Lessons from Alan Wurtzel – Circuit City – Part 3

Be sure to read What Happened to Circuit City Part I and Part II of this blog post, which discusses the rise of Best Buy and fall of Circuit City.

Alan Wurtzel opens his book Good to Great to Gone with this quote by William Knudsen, “In business, the competition will bite you if you keep running; if you stand still, they will swallow you.” And, while that may be the most important lesson Wurtzel teaches us about Circuit City, he also leaves us with many more lessons – and I am grateful.

Good to Great Lessons

When Jim Collins writes about Level-5 leaders, he often refers to Wurtzel. Collins believes this type of leader has a unique blend of “personal humility and professional will.” Collins credits Wurtzel with saying this about another flashy CEO competitor, “he was more of a show horse, whereas I was more of a plow horse.”

Collins also credits Wurtzel with really helping solidify the concept that great companies are very disciplined about hiring the right people and “getting the right people on the bus.” Wurtzel was one leader who was extremely disciplined when hiring. Walter Bruckart, a Circuit City vice president during the growth period, told Collins this story about an exchange with Wurtzel: “‘Alan, I’m really wearing down trying to find the exact right person to fill this position. At what point do I compromise?’ Without hesitation, Alan said, ‘You don’t compromise. We find another way to get through until we find the right people.’”

Do you wonder where Alan Wurtzel got his hiring discipline? You only have to look to his father, Sam Wurtzel, who founded the Company. About 50 years ago, he taught Alan these five hiring tips, which are just as relevant today:

1. Look for talent and temperament over experience.
2. The candidate MUST have strong interpersonal skills.
3. Make hiring your priority.
4. Never hire a “warm body” to fill a slot.
5. Use multiple interviews with shared feedback.

Lessons from Good to Great to Gone

If I was teaching a retail business history course, I would choose Wurtzel’s book as a text. While he carefully teaches us many leadership lessons, Wurtzel also exposes us to how the retail electronics industry developed from World War II through 2010. This was a pleasant journey for me. This history lesson also gives the reader proper context for what he was teaching us about the rise and fall of Circuit City.

The best lessons for me were found in what Wurtzel refers to as “Habits of the Mind”, which he shared at the end of each chapter. “Habits of the Mind” are the thoughts leaders have that drive strategy. He writes that while these “Habits” vary by industry and person, and they usually provide the foundation for how we lead our organizations.

Here are Wurtzel’s 12 Habits of the Mind paraphrased from the book.

1. Be Humble, Run Scared. You should continuously doubt your understanding of things; worry about what the competition knows that you do not.
2. Curiosity Sustains the Cat. Be always open and curious and strive to learn from others.
3. Evidence Trumps Ideology. When things do not work out as planned, we need to understand whether our original assumptions were based on evidence or personal ideology.
4. Confront the Brutal Facts. The worst person you can fool is yourself so don’t ignore or deny reality – it will not go away.
5. Chase the Impossible Dream. Wurtzel challenges us to embrace the “AND” paradox, which means to challenge and inspire our teams to work on what feels like two mutually exclusive goals at the same time. For Circuit City that was low prices and exceptional customer service.
6. Maintain a Current Road Map. You should have a strategic plan that reflects an understanding of the external market and leads your organization’s bus toward the vision.
7. Boldly Follow Through. Big ideas require bold leadership and attract loyal followers.
8. Mind the Culture. Create a caring and ethical culture where employees can make mistakes without fear of retribution or other adverse circumstances.
9. Pass the Torch with Care. Succession is critical and the selection of senior leaders is the most important job a CEO faces.
10. Encourage Debate. Learn from dissent and design dissent into your structure. Create a board that will raise thought-provoking questions and challenge management to justify its plans.
11. Keep It Simple and Accountable. Create clear and well-articulated policies and procedures. For any organization to succeed it is essential that each and every employee internalize the company’s goals and values.
12. Focus on the Future. Lead and manage for the long term, not the short-term. Stay focused on the vision and long-term goals.

For me the lessons we have learned from Wurtzel and Collins about the rise and fall of Circuit City are best summed-up in an anonymous quote Wurtzel shared, “A bend in the road is not the end of the road…unless you fail to make the turn.” We must never take both hands off the wheel.