Saturday, November 22nd, 2014

Change Leaders Do Not Dance on Graves—Not Even On Barnes and Nobles’

In today’s Wall Street Journal, columnist L. Gordon Crovitz writes about the challenges facing Barnes and Noble, the USA’s biggest bricks-and-mortar retail bookseller. His editorial “hook” for the article is the recent news that the board of Barnes and Noble has authorized the sale of the company.

The comments I posted on his article at WSJonline.com are below. However, Mr. Crovitz’ article raises an important point that applies generally to business and to the discipline of change leadership. That is, dancing on graves is not required to drive change. Effective change leaders evolve their businesses and capture opportunities, rather than watch their business erode as the inevitable tides of change inundate their companies and, on a personal level, their careers.

Americans apparently relish in the failure of others in an effort to comfort themselves about their own failures. As evidence, I cite the success of American Idol’s Simon Cowell and the multitude of other elimination contests that are all the rage on television. But, change leaders do not celebrate other people’s failures. Nor do they lament their competitors’ successes. True change leaders look forward, not backward. They see the potential opportunities, not the potential failures. And they celebrate success, not failure.

There is an opportunity for someone to evolve Barnes and Noble into a valued community and industry asset. Personally, I wish them success!

Brett’s WSJOnline Comment:

Gordon, it is too soon to write Barnes and Noble’s obituary. There is no question that ebooks will out soon outsell printed books. But, Barnes and Noble and its peers will only die if they do not evolve.

The sale of Barnes and Noble and stock analysts’ complaints that have been weighing on the stock price are as much about the actions founder and CEO Leonard Riggio has taken to allegedly enrich himself at the expense of other shareholders as they are about the book industry itself. If Riggio takes the company private, he will be highly motivated to build Barnes and Noble into a competitive and valuable player in the new, emerging world of electronic content. The current ownership structure, where investors play a zero-sum game to take money away from each other, is not conducive to making the investments required to build a great company.

Assuming either Burkle or Riggio takes Barnes and Noble private, the victor will have a good chance of success. Barnes and Noble has far more assets to draw from than many startup and LBO success stories. Other than B&N’s previous investments in B&N.com and the Nook ereader, perhaps the biggest opportunity is the ability to fully exploit the prime retail locations it has amassed over the years.

As I write this, I am, in fact, sitting in the Starbucks at my local Barnes and Noble. The line at this Starbucks never abates. Why not? Partly it is a great location. But, also because of the “experience” and “social” aspects. People come here to meet, to read, to work. As I wrote in my article titled, “The Book Publishing Industry is Dead, Long Live Publishers” (http://sellingchange.com/discussion/book-publishing-industry-is-dead/ ), people will always pay for the experience. If Burkle or Riggio realize they are not in the book business, but rather in the experience business, they can utilize B&N’s great retail space to create those experiences. For example, yesterday I went to the Sony Store. I’m not a big fan of Sony’s antiquated, over-priced brand, but they certainly were trying to make the Sony Store an experience rather than a pile of products. Of course, the reigning king is the Apple store. The fact that Apple even has physical stores is testament to the role they play in building brand, creating experiences, and even–selling products.

Yes, the owners of Barnes and Noble, whoever they will be, may very well fail in capturing the opportunities available to Barnes and Noble. But, their fate is by no means certain. As always in business, the only way they can fail with 100% certainty is not to try.

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