Aram Zucker-ScharffDec 29, 2022

I've seen a bunch of people sharing this and repeating the conclusion: that the success is because the CEO loves books t/f you need passionate leaders and... while I think that's true, I don't think that's the conclusion to draw here. The winning strategy wasn't love, it was delegation and local, on the ground, knowledge.

This win comes from a leader who acknowledges people in the stores know their communities and can see and react faster to sales trends in store...

https://tedgioia.substack.com/p/what-can-we-learn-from-barnes-and

What Can We Learn from Barnes & Noble's Surprising Turnaround?

Digital platforms are struggling, meanwhile a 136-year-old book retailer is growing again. But why?

The Honest Broker
Show threadAram Zucker-ScharffDec 29, 2022

It's a mistake to assign the value being created here to the CEO, all he did was realize upper management needed to step out of the way & remove the bad incentive structure that stopped local stores from making their own decisions.

It's the realization the people in the bookstore are going to know what sells faster than execs waiting for a report in HQ and it's acknowledging that people who work in bookstores live in their communities and understand how those communities work & what they like

Show threadAram Zucker-ScharffDec 29, 2022
The lesson you should take from this parable as a manager isn't about passion, it's about what your job is: unblock your employees, trust the people you hired for their capability to manage your front lines, and a million analysts can't beat on the ground real-time knowledge. Especially when it comes to community businesses like bookstores, the most detailed knowledge and complex models aren't going to create a better plan to work with the community than the people in the community.
Show threadAram Zucker-ScharffDec 29, 2022

This story is basically an indictment of enormous corporate structures, huge national and international companies, centralized corporate power, and overloaded management. For B&N they clearly don't work. Not for pricing, stocking, shelving or marketing.

The win here is a CEO who realizes his most valuable action is to get out of the way.

It should be shocking to read that the winning revelation for B&N was: let employees do their jobs.

Now you gotta pay them more.

Show threadelle mundyDec 29, 2022
@Chronotope incredible. now that the ceo is out of the way, what do we need him for again?
Show threadJake MillerDec 29, 2022
@exchgr @Chronotope Two things. First, he made good decisions here. He is likely to continue to do so. This is leadership to the entire company, and he will have credibility to make other good decisions that defy conventional financial wisdom. In his absence, the company would relapse. Second, he’s likely to understand better than others that workers aren’t just there for minimum wage but bring value to the company and should be treated as valued contributors.
Show threadelle mundyDec 29, 2022

@jakemiller @Chronotope seems paradoxical to me.

“he made good decisions” sure, but the decision was to stop making decisions and get out of the way. what if he was always out of the way?

“defy conventional financial wisdom” i don’t think so, making more money is usually welcome.

“he’s likely to understand better than others” better than who? the workers who know they need more and will work for it?

Show threadJake Miller
@exchgr @Chronotope Oh, it is paradoxical. They are doing better by turning down free, guaranteed money (from publishers).
Someone was making decisions about which books to promote, and how to operate stores. He took power *away* from them. He reduced the power of people at HQ. He empowered the lowest-paid people in the company. These are deliberate and sweeping decisions. A centralized structure’s reward systems create incentives to suck more power into its core.
Dec 29, 2022 at 3:23pmWeb
Show threadJake MillerDec 29, 2022
@exchgr @Chronotope Does the company seek to earn more? Yes. But not in this way!
The “others” I mean are the next CEO, or Board Chair, or whoever else we would imagine would make corporate structure and power allocation decisions. Very few candidates would reach this conclusion - as evidenced by the fact that this is news!
Show threadelle mundyDec 29, 2022
@jakemiller @Chronotope exactly. what i know from experience is that the bread and butter of every company is concretely empowering workers and being responsive to customer needs, which is a circular dependency. central command hierarchies thwart this at every turn and guarantee failure, even if the short term looks better. so why not cement worker power?
Show threadelle mundyDec 29, 2022
@jakemiller @Chronotope a ceo is a decision-making bottleneck at best, and a malevolent tyrant at worst. and yet they make the most money in most companies!
Show threadJake MillerDec 29, 2022
@exchgr @Chronotope Daunt is doing something interesting, and subtle. The ultimate decentralization is to spin off stores. He’s decentralizing many merchandising, selling, purchasing decisions. But size and centralized finance give purchase power vs publishers. It provides capital to open new stores. He’s been deliberate in his choices. Based on Ted’s blog, it sounds like Daunt has added value by knowing what should be centralized or not, and implementing.
Show threadelle mundyDec 29, 2022
@jakemiller @Chronotope there are certainly short term gains to be had by concentrating power and using it well, but i think ultimately it ossifies and weakens the organization. it’s difficult to respond with agility to an inevitable change in market demands if your main revenue stream comes from one or a few sources like that, even with the best of intentions
Show threadJake MillerDec 29, 2022

@Chronotope @exchgr One of the important roles of a corporate leader is to resist things that are short term gains with higher long term costs.

How the leaders think about business is key. Daunt prob sees books as highly differentiated, thus needing nuance to sell. The other model treats them as interchangeable commodities. Old industrial thinking: obviously, disempower front line!

New stores will always take $$, so size is critical to secure that and to grow.