119 – Don’t do your block buster
Filed in Anecdotes, Business storytelling, Corporate Storytelling, Podcast
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Going with your gut is likely to lead you down the wrong path. Listen to hear how ignoring the data led to Blockbuster’s demise.
In an Anecdotally Speaking first, this week’s episode is a solo episode with Shawn as host! He shares a story from Gina Keating’s book, Netflixed: The Epic Battle for America’s Eyeballs, which follows the period in which Blockbuster went from being at its peak, with some 9,000 stores worldwide, to declaring bankruptcy.
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For your storybank
Tags: bias, competition, complacency, data, ideas
This story starts at 00:00
In 2004, Blockbuster was at its peak with some 9,000 stores worldwide. But, in 2007, the company reached a turning point. Netflix had become a serious competitor, other competitors were emerging, and there was a downturn in the economy. Blockbuster was struggling.
The team considered building an online service to compete with Netflix. COO Nick Shepherd was pushing the idea, but CEO John Antioco didn’t love it.
Antioco soon retired, and Jim Keyes replaced him. Keyes had turned things around for 7-Eleven following a difficult period. The company hailed him a hero.
Keyes had a clear idea of what he wanted to do with Blockbuster; what he thought would make the company great again. Blockbuster stores lay at the epicentre. They would become entertainment destinations, selling food and electronics.
Blockbuster’s executives knew they had tried this before, and each time it had failed. They presented their data to Keyes, but reports were returned to them unopened. He wasn’t listening. Those same executives soon left the company, opting to purchase Netflix shares with their payouts.
So Keyes went ahead and put a lot of money into upgrading and renovating Blockbuster’s stores. He ignored an opportunity to acquire Netflix and offers from Netflix to purchase Blockbuster subscriber lists.
Within three years, Blockbuster issued a bankruptcy warning due to drops in revenue and an inability to repay debts. On the 1st of July, 2010, Blockbuster was delisted from the New York stock exchange. And on the 23rd of December, 2010, Blockbuster filed for Bankruptcy.
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Thanks Shawn
So what do you think the the executives should have done to cut through to the board and the CEO?
There would be a lot of ego in the room. So it would be a tough assignment. I think they would need to do something to trigger a new story with the CEO and board. Perhaps an excursion to Blackberry and a conversation with their CEO. Storytelling would help but first-hand experience is better. They were up against the first-hand experience of the CEO who just successfully turned around Seven-11 around.