In what appears to be a slow-motion march toward bankruptcy, Barnes & Noble announced its recent quarterly earnings; a -5.3% revenue decline to $1.2 billion and a loss of $63.5 million. This situation reminds me very much of Kodak in the period from 1995-2010. It sat back and watched its stock price go from $90/share down to virtually nothing, as the era of digital cameras emerged.
Bob's Gutsy Leadership Blog
Bob regularly writes blog posts and articles with his areas of focus being leadership, organizational effectiveness. Below you will find the titles and hot-links of his most recent efforts:
After a couple of years of chaotic behavior on the part of the top management of Uber, it has a new CEO who is now working hard to clean things up and to set a direction for the company. His primary area of focus is understanding what the customer base thinks should be improved, and […]
The fast food business has become extremely competitive in the U.S. over the last couple of years as McDonald’s key competitors, Wendy’s and Burger King, came out with aggressive deals to attract customers. Examples of such offers are Burger King’s deal of 10 chicken nuggets for $1.69 and Wendy’s “four for four dollar” menu, which have been extremely successful. McDonald’s has been losing U.S. market share to these aggressive players and has lost the loyalty of some of its most cost-conscience customers, according to analysts.
As cable TV’s most expensive channel, ESPN has found themselves in the unfortunate position of having the big cable distributors offering discounted packages that didn’t include this sports channel. Many consumers have opted for these options, while others cut the cable cord entirely and use streaming services exclusively. This has led to ESPN losing 16 million subscribers over the past 7 years.
The current Morgan Stanley CEO took his job in 2010. The company was struggling badly coming out of the 2008 recession, during which Morgan Stanley’s share price had sunk to $14. After taking a year to fully understand the nature of the business, he announced in early 2012 that “the path we are on is simply not sustainable.” He went to work by first axing Morgan Stanley’s proprietary trading desks and shrank its bond trading operations, the source of repeated blunders. He sold an oil tanker fleet and a half-finished casino, remnants of a freewheeling culture that once ruled Wall Street.
I recently read a summary of a study on the “unstoppable power of leaderless organizations.” It was authored by two academics that wrote it in a style that suggested they believe they should be put on a pedestal for this astounding work. The report sings the praises of “starfish-like” organizational structures that are totally decentralized and completely dependent on peer-to-peer relationships. They claimed this inherent flexibility would lead to a big positive impact on the management of projects and the discovery of knowledge.
Recently, Nike learned the hard way that you need to know what employees are experiencing. Specifically, the press reported that this saga began with several female employees complaining to the Nike HR organization about sexual harassment issues. The press noted it was apparently common practice for an HR representative to meet one-on-one with anyone who had a complaint, tell them they are the only person with such a complaint, and suggest that it’s their own fault.
One of the key attributes of a strong, courageous leader is the ability to get people to pursue an aggressive plan for improvement. In doing so, lots of dialogue takes place as the plan is developed, with particular emphasis on trying to make the dissenters understand the thinking, even though they may not agree. In dealing with those that may not agree, one thing you want to avoid is telling them they are wrong.
In recent months the business press has been filled with stories of the weak performance of General Electric. Many comparisons have been made to the lack of leadership in the last 15 years versus that which Jack Welch provided during GE’s glory years in the 1980’s and 90’s. One of the most controversial aspects of Welch’s time at GE was his so called “rank and yank” procedure, where he would fire the bottom ranked 5-10% of his managers each year, regardless of absolute performance. He earned a reputation for brutal candor. He rewarded those ranked in the top 20% with bonuses and stock options.
It was 2015 when the acquisitive Brazilian investment giant, 3G Capital, took over Kraft Foods and merged it with HJ Heinz, the catsup maker, which it already owned. In this deal, Warren Buffet provided much of the cash, knowing full well that there were profits to be made, given the strong reputation of 3G Capital of being world-class when it comes to cost-cutting.