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Good to Great to Gone

Book Description

How did Circuit City go from a Mom and Pop store with a mere $13,000 investment, to the best performing Fortune 500 Company for any 15-year period between 1965 and 1995, to bankruptcy and liquidation in 2009? What must leaders do not only to take a business from good to great, but to avoid plummeting from great to gone in a constantly evolving marketplace?

Alan Wurtzel, son of Circuit City founder Sam Wurtzel, took over as CEO in 1972 and implemented a successful long term strategy that simplified the company by unloading unsuccessful acquisitions, expanded the few winning divisions, and preserved the distinct employee culture his father created, positioning the company for unprecedented success. For almost 50 years, Circuit City was able to successfully navigate the constant changes in the consumer electronics marketplace and meet consumer demand and taste preferences. But with the subsequent decline and ultimate demise of Circuit City in 2009, Wurtzel had the rare perspective of a former company insider in the role of an outsider looking in.

Believing that there is no singular formula for strategy, Wurtzel emphasizes the “Habits of Mind” that influence critical management decisions. With key takeaways at the end of each chapter, Wurtzel offers advice and guidance to ensure any business stays on track, even in the wake of disruption, a changing consumer landscape, and new competitors.

Part social history, part cautionary tale, and part business strategy guide, GOOD TO GREAT TO GONE: THE 60 YEAR RISE AND FALL OF CIRCUIT CITY features a memorable story with critical leadership lessons.

