Img 20140403 Sundar John Harvard

Sears does not have an internal entrepreneur, or if they do that activity is being stifled.

In February the Wall Street Journal reported (WSJ 2/9/16): “Sears Looks to Sell More Assets After Weak Holiday Quarter.” The conclusion is, Sears does not have an internal entrepreneur, or if they do that activity is being stifled.

What is the reaction of Sears to this crisis? They are using a traditional management technique from the lower left hand corner of the Donovan Model; that is, they are cutting costs. While this strategy may be useful in the short term, it is a terrible long term strategy: you cannot starve yourself to success!

This struggling retail chain needs to explore entrepreneurial opportunities to reignite its business. With revenue down they need to lead their customers into what they need today and tomorrow, not what the customers think they need.

Specifically, for Sears, the vertex in the Donovan Model has moved. For Sears they have changed dramatically, twice. When I was a boy, it was Christmas every day when I read through the Sears catalog and dreamed of the tractors and tools there. Sears improved their businesses by producing larger catalogs, more mailings, and better photography.

However, the lines in the Donovan Model moved. The internet allowed for supply chain management (supply chain management was a supply chain disruption). Sears didn’t leverage this technology as quickly as Walmart did, for example. I helped Walmart implement this with my company Cambridge Technology Partners (CTP), which in 2002 merged with Novel at $5B.

In the 1990’s, another technology disruption occurred: business on the web (I formed a company Business@web which went public at $250MM). Sears did not have an entrepreneur to move the company into this space. Walmart did.

So the question is, what should Sears do now? I suggest that we have a strategic discovery session bringing in a team from the Sears to assess the company’s lazy assets, develop a business case and pilot, and present those results to senior management. As always in my workshops it is critical that the company employees themselves do that presentation so that they will be able to help facilitate the massive change necessary for Sears to succeed. Trust is one major impediment to change, and senior management will likely trust their own employees.

In my upcoming book “The Entrepreneur” I give a list of areas where the entrepreneur can find new business opportunities. These areas include:

  • Lazy assets
  • Continually add value
  • Business disruption
  • Technology disruption
  • Enter into smaller (niche) markets
  • Enter into related new businesses
  • Enter partnerships
  • Expand to other geographies with respect for local markets
  • Increase efficiency
  • Look at partners and customers and identify where you can provide value
  • Compete with yourself

As an example let’s look at lazy assets. Sears has real estate all over the country. How about turning parts of those buildings into entrepreneurial accelerators?