Posted by: yogmoney | November 22, 2008

A Cold Cup

A Story of a company located in a rainy city

 

Tonight I sit in front of this keyboard with a desire to share some thoughts on a place I used to spend quite a bit of my time. These are opinions, laced with some perspective that most who have written about this place have lacked. This is an opinion piece.

 

This place that I write about today is a global powerhouse in its field. They created something unique in this world. The person who created it did so on his own back. He worked tirelessly with a relentless vision focused on quality, experience, and personal connection. He has made a significant impact on the world around him. And, he has been rewarded handsomely for his efforts.

 

I’ve already told you that I used to spend a lot of my time there, at this place in a rainy city located in the Pacific Northwest. I left there after spending a little more than 1,000 days working in this place. I learned a lot while I was there. You could say that I actually grew up along the way. I am not perfect. In fact, I am far from it. So the opinions I give here are not from the perspective of someone who is perfect, or even close to perfect. I have no axe to grind as my time there was productive and, at times, it could be described as enjoyable. I have many friends who are still there. I should mention that I no longer own any stock in this company. I left there to pursue another career in another field. I left there in good standing. I left more than a year ago but remain curious, as a student of business, as I watch their continued demise from a far.

 

This place, this company, has lost its way. It has done some for a few key reasons, I believe.  They are scrambling to get back on track. They have a long way to go if they are ever to get there.

 

The Emperor Has No Clothes

This is a timeless story and it applies here. The Emperor, in this case, is the guy who created the place. He is an inspiring and at the same time an intimidating leader. He has the ability to inspire people with just a few words. At the same time he strikes fear in many he interacts with. The people he surrounds himself with tell him what he wants to hear. He encourages people to be open and honest. Once they have crossed the line and given him what they really think their demise begins. I’ve seen it no fewer than a dozen times. So, the people around him walk on eggshells and tell him what he wants to hear. All the time, the Emperor has no clothes. He is out of touch with what is happening around him. He lives in the moment and runs things by his gut. What seems like a perfectly good idea on a Monday, is considered to be idiotic by Friday. There is no in-between. No room for debate. He is the kind of leader that will ask you to do something with great passion, in a room filled with your peers. Once you’ve done what has been asked he is the same guy who will tell you (in front of those same people) how stupid you are for having the idea to begin with. An idea, mind you, that he came up with in the first place. So, people tell him what he wants to hear and he listens only to what his gut tells him. This is part of the recipe for disaster. The Emperor Has No Clothes. Ask anyone at this place who works with the leader on a regular basis and they will tell you of this dirty little secret.

 

 

Out of Touch With The Consumer

At this place the idea of consumer based research is considered to be a four letter word. When asked to conduct research you are immediately told that this “isn’t Procter & Gamble or some other normal consumer brand……we know our customers and don’t need to do any research”. True story, this one is. This place has more than 12,000 locations in this country alone….and the expectation is that the leadership of the company is supposed to know their consumer by simply visiting stores every week. I will admit, you learn a lot during store visits and by working in a store. However, you don’t get the true big picture as to what’s really going on without the in-depth consumer insights you get when doing some research. This approach is completely irresponsible to the people who own shares of stock in this place. This place, this powerful force, has lost touch with its consumer because it never talks to them. This is a big problem and one that needs to be addressed if it ever expects to get itself back on its feet. Oh yeah, they’ve opened up a website to take consumer suggestions which I am sure is delivering some interesting ideas. What they’re missing however is the insight from the millions of visitors who no longer visit this place on their way to work any more. The customers that won’t take the time to give unsolicited feedback to their fancy little website. They have lost touch. I actually worked for Procter & Gamble for a little while and they taught me that the consumer rules the day and that any responsible business professional  would be relentlessly focused on the ever-changing consumer. In this case, this place has lost the plot.

 

Focused On Rapid Expansion At The Expense of Quality

This place was once considered the premiere consumer experience. They opened stores in towns all across the country (and the world). They brought a sense of community, a respite from the madness of day-to-day life. It was once a place where people might sit and talk to a total stranger about politics or a great book they just read. The people who worked there knew your name and knew what you wanted the minute you walked in the door. It was like a modern day English pub without the alcohol and cigarettes. It was a gathering place and many, many people wrote about its uniqueness. It was, at one time, a special experience to come to this place.

As they began to rapidly expand, sometimes opening more than 3 new stores a day around the world, they lost touch with that special experience. They grew their store count faster than their ability to find quality people to work in the stores. As they did this they lost their way. Their relentless focus on convincing Wall Street that they were a growth company caused them to make sub-optimal real estate decisions – building stores in locations where 2 years before they never would have considered. They had a quota and no one was watching what was happening. Their approach became focused on forcing these new stores to deliver the good old -fashioned experience and when they didn’t they heard about it from the top guy. Instead of digging in to find out why the experience was slipping the stores were made to feel inadequate. Managers were let go, people who worked in the stores soon followed. The benefit of health care for part time employees became less important as the work environment deteriorated. The experience, as it was once delivered in that rainy Pacific Northwest town, had disappeared. No matter how upset the top guy became he couldn’t get it back. Had they stopped along the way and talked to a few consumers they might have learned a thing or two. Instead, they pressed forward, cranking out stores one after another, day after day.

