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Mike Z, is that you?

ineedasername 8y ago
Nope :) I have nothing to do with the comms industry directly. I just really enjoy (to the extent that's the appropriate word) the puzzle that is massive organizational failure. It's a fascinating topic. Sears & Toys R Us are two more recent examples that have enthralled me. The road from massive mult-billion dollar corporation to defunct is filled with branch points. Any one of them might have avoided or delayed disaster. You're correct of course in a general sense that mismanagement is a frequent component. In my opinion though, that may be a sufficient condition in many cases, but it's not always a necessary condition. A great example, maybe my favorite, where poor management was really a primary issue was the death of Circuit City. There as they faced increasing competition from internet sales, Best Buy, and other competitors, they sought to cut costs in part by firing the highest paid floor sales staff, replacing them with lower paid, usually minimum wage workers. Some of those higher paid workers may have been dead weight, but on the whole they represented the most experienced, most knowledgeable floor staff best able to help customers (or more cynically sell them on stuff they didn't need with techno-jargon). In any case, it was a very short jump from there to revenue falling off a cliff, and bankruptcy. So poor management, absolutely foreseeable, directly caused their downfall. Though even there the poor management was partly a result of externalities like increased online shopping putting previously non-existent pressure on them.
- StillBored 8y ago
  I think the sears story's most important point is that they canceled their general catalog sales in 1993, the year before amazon was founded. So 100% lack of foresight, but the real screw-up was by 1997 or so everybody and their dog was trying to sell everything under the sun online. Where was sears, still stubbornly refusing to acknowledge that internet sales were just the modern version of the business model that worked immensely well for sears. How much would it have cost them to resurrect some form of mail-order/web forms read some business journals about Dell's order and deliver model and start making some side bets and deals with UPS/fedex?
  - ineedasername 8y ago
    Oh yes, these were absolutely the early decisions that started their demise. In more recent years though, I attribute their demise to the CEO. If not for this they may have weathered the storm another decade, maybe (though less likely) pivoted to a long term midel of profitability. But the CEO, far from simply beimg incompetent, engaged in a protracted pattern of self-dealing to his other financial interests that gradually drained them of resources and productive assets.
  - ineedasername 8y ago
    And to add to my other comment, Yes: It really is astonishing that Sears did not see the clear analogues between the internet and its traditional catalog sales. But then they'd (as you pointed out) decided to reduce costs a few years earlier by discontinuing their general catalog. Had they kept the catalog it's entirely possible someone would have said "Hey, this internet thing looks popular, how about we put a copy of our catalog up there?" I'd love to know what their thinking was in the late 90's. I can imagine that management for brick & mortar stores might have pushed back on making inroads on the internet out of fear it would cannibalize their sales, and blocked it internally. Or it could simply have been inertia and a blind spot against noticing that "internet" wasn't a flash in the pan fad.

Nope :) I have nothing to do with the comms industry directly. I just really enjoy (to the extent that's the appropriate word) the puzzle that is massive organizational failure. It's a fascinating topic. Sears & Toys R Us are two more recent examples that have enthralled me. The road from massive mult-billion dollar corporation to defunct is filled with branch points. Any one of them might have avoided or delayed disaster. You're correct of course in a general sense that mismanagement is a frequent component. In my opinion though, that may be a sufficient condition in many cases, but it's not always a necessary condition. A great example, maybe my favorite, where poor management was really a primary issue was the death of Circuit City. There as they faced increasing competition from internet sales, Best Buy, and other competitors, they sought to cut costs in part by firing the highest paid floor sales staff, replacing them with lower paid, usually minimum wage workers. Some of those higher paid workers may have been dead weight, but on the whole they represented the most experienced, most knowledgeable floor staff best able to help customers (or more cynically sell them on stuff they didn't need with techno-jargon). In any case, it was a very short jump from there to revenue falling off a cliff, and bankruptcy. So poor management, absolutely foreseeable, directly caused their downfall. Though even there the poor management was partly a result of externalities like increased online shopping putting previously non-existent pressure on them.

StillBored 8y ago
I think the sears story's most important point is that they canceled their general catalog sales in 1993, the year before amazon was founded. So 100% lack of foresight, but the real screw-up was by 1997 or so everybody and their dog was trying to sell everything under the sun online. Where was sears, still stubbornly refusing to acknowledge that internet sales were just the modern version of the business model that worked immensely well for sears. How much would it have cost them to resurrect some form of mail-order/web forms read some business journals about Dell's order and deliver model and start making some side bets and deals with UPS/fedex?
- ineedasername 8y ago
  Oh yes, these were absolutely the early decisions that started their demise. In more recent years though, I attribute their demise to the CEO. If not for this they may have weathered the storm another decade, maybe (though less likely) pivoted to a long term midel of profitability. But the CEO, far from simply beimg incompetent, engaged in a protracted pattern of self-dealing to his other financial interests that gradually drained them of resources and productive assets.
- ineedasername 8y ago
  And to add to my other comment, Yes: It really is astonishing that Sears did not see the clear analogues between the internet and its traditional catalog sales. But then they'd (as you pointed out) decided to reduce costs a few years earlier by discontinuing their general catalog. Had they kept the catalog it's entirely possible someone would have said "Hey, this internet thing looks popular, how about we put a copy of our catalog up there?" I'd love to know what their thinking was in the late 90's. I can imagine that management for brick & mortar stores might have pushed back on making inroads on the internet out of fear it would cannibalize their sales, and blocked it internally. Or it could simply have been inertia and a blind spot against noticing that "internet" wasn't a flash in the pan fad.