Bottom Up Ideas Need Protection
Bigger is not always better, and how big killed the “Blue Light”.
I was listening to a Freakonomics Radio podcast and heard an interview with John List, an economist, speaking about his new book, “The Voltage Effect: How to make good ideas great and great ideas scale.” As John described his perspective on “scale,” he touched on K-Mart and the “Blue Light Special” as an example of scaling that failed.
An assistant manager in one of their smaller markets came up with the “Blue Light Special” idea. The promotion and its announcement inside the store created excitement, kept shoppers there longer, and helped move inventory, clogging up shelf space.
The K-Mart corporate executives got wind of this promotion and quickly spread the concept across the country in all their stores. Another retailer, Sam Walton, who was in the early stages of building his mega-brand Wal-Mart, declared the idea as genius.
What Happened to the Blue Light?
We have all heard the phrase, “Bigger is not always better,” and in this case, going big was not better. K-Mart corporate decided to manage this promotion at the top and predetermine specials, make them the same inventory at all stores and build a forecast going out months for sales activation.
The eventual disconnect between the “local” success and the corporate oversight pushed the promotion’s success downward. The “Blue Light” at K-Mart dimmed, even after a brief period in 1999, as a free internet service supported by banner ads.
The rest of the story… K-Mart once had thousands of stores in the U.S. and abroad. However, K-Mart as a retail brand deteriorated due to competition from Wal-Mart and Target, several bouts with lousy management, bankruptcy, and eventually being folded into Sears Holdings. Today there are ten stores, with only four operating in the U.S.
Takeaways:
1. Great ideas can come from the bottom of your organization. Be careful to support them and not crush them with complicated oversight or controls that are too tight.
2. No matter how big or successful, any brand must be moving toward serving its customers first and staying one step ahead of its competition.
3. Change is the road to growth. There will be the unexpected ahead; strengthening your prospecting for new business and diversity across categories and revenue streams is vital.
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