First Borders, then Barnes & Noble CEOs make the wrong leadership decisions.
Borders was founded by two brothers; Tom and Louis Borders, in 1971 in Ann Arbor, MI. As the business grew, it was time for the Borders brothers to hire a professional CEO. Tom Borders told me that they decided to hire a CEO whose experience was in retailing versus a strategic marketing expert. That executive decision began the downfall of the company.
The new retail-oriented CEO decided to close down their website, fire their internal website experts and contract out information technology by having their books sold through Amazon.com. Unfortunately, the Borders CEO didn't recognize that the Internet was changing everything...including the book retail business.
Eventually, Borders was acquired in 1992 by Kmart Corp, which married Borders to its Waldenbooks unit. Three years later, Kmart took the two book chains public as the Borders Group. But business trends proved Borders' strategy wrong. While sales at U.S. bookstores have sagged, online book sales soared.
Two weeks ago Barnes & Noble Inc. scratched its big ambitions to become a player in the tablet hardware business. On Monday, the retailer's CEO was out the door.
Barnes and Noble's CEO has stepped down amid Nook losses. William Lynch resigned as chief executive, effective immediately, in the wake of last month's news that losses at the bookseller's Nook digital business had more than doubled for the quarter ended April 27.
Mr. Lynch had been named chief executive in March 2010, having previously run the company's website. He focused his energies on the emerging digital books business and building a family of dedicated Nook digital devices, including color tablets. Although Barnes & Noble has succeeded in selling e-books, it struggled in the hardware business.
Bottom Line: The Borders CEO was blind to future impact of paper and ebooks being sold through the Internet whereas the Barnes and Noble CEO focused on developing eReader/table hardware rather than focusing on integrating ebook and other online sales opportunities with the company's retail stores.
For Barnes & Noble to remain successful as a bookseller, the company must sell ebooks in all formats; in order to satisfy the consumer's need to have the ebook fit easily into whatever eReader, tablet, smartphone or computer currently being used.
Unfortunately, Barnes & Noble Inc. had separated their book stores business from their digital business: putting the digital devices, ebooks, and a chain of 686 college bookstores into a separate corporation called Nook Media LLC.
Booksellers, like any other business, must have Strategic Leadership to Prosper
Many in management mistakenly assume that leadership style is always a function of personality rather than strategic choice. Their leadership style is based upon their innate signature talents and this represents their default leadership behavior. However, leaders can choose a different leadership style that best addresses the demands of a particular situation.
Being unaware that we can change our leadership style to match the situation at hand, we unconsciously engage our default behavior. Only when we become aware of something, are we able to make choices as to the action we wish to take.
Cultural situation awareness begins with capturing accurate and deliberate business intelligence using the very best diagnostic measurements and precision tools.
Today, the Internet allows management to know 'what's happening now' across the enterprise. Since people represent 50-80% of organizational costs and are a flexible resource through learning and innovating, engaging them for enhanced productivity is why effective leadership matters.