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A City of Circuits With No Electricity: Lessons Learned From Circuit City

There once was a man who owned a house. It wasn’t a marvelous house or an ugly house, just an ordinary house with shutters, windows, and 2×4 beams. The man who owned this house loved it enough to want to protect its existence from the harsh world outside. So, the man began changing the house in order to preserve it. He took down the shutters and replaced the windows with bricks. Inside the house, he threw away games and fire hazards (TV, movies, and computers).

One day the man comes to visit his house to find nothing but an empty lot and the few bricks that cased what used to be a window. The man was so concerned with what could harm his house from the outside that he never expected the termites that brought his house down from the inside. The problem was that this man was concerned about a house, instead of a home. Houses are what the outside world sees, but a home is what the people on the inside see.

Circuit City was my house for nearly two years. In my short time as their employee, I was managed by four different store managers (not including the short stint when there was no store manager at all), four different operations managers, three different sales managers, two different district managers, and experienced one company wide restructuring. From my experience with company culture and leadership, albeit not a very exemplary experience, I have noticed one major fault- there was no home, just a house.

The saddest part is that there were attempts at creating a culture of enthusiasm within Circuit City; these were just executed half heartedly. From time to time, there would be associate rewards programs that amounted to nothing. Most employees didn’t even participate or attempt to collect their rewards.

It wasn’t long before I noticed a drastic change in morale. Some associates, who were around long enough, would talk about the glory days when Circuit City used to mean something to them. I wasn’t around then, but I recognized the passion and nostalgia in their voices. When Circuit City became afraid of nature (economy and other external threats) it began protecting its house and neglecting its home.
Their first mistake was that they fired most of their experienced employees who had faith in the brand and ownership of its success and replaced them with anyone who would do the work for the going wage.

Then when that wasn’t cost effective, the next wave of cuts came. The starting wage for sales associates went from $8.50 to minimum wage. This cut came with a price. These were SALES associates, the people who were expected to convince a customer to not only purchase a television, but to also spend 25% of the cost of the TV on a service warranty (which covers only slightly more for slightly longer than the standard manufacturer’s warranty), in-home installation, delivery, $100 + AV cables, surround sound, and a $125 + surge protector, and now they had little incentive to do so. As a sales associate I took these responsibilities as part of my job, but others, quite expectedly, took no accountability in adding to the sale because it did not affect their wage. What was their incentive?In my department, I would try to sell as much as possible, but not because of a feeling of ownership in the company.

For me it was just a game. Selling was an opportunity to show how well I could do. And for a while people played along, but as soon as the game was over they would resort back to meandering between aisles dodging customers.

Incentives don’t have to be monetary. As an associate I understood my role and was more than happy to complete it. I also understood the sentiments of other associates. I remember a few of the managers and I talked after a monthly meeting. The meeting was about sales numbers, what associates could do to improve, and welcoming the new department supervisor. The meeting was tense because the supervisor, without considering its implications, pinned the slumping sales figures on associates’ lack of accountability. While he was almost right, he alienated the few employees who exemplified what it meant to be a good associate and demonstrated the leadership problems within Circuit City. From the top to the bottom, no one felt accountable.

There is a big difference between being held accountable and feeling accountable; nobody felt it. The district managers thought the store managers were slackers, the store managers blamed the sales managers, the sales managers blamed the supervisors, and the supervisor blamed the associates. This trail of blame created the perfect storm, which came together in one tense moment after the meeting. We talked about accountability. The sales manager reiterated the supervisors’ accusation and showed disdain for the employees saying that “their pay checks are their incentives” and that they shouldn’t expect more. This quote demonstrates the very heart of poor leadership. To follow a leader you need more than money, lust, or fear. Leadership requires the ability to empathize with, support, and guide those you expect to follow.

If I’ve learned anything from my experience at Circuit City, it’s to protect the home, then the house. If Circuit City would have checked for the termites eating their home, maybe there would be more than empty lots and bricks left. Instead of holding meetings telling managers to reprimand employees who weren’t carrying clipboards, they should have:

1. Taught that accountability shouldn’t practice the trickledown methods of Reaganomics
2. Encouraged a company culture where employees felt like contributors not employees (simply calling them associates instead of employees isn’t enough)

Posted in Organizational Culture.


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