Management starts to sense victory during this period of stabilization. Wall Street analysts, such as one quoted in a recent BBY story at TheStreet, only reinforce the false optimism:
Management spoke to incremental cost cutting opportunities on its call, but we think the firm will be challenged to deliver superior customer experiences while slashing its cost structure ... We believe management has made smart decisions here, and is coping valiantly with tough positioning. Also, we realize that holiday is a bad time to judge the efficacy of emerging initiatives, so we model a much better showing in upcoming quarters" (bold emphasis added).
That excerpt shows several things --
One, a company focused on what amounts to the non-strategy of burning the furniture to build a fire. (At least the analyst half-acknowledged it's probably not going to work).
Two, the notion that somehow this non-strategy is smart, providing further fuel to management to continue along an illogical path.Three, excuses. The non-strategies didn't work this time around because of a) "tough positioning" (but the company copes "valiantly") and b) the holidays, which one might argue are the best time to test out new ways (if only they were new!) given the abundance of people out shopping and looking for deals. See what I'm getting at here? As the typical retail executive stabilizes the operation, the idea of ultimately changing everything quietly ceases to be a goal. Because the stabilization objectives are working so well -- or at least that's what the people you choose to listen to tell you -- maybe the old model wasn't so bad after all. It merely required a refresher. You know, something like Best Buy's Renew Blue program or Sears's cheap Amazon Prime imitation Shop Your Way. The longer you put off actual -- and very necessary -- radical change, the less likely it is to happen. The more you convince yourself that what you're doing now might be the right way to proceed after all -- and misinterpret results or let others do it for you -- the less likely you are to change. You roll with what you know -- at the board level, in the executive suite, among the rank and file and at the individual level. Using hockey lingo, the more these guys drag the puck (continue doing what they've been doing), the best result they can realistically hope for is to kiss their sister (what we called a tie in the pre-shootout NHL). Enough talk about stabilization. Blow the entire operation up and start from scratch. The first major retailer to set out on that course will be the one to finally incite meaningful and long-lasting change in physical retail. We're not spinning one-hit wonders here. I'm already working on the next retail article that flows seamlessly from this one. Follow me on Twitter (TWTR) and at TheStreet. In the next retail piece we start to imagine, with specifics, what "meaningful and long-lasting change" might look like. Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.
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