Last week I commented on the Sears/K-Mart “Death Spiral” and suggested that you watch that situation closely. If you took my advice, you’re probably aware of the fact that Sears Holdings Corp. abruptly announced the departure of their President and CEO Aylwin Lewis, leaving a management void at the top of the organization as it tries a high-stakes restructuring to reconnect with customers and reinvigorate slumping sales.
Doing so is an enormous challenge, if not downright impossible, as the retailer has been bleeding customers since Sears and K-Mart joined forces back in 2005. For the first three quarters of the year, their profits have fallen more than 40%, and earlier this month, they posted 3rd quarter earnings at just $2 million—down 99% from last year.
These trends remind me of the last days of Montgomery Ward. When their declining course became evident to most everyone, the majority of retail shoppers still felt Ward would survive. After all, they had been around for what seemed forever. And yet they’re gone. And now we see Sears/K-Mart—at one time the number one and two retailers in the country—facing the same “Death Spiral.”
There’s a valuable lesson here for the entire business world regardless of your industry, product and/or service. You simply can’t afford to:
- Lose your focus.
- Lose touch with your customer’s wants and needs.
- Lose touch with your internal customer’s wants and needs.
- Lose touch with technological advances.
- Lose touch with your competition and what they’re doing.
- Lose the customer loyalty you’ve established.
- Stop making the necessary changes in areas which demand those modifications.
Start LOSING these things and you begin to take on the characteristics of a LOSER. History teaches us that this label is very difficult to overcome. Some have done it successfully but most have failed and slipped into oblivion. Trying to restructure, to reconnect with customers and reinvigorate slumping sales is certainly a herculean task. Taking on such a venture in today’s challenging economic climate simply intensifies the challenge, making it near impossible to achieve.
This might be an excellent time to take inventory of your own organization while you still have an opportunity to pro-actively change course if needed. Don’t wait until it’s too late. Talk to your employees, customers, vendors and anyone who may enlighten you as to your current status in today’s very competitive marketplace.