. Make departments compete for capital. Give capital to those with the best return. This doesn’t change that in the today Sears is just a land grab for the hedge fund who owns most of it.

cepth 8y ago
Kindly refer to the comment thread here: https://news.ycombinator.com/item?id=18086998 https://news.ycombinator.com/item?id=18086998. No other major retailer creates completely siloed divisions, each with its own C-suite of executives. No other major retailer throws common-sense merchandising tenets to the wind in service of some idea of a "free market" of ideas.
- mathattack 8y ago
  I’m not defending Sears, but Procter and Gamble sets up its brands in internal competition.
  - cepth 8y ago
    If you reference the article in that comment thread above: "Large technology companies and industrial conglomerates such as General Electric also take a decentralized approach. But retailers tend to favor an integrated model. That way, different divisions can be compelled to make sacrifices, such as discounting goods, to attract shoppers to stores." Competition sounds great in theory. At Sears, Lampert divided the company into 30 units, each with its own profit and loss statement. Space in the weekly circular was farmed out to the unit bidding the most, resulting in: -Toys for boys being advertised on Mother's day, because that department bid the most for space in the circular -Lingerie being featured next to tools. --- Because each unit had its own P&L, and its managers were compensated accordingly: -One Sears tool brand choosing to use an external battery supplier, because it didn't want to pay royalties to a Sears division that made lithium-ion batteries -Sears stores not opening early for Black Friday in 2011, despite all its peers doing so, because to do so required agreement among the 30 business unit heads --- It is perfectly reasonable for retail buyers to consider what mix of products to use, and whether to devote shelf space to external or house brands. It is not reasonable for the instructive structure to be constructed in a way where the company loses customers and sales because each individual unit's decision makers have a financial incentive to do so. No other major retailer operates/operated this way, and I'd wager that no one will try doing so in the future.
usrusr 8y ago
> Make departments compete for capital. Give capital to those with the best return. That will inevitable result in a race to convert corporate commons (brand goodwill) into short term gains. That kind of game will be won by making your peers lose faster.

cepth 8y ago

Kindly refer to the comment thread here: https://news.ycombinator.com/item?id=18086998 https://news.ycombinator.com/item?id=18086998. No other major retailer creates completely siloed divisions, each with its own C-suite of executives. No other major retailer throws common-sense merchandising tenets to the wind in service of some idea of a "free market" of ideas.

mathattack 8y ago
I’m not defending Sears, but Procter and Gamble sets up its brands in internal competition.
- cepth 8y ago
  If you reference the article in that comment thread above: "Large technology companies and industrial conglomerates such as General Electric also take a decentralized approach. But retailers tend to favor an integrated model. That way, different divisions can be compelled to make sacrifices, such as discounting goods, to attract shoppers to stores." Competition sounds great in theory. At Sears, Lampert divided the company into 30 units, each with its own profit and loss statement. Space in the weekly circular was farmed out to the unit bidding the most, resulting in: -Toys for boys being advertised on Mother's day, because that department bid the most for space in the circular -Lingerie being featured next to tools. --- Because each unit had its own P&L, and its managers were compensated accordingly: -One Sears tool brand choosing to use an external battery supplier, because it didn't want to pay royalties to a Sears division that made lithium-ion batteries -Sears stores not opening early for Black Friday in 2011, despite all its peers doing so, because to do so required agreement among the 30 business unit heads --- It is perfectly reasonable for retail buyers to consider what mix of products to use, and whether to devote shelf space to external or house brands. It is not reasonable for the instructive structure to be constructed in a way where the company loses customers and sales because each individual unit's decision makers have a financial incentive to do so. No other major retailer operates/operated this way, and I'd wager that no one will try doing so in the future.

usrusr 8y ago

> Make departments compete for capital. Give capital to those with the best return. That will inevitable result in a race to convert corporate commons (brand goodwill) into short term gains. That kind of game will be won by making your peers lose faster.