Technology & Your Business: Adapt or Create or File Bankruptcy
Some Sears Lessons
Sears — founded in 1892 — once comprised 3,500 physical Sears and K-Mart stores, produced $55 billion in revenue and employed over 350,000 people. It is now planning to close up to 150 of its department and discount stores and keep around 300 stores total. We in the real estate world have witnessed sharp declines in the stock valuation of traditional leading brokerages, some of whom have experienced over 40% declines in the past 36 months while the markets are up around 40% on average. Sears’ dramatic decline is an opportunity for all of us to possibly learn some important lessons. Here are some of my observations:
1. REAL ESTATE. Most Sears physical stores are in bad shape. Many have not been well maintained and lack the upgrades necessary to appeal to today’s modern shopper. Real Estate — especially retail — needs to adjust to changing times consistently to appeal to the changing needs and desires of consumers. We in residential real estate can acknowledge this too: a 10-year old building lobby can look tired and may need to be upgraded to have the apartments above it compete favorably price-wise with new buildings. On-going investing in maintenance and improvement is essential.
2. LEADERSHIP: Many Sears employees interviewed by Business Insider felt leadership was removed and not physically present. Many emplyees feared to provide honest input, opinions, and feedback. Arrogant leadership that assumes they know everything and don’t listen to their staff, clients and/or the consumer are bound to run into trouble. Leadership that is exclusively focused on making as much money for themselves is bound to run into trouble.
3. CATALOG: The Sears Catalog was a household favorite for millions around the world. Its massive display of thousands of different items is what is displayed today online much easier, with much more information, more convenience and time-saving technology. Sears should have led the transition to digital while still retaining that which was great about this catalogue.
4. LOYALTY: Asking for and demanding loyalty is very different from EARNING loyalty. Earing loyalty requires constant improvement and communication. Expecting loyalty while behaving badly is arrogant and delusional. Loyalty and servitude should never be confused.
5. GREAT PEOPLE MAKE GREAT COMPANIES: A company is nothing without its people. Happy, productive, intellgent hard-working people who feel inspired, supported and feel they have a voice and truly matter make for great companies. A demotivated group of people makes for a demotivated company.
6. DO AS YOU SAY: A great company cannot just preach promises, ethics and quality. It has to enforce and live by the standards it preaches. It should never celebrate or reward a select few simply because of their productivity, regardless of their bad behaviors.
7. TOO BIG CAN BE TOO BIG: A large company that is not nimble and capable of acting and moving quickly, that is mired in layers and cumbersome approvals, that does not empower its employees to be decisive and do the right thing is bound to run into trouble.
8. OVER-DIVERSIFYING: A company that tries to be all things to all people is bound to fail. Focus and quality without compromise are essentials in a highly competitive world. Investing in new products and services is important, but re-investing in your existing ones is as important.
9. PROVENANCE: Just because you have been around for many decades does not automatically guarantee your position in the future. Evolution — especially in business — has accelerated and we compete in a global market with high levels of innovation and the ability to finance new ventures to allow them to grow rapidly. The consumer is highly receptive to new and better.
10. THE CONSUMER EXPERIENCE MATTERS MOST: Never lose sight of the consumer experience ever. Keep close to the consumer and LISTEN, LISTEN, LISTEN. Everything we need to do in the future can be sourced easily by listening to those we wish to serve.