Sunday, July 24, 2011

Charles R. Morris comments on Borders

We are honored to have a guest comment emailed from Charles R. Morris – author of a dozen books including The Trillion Dollar Meltdown, The Tycoons, American Catholic, The Surgeons: Life and Death in a Top Heart Center, and The Cost of Good Intentions. Charlie – my friend for many years – astutely and forgivingly adds explanatory depth to my recent post on the collapse of Borders.

I thought your Borders post started strong, but faded.

Not your fault. You nailed the problem, but then imply that the solution was obvious and doable, and it’s not about selling ‘ideas.’ The truth is that it’s almost impossible to make a wrenching change in a successful business model, until it’s too late – for the reason that you don’t know how. Xerox still hasn’t done it, nor has Barnes & Noble. IBM did it twice, which is impressive and rare.

About twenty years ago B&N and Borders revolutionzed book selling by killing off the mom and pops, opening large well-lit stores, with plenty of room for, and encouragement for, browsing and lingering. I did a book tour in 1993 in California, and was stunned at these stores. The events were invariably well-planned. I could find my books easily, they kept print runs in stock far longer than the mom and pops because they had the space, etc etc. The NY literati mocked them for mass marketing and made fun of them in movies like 'You’ve got Mail’, but they were a boon for the publishing industry.

Then Amazon started to sell books without bookstores, and made a smash hit out of it, and was a leader with the Kindle. And then it was the erstwhile rebels who were scrambling to rediscover their raison d’etre, and not finding much.

Because Amazon was at heart a Seattle technology company, not a book store, the path to paperless ’books’ was a lot easier. When the business model changes to one that favors the upstart, the proper course for the old-model company is usually not to emulate the startup, but to give the money back to its stockholders and just quietly die.

Charlie: Thanks for this wise commentary.



Larry Ackerman said...

I find Charlie's explanation pathetic. If that's the course of business competition, then why bother getting up in the morning?

His comments are fatalistic and don't seem to mirror what IBM and others have managed to do over time.

Seems there's no room for true innovation on the part of existing organizations, according to the gospel of Charlie.

brandsinger said...

Hi Larry -
Well, as Charlie writes, IBM was able to change its model -- but is among the rare companies to do so in the face of revolutionary change. You can see the impact of destructive change if you look at the US auto industry, domestic textiles, countless retailers like the Wiz, US shipbuilding, family farming... and on and on. Changing your model ain't easy. Your basic corporate identity can hold you in a static grasp.

My original point was that Borders was wedded to physical books... which narrowed their potential to chart a successful new future.

As for getting up in the morning, engaging big brains like yours and Charlie's is better than caffeine!


Anonymous said...

Alas, how I wish some clients would just give the money back to their shareholders and quietly die... Branding can only do so much in the absence of a credible business strategy...