Extra Points: Want to Avoid the Fate of Struggling Barnes & Noble? Be a Business Innovator, Not a Follower

by

Christopher Schobert
Director of Communications
June 21, 2019
/
3
minutes to read


Pointman’s Extra Points series highlights lessons in leadership inspired by today’s headlines.

TAKEAWAY: The struggles of Barnes & Noble show that business owners need to always be proactive, not reactive, in order to successfully grow and prosper.

Barnes & Noble is struggling, and that’s not breaking news. The announcement that the bookstore chain’s days as a privately owned company are coming to close — following its purchase by investment firm Elliott Management Corp. — has been a long time coming.

Going private could turn out to be exactly what the retailer needs. As CNN reported, “now that Barnes & Noble will be a private company, it no longer has to worry about quarterly sales reports and continued unfavorable comparisons to Amazon from Wall Street.”

Still, this is another sad development for B&N, a store that, as the AP put it, spent the 1980s and 1990s on a quest to “gobble up other larger booksellers.” Yet as time passed, Barnes & Noble found itself in a losing battle with the mighty Amazon.

The retailer’s fate offers some powerful lessons for business owners.

Photographer: Eric Thayer/Bloomberg

Innovate, don’t follow.

As the Bloomberg story explains, “Barnes & Noble tried (but mostly failed) to keep pace with Amazon. Pressure only intensified after Amazon started to open physical book stores of its own. The company's Nook e-reader device was also a flop, never catching on in the way that Amazon's Kindle did.”

It’s always vital to watch what your competitors are doing. (We discussed this topic in a recent “Extra Points” post.) But their moves do not have to dictate yours. Don’t get stuck following the competition. Instead, seek ways to innovate on your own.

Easier said than done, right? Maybe. But it all comes down to vision and planning. Focus on long-term goals, not short-term bumps.

Be quick to adapt. But adapt in the right ways.

In 2017, it was already clear that B&N was way behind Amazon: “Fundamentally, there is a mismatch in digital between consumer expectations, current technological offerings, and what a given company like B&N delivers. ... Failure to adapt to customer expectations results in a decrease in brand loyalty and diminishing sales.”

This is not unique to Barnes & Noble — think Blockbuster’s failure as Netflix brutally Thanos’d video stores across the country. But the bookseller was especially slow to react to Amazon’s increasing dominance. And when B&N did react, it felt like imitation.

See below for a key reason why …

Remember what you do best.

Every few weeks or so, I end up at Barnes & Noble with my kids. Most of their time is spent looking at Legos and American Girl dolls, while mine is spent trying to talk my way out of dropping significant cash. Do you know what we don’t spend too much time looking for? Books. We get those from school book orders, from local booksellers and, of course, from the mighty Amazon.

At some point, Barnes and Noble moved away from being known simply as a bookseller. And there were legitimate reasons for that. However, becoming known more for Funko Pops and muffins than books meant the store’s identity was blurred beyond recognition.

When you started your business, you had a specific skill in mind. Whether you run a plumbing, HVAC, electrical company or something else, you knew homeowners could rely on your expertise and skill set. Don’t forget what got you into business in the first place. And never run from what you do best.


Perhaps the greatest lesson here is to always be proactive, not reactive. It’s a trait we see in our Pointman members — recognizing that it’s time for a change, determining what will help, and choosing a growth solution that offers software and also coaching. Remember, you don’t need to take this journey alone.

Look at Pricing

The start of the year is a great time to look at pricing. Usually, you have an idea of how your company fared the year prior, and you want to ensure you will continue to grow in the months to come. Many of us make New Year’s resolutions with respect to spending or saving in our personal lives, and it’s no different for business owners. Making sure your pricing is in line with where it should be is one of the strongest ways to start the year the right way.

Part of looking at your price book is finding where the issues are, and that can take time. An HVAC company in January is going to be very busy, so it’s a difficult time for a close look. However, a plumbing company might not be as busy. Whenever you tackle this job, your best bet is to look at what your labor rates are. Start there, and let it trickle down across the board. Ask yourself, “Are my labor rates helping my business stay profitable?”

Remember, there are many different services out there and many different groups or communities that you can engage. Never hesitate to say, “Hey, I’m a business owner in Florida. What should my labor rates be?” You can build your price from there. There are also some great billable hour calculators available.

Set Goals

There is no better time of year for looking inward than January. Set your personal goals and company goals for the following 12 months. If you can break those down into departmental goals, even better! Perhaps that means a CSR booking closing rates a little better, or a truck doing 250,000 a year rather than 200,000.

Many companies have found that using an Objectives and Key Results (OKRs) goal-setting system pays off. Looking for a guidebook when it comes to OKRs? Check out Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs by John Doerr. 

One key question is the best way to handle setting goals: Is it smarter for business owners to handle this solo, together with staff, or to delegate completely? 

The best approach is to set goals at the department level. As an owner, you need to take the time to understand what the goals are in each department, and make sure they are in line with your goals for the company. No one likes to set unattainable goals for themselves, so make sure you push your departments to set goals that are lofty, rather than simple ones to feel good about hitting. Entrust your staff to aim higher, and watch how they respond.

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