I read with some interest today that Circuit City, the consumer electronics retailer, is filing for bankruptcy. It was interesting because just a few years ago, Circuit City was cited by management expert Jim Collins in his landmark book Good to Great as an example of a small handful of companies that were “great” organizations outperforming their competitors.
It goes to show just how quickly things can change in a fast-paced economy and a fickle consumer marketplace.
But Circuit City’s bankruptcy filing was also reminiscent of a major move the company made in March 2007. At that time, they laid off 3,400 skilled workers in order to hire unskilled, low-paid employees. That huge drain of knowledge and expertise—so crucial to a fast-changing field like consumer electronics—left remaining employees dismayed and customers abandoned.
If you’ve ever gone into a store to make a tech purchase, you know how important accurate information is, information from real humans who know what they are talking about. It may be that Circuit City sowed the seeds of its own bankruptcy a year and a half ago.
Perhaps that was the day they ceased to be “great.”