Table of Contents

  1. GOOD TO GREAT TO GONE: The 60 Year Rise and Fall of Circuit City
  2. Copyright
  3. Dedication
  4. PROLOGUE: BANKRUPT
    1. Turning Points
    2. Habits of Mind
  5. PART I: GOOD (1949-1970)
    1. CHAPTER ONE: DISCOVERING THE OPPORTUNITY
      1. The Real World in the ’50s
      2. Inventing the Business Strategy
        1. Selling Strategy
        2. Merchandising Strategy
        3. Out-of-Town Stores
        4. Data Processing
      3. Habits of Mind
    2. CHAPTER TWO: SETTING THE VALUES
      1. Customer Values
      2. Supplier Values
      3. Employee Values
      4. Human Resource Policies
        1. Theory X and Theory Y
      5. Sam’s Personnel Rubrics
        1. Hiring: Who Gets on the Bus?
          1. Talent Trumps Experience
          2. Interpersonal Skills are Essential
          3. Make Hiring a Priority
          4. Never Hire a “Warm Body” Just to Fill a Slot
          5. Have Multiple Interviews With Shared Feedback
          6. Promotion and Demotion: Where Do They Sit?
          7. Promote from Within
          8. Provide Training
          9. Coffee Conferences: Organized Employee Feedback
          10. Make Hard Work Fun
          11. Fair Compensation; No Negotiation
          12. Making Incentives Work
          13. No Vacation Policy
        2. Firing: Who Gets Off the Bus?
          1. Freedom to Fail
          2. Downgrades with No Pay Cut
          3. Separate from People Gently
          4. Discharge as a Win-Win
      6. Habits of Mind
    3. CHAPTER THREE: PUTTING THEORY INTO PRACTICE
      1. The Real World in the ’60s
      2. Wards Joins the Discount Revolution
      3. Going Public
        1. Licensed Department Expansion
        2. Why It Worked: Better Format
        3. Why It Worked: Better Systems
        4. Building a Board
      4. Undisciplined Pursuit of More
        1. Carousel Stores
        2. Hardware/Houseware Departments
        3. Joining the AMEX
        4. Enter Alan
        5. Custom Hi-Fi
        6. The Mart
        7. More and More
        8. Train Wreck
      5. Habits of Mind
      6. Lessons Learned
  6. PART II: ALMOST GONE (1971–1977)
    1. CHAPTER FOUR: RUDE AWAKENING
      1. The Real World in the ’70s
        1. Consumer Electronics and Appliances
      2. Creating a Strategic Plan
        1. Relevant Trends
        2. Basic Principles
        3. Strengths and Weaknesses
      3. Wards Hits the Fan
        1. Do It Yourself Reorganization
      4. Habits of Mind
      5. Lessons Learned
    2. CHAPTER FIVE: BUILDING THE TEAM
      1. Who Gets on the Bus
      2. Who Gets off the Bus
      3. Creative Hires
      4. Develop a Learning Culture
      5. Managing Execution
      6. Management Style
      7. Habits of Mind
    3. CHAPTER SIX: GROWING AGAIN
      1. Audio Stores
      2. Circuit City Electronics Stores
      3. Warehouse Showrooms
      4. Refining the Consumer Offer
        1. Consumerism
        2. Clarity of Mission
        3. Ready to Grow
      5. Habits of Mind
  7. PART III: THE GREAT YEARS (1978–2000)
    1. CHAPTER SEVEN: RAMPING UP, 1978–1986
      1. The Real World, 1978–2000
      2. Electronics and Appliances
      3. Superstore Expansion
        1. Superstore Rollout
      4. Restoring the Balance Sheet
        1. The Lafayette Acquisition
        2. California Here We Come
      5. Change at the Top: Theory
      6. Improving the Infrastructure
        1. Strengthening MIS
        2. Strengthening Distribution
        3. Strengthening Human Resources
      7. A New Name
        1. Change at the Top: Practice
      8. Habits of Mind
      9. Lessons Learned
    2. CHAPTER EIGHT: GOING NATIONAL (1987–1994)
      1. Sharp’s Vision
        1. Dominant Market Share
        2. More Markets
        3. First-Mover Advantage
        4. Downside of Rapid Growth
        5. Superior Customer-Buying Experience
        6. Answer City
      2. Superior Credit Availability
      3. Superior Gross Margins
        1. Drawbacks to “Margin Mania”
      4. Superior Technology
      5. Sharp’s Team and Style
      6. Next Growth Vehicles
        1. CarMax
      7. DIVX Diversion
      8. Habits of Mind
      9. Lessons Learned
    3. CHAPTER NINE: TROUBLE IN THE CITY (1995–2000)
      1. Gathering Clouds
      2. Rise of Best Buy
      3. Response to Changing Competition
        1. 1991 Three Year Plan: Denial
        2. 1993 Three Year Plan: Anger
        3. 1995 and 1997 Three Year Plans: Bargaining and Depression
        4. The 1999 Three Year Plan: Acceptance
        5. Progression
      4. How Circuit City Lost its Way
      5. Role of the Board
        1. The Sharp Board
      6. Sharp’s Legacy
      7. Habits of Mind
      8. Lessons Learned
  8. PART IV: GONE (2001–2009)
    1. CHAPTER TEN: GOING 2001–2006
      1. Turning Point
      2. The Real World 2000–2005
      3. The 2001 Three Year Plan
        1. Need for a Credible Plan
      4. Addressing the Strategic Issues
        1. Marketing
        2. Store Redesign, Relocation, and Staffing
        3. Design Conundrums
        4. Ready, Fire, Aim
        5. Florida Fiasco
        6. Petersburg Prototype
        7. Applying the Petersburg Lessons
        8. Appliances
        9. Band Aids and Chewing Gum
        10. Store Relocations
        11. Faulty Metrics
        12. A Better Way to Face the Brutal Facts?
      5. Sales Force Productivity
        1. Hollowed-Out Training
        2. Backing into the Future
      6. Merchandising
        1. Counterculture
        2. InterTAN
        3. New Blood
      7. Supply-Chain Management
        1. Point of Sale
        2. Inventory Management System
      8. Legacy Issues
        1. CarMax
        2. Bank Credit Cards
      9. The McCollough Years
        1. Need for an Operational Plan
        2. Management Style
        3. External Style
        4. Internal Style
      10. New Leadership
      11. Habits of Mind
      12. Lessons Learned
    2. CHAPTER ELEVEN: GONE 2007–2009
      1. The Real World 2006–2009
      2. Innovation
      3. Schoonover Initiatives
      4. “Win in Home Entertainment”
      5. In-Home Service
      6. Multi-channel Integration
      7. Real Estate: the City Stores
      8. Maintaining the Culture
        1. Sales Commissions: Shooting Yourself in the Head
        2. Management Style
      9. Role of the Board: 2000–2009
        1. Governance Failures
        2. Succession Failures
        3. Mergers and Acquisitions Failures
        4. InterTAN
        5. Acquisition Overtures
        6. Cash Management Failures
        7. Cash Crisis
      10. Last Tango
      11. Last Gasp
      12. A Perfect Storm
      13. Habits of Mind
      14. Lessons Learned
  9. EPILOGUE: THE LEGACY
    1. Habits of Mind Revisited
      1. The Legacy
  10. ACKNOWLEDGMENTS
  11. NOTES
  12. TABLE OF CHARTS
  13. Connect with Diversion Books