Today $BBY announcing lay-offs in Geek Squad hyped yesterday. Suicide pact with $RIMM up nextThat's Twitter gold. While I catch Macke's general drift, it makes more sense to compare Best Buy ( BBY) to Radio Shack ( RSH) and Research in Motion ( RIMM) to Nokia ( NOK). First, it never hurts to review the carnage. If nothing else, it might remind you to stay away from the market's so-called value plays. Take a gander at the five-, two- and one-year returns (in parentheses) for BBY, RSH, RIMM and NOK. Put a minus sign in front of each number. No plus signs needed.
Best Buy and Radio ShackWhile it's entirely possible that Best Buy and Radio Shack die, I'm inclined to believe that at least one survives. Investors often ignore boards of directors and look to management during times like these. But at this juncture, you can no longer blame management at either company for further missteps and stagnation. Direct your discontent to the boards at Best Buy and Radio Shack.
Because it appears that Radio Shack's board intends to stay with the status quo in management, they rank a notch below Best Buy in ineptitude. Radio Shack President and CEO James Gooch has been with the company for six years, first serving as CFO before moving into the leadership roles in early 2011. Bad move. While Gooch is young -- just 44 years old -- wholesale turnarounds require fresh blood, particularly when you're up against the strategic, competitive threats Radio Shack faces. Along those lines, Best Buy's board finds itself at a seminal moment. What it does today with its CEO search will dictate whether the company lives or dies. BBY shareholders should send their cards, letters and emails to James Citrin of the executive search firm Spencer Stuart. While Citrin leads the headhunting effort, the Best Buy board ultimately makes the call. Given that the average age of Best Buy board members is about 59, it should come as no surprise that it's leaning toward hiring a seasoned executive for the role. That's the standard move tired and stodgy retail companies that really need to think like tech companies make time and time again. It's a mistake. In this case, hiring a "seasoned executive" could also equal permanent placement on death row. JC Penney ( JCP) thought it made a progressive move when it lured Ron Johnson away from Apple ( AAPL) to become its CEO. It didn't. It used poor intuition. Steve Jobs, not Ron Johnson, deserves credit for Apple's retail success. If Steve Jobs was crazy enough to become CEO of a company like JCP, he would have focused, headed into the heart of a hurricane, tore the department-store model apart and put it back together again. Few people have the ability to envision, incite and implement such profound change. Ron Johnson certainly doesn't. Johnson, like politician talking about taxes, looks to remake JC Penney within the confines of a broken system. That's his first mistake. He kept the same bigger-picture pricing structure, the same standard brick-and-mortar floor plan, the same mold. Johnson might have broken a rule or two, but he did so within the established way of operating. Jobs would dictate a new way of doing business, a way unrecognizable from what came before it. That's what Jobs, not Johnson, did at Apple.
As I noted back in May here at TheStreet, Best Buy May Have Already Found Its New CEO. Here's a follow-up question for the BBY Board: What in the world are you waiting for? You can read my article to learn more about Stephen Gillett, but, in a nutshell, he is a Silicon Valley guy, not a retail lifer. And he is not a "seasoned executive." He is, however, the type of person Best Buy needs as its next CEO. He's thinks like a tech guy. He never would have made the bonehead moves Ron Johnson made upon taking over at JCP. He is well regarded. Best Buy must think highly of him. Gillett, named executive vice president and president of Best Buy Digital and global marketing and strategy in March 2012, already heads up a growing laundry list of crucial areas. It seems that, on some level, he simply lacks the official title of president and CEO. Why hire somebody else who could, in effect, trigger yet another transition Best Buy absolutely does not need?
RIM and NokiaSurvival at RIM and Nokia also starts at the top. While RIM chose to hire the uninspiring Thorsten Heins from within, Nokia stepped out and grabbed a non-Fin, Stephen Elop from Microsoft ( MSFT). Elop's moment of truth should come in the months after Ryan Seacrest rings in 2013. Nokia made its choice, it got gutsy on us and can't look back. Frankly, if it fails, I would not pile on the company. It made the necessary changes: It blew out management in relatively quick fashion, dumped the Symbian platform and partnered with Microsoft. You really cannot ask for much more given the depths to which the company fell. RIM, meantime, went from two CEOs who refused to acknowledge the company's problems to one living in an equally abhorrent state of misleading denial. If I was a member of RIM's board, I would have told Heins not to not enter headquarters again unless it's over my dead body. Why? This pathetic comment:
There's nothing wrong with the company.That statement requires no context. It's patently absurd. Unless Heins made it sarcastically, angrily or in self-deprecating fashion as part of raging tirade that started with things being thrown and ended in tears, those words should not come out of anybody's mouth who has ever heard of RIM, let alone one of its executives. We live in a new world. One that blurs the lines between companies such as RIM, Nokia, Radio Shack and Best Buy. Sure, they operate in different spaces, but, increasingly, they require the same types of strategies, attitudes and corporate cultures. Boards ought to look to perpetual start-ups and the next generation of CEOs from places like Silicon Valley when they're in do-or-die situations. Follow @RoccoPendola At the time of publication, the author was long MSFT and NOK. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.