 

 

Back To The Future

So, as they try to find their way again in the midst of the world’s economic meltdown the leadership has decided to try to recreate lightning in a bottle. Out with the mid-level (VP) managers. Out with the CEO. Enough with the COO. Its time for the top guy, the visionary, to step back into the day-to-day business. (It should be noted that he occupied an office a mere 5 feet from the former CEO’s office and was actively involved in almost every single meaningful decision that was made). However, it was time for the leader to re-emerge and to bring the company out of its funk. The first thing the leader did was to bring back the people who helped to create the original “experience”. These people, many of whom haven’t been involved with the company form 5-10 years, stepped back in and immediately began to insert the old ways back into the business. The problem is that the world has moved on. The problem is that this company is no longer made up of 25 stores and 100 people living in a rainy city in the Pacific Northwest. Here’s a clue folks – the world outside the Northwest is different. The world has changed over the past 35 years. And, they need to change to. They face a major dilemma here. They can continue to tell themselves that what they once had can be recreated in more than 15,000 locations across this big country. This is highly unlikely. Or, they can evolve like the rest of us have. The issue here is that its unlikely that the guy leading the place can come to grips with the fact that this company has outgrown their ability to manage it the way they once did. They wanted complete global domination and they got it. Now that they have it they’ve realized that they’ve created something that is no longer unique. There are several emerging competitors who are literally eating their breakfast. So, the approach of trying to recreate lightning in a bottle by bringing back the old guard doesn’t look to me to be the right approach.

 

 

Will they ever regain their importance in our culture? I hate to say it but I don’t see how they can.  They have an emperor running around without any clothes on, hanging out with people he worked with 30 years ago, managing by gut instinct and not consumer insights, and trying to recreate an experience that they lost long ago. Distributing a sub-par weekly newspaper, giving away a free download each week, and serving me product in a red cup instead of a green one aren’t the answers to the problems facing this place. I am not the smartest guy in the room. In fact, I’m rarely the smartest guy in the room. I am smart enough to see the problems staring them in the face. Problems that I’m not sure they can see themselves.

 

It’s time for a new leader. It’s time to get back in touch with the customer. It’s time to slow down and remember the core principles that helped make this place something special. Its time to live up to the words that are printed on the back of everyone’s business cards. Its time to start practicing what you preach. Stop trying to spin the media into believing you are something you are not. Its time to be honest with yourself. Its time to stop surrounding yourself with people who tell you only what you want to hear. Its time to start treating people with the dignity and respect you talk about. Just take a look around yourself. None of the people standing around you have been with you that long. All the good ones, the great ones, have left. They have left because once they got a peek behind the curtain and saw how Oz was being run.

 

People are no longer buying the dream. They aren’t buying it because the dream isn’t real.

 

Excuse me, Mr. Emperor sir, its time to get yourself dressed.


Responses

  1. Wow, amazing blog, I read every post! Nicely written!

  2. WOW Geoff – Great piece and agree 100%.

  3. Geoff, this piece is fantastic; it should be submitted to Forbes or Fortune or NYT. As both a customer and shareholder, I completely agree–even without ever having been behind the curtain (but now I know the answers to some of my questions 😦 ).

    • Lee – thanks a bunch for the nice words. i really appreciate it.
      i’ve thought about submitting it as an op ed piece in the Seattle paper. i thought that certain people might get a little mad….and i’d wind up floating in the Hudson River…….and not standing on the wing of a plane.

  4. Hey Geoff. Great piece. I have worked for an Emperor also. These characteristics are unfortunately not unique to him. The pride and arrogance will eventually rot any of the creative fruit the gifts may have produced. I feel for such a person because they can’t or won’t see the flaws until it is too late. They will usually hit rock bottom and and blame everyone else for the failure. This is such a shame!

  5. I SHOULD HAVE CHEATED AND HAD YOU RIGHT MY ENGLISH PAPERS IN SCHOOL.

    JUST KIDDING GEOFF…U KNOW I LUV YA

    BEST
    WILL

  6. As you know Chandra has probably been, the “ultimate” loyal customer over the years this company has been in biz. Now everytime she goes to one it is not without complaint of one thing or another. As her husband I get to hear everyone, yeah! We do agree though, the experience has changed for the worst. ” You betta start swimming or you’ll sink like a stone” Bob Dylan.. “The Times They Are A-Changin” the whole song applies. Thank goodness the times are a changing!!!

  7. Hi Geoff,

    I hope you are well.

    I wanted to follow up with you on the emails we exchanged about the Parlotones. Were any of your guys able to catch the shows at SXSW? I also wanted to see if you still had any interest in a Converse “Synergy” with the band.

    I look forward to hearing from you,

    Best Regards,

    Marc Morris

    917 6530010

  8. you rock


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: