Читать книгу Accountable Leaders - Vince Molinaro - Страница 24

What I find fascinating about the story of Sears is that from the time it first incorporated in 1893, the company was a disruptor. There was the Sears catalogue. Sears was one of the first department stores. Sears’ amazing brands, like Craftsman tools and Kenmore appliances, inspired confidence, lasted forever, and gave consumers value for their money. The company was one of the first retailers to establish an online presence in early 2000. Sears found a way to innovate throughout most of its 125-year history. Despite all of this, the company struggled to survive in a dynamic and shifting retail landscape. This is a reality all leaders must embrace. Success doesn’t last forever.

The problems for Sears, according to many industry analysts, started in 2005 when it merged with Kmart, a strategy designed to boost two struggling retailers.² At that time, Sears and Kmart had 3,500 stores in the United States. By 2018, they were down to just about 700 stores between the two brands.³ That’s an 80 percent erosion of the company’s footprint. From 2003 to 2018, the company lost 96 percent of its value, while its key competitors doubled in value.⁴ The company was missing the mark. Many argue Sears’ downfall was also the result of a failure to shift to digital.⁵

The leadership angle to this story is also interesting, for at the center of it all is CEO Edward Lampert, a successful hedge-fund manager with extensive experience in the retail world. He took over management of the retail chain in 2013. He launched a series of moves designed to both modernize the company’s operations and compete online while cutting overhead.

In addition to his vigorous restructuring plans, Lampert put nearly $1 billion of his own money on the line for the struggling company in loans or letters of credit. However, even that wasn’t enough to spare him from widespread criticism. The media regularly chastised him about his leadership style and the way he led the company.

He rarely made personal appearances at the company’s headquarters, preferring instead to do most of his work from a vast Florida estate. He would hold daily video conferences with Sears’ executives toiling in the company’s Illinois head office. He only traveled to the head office once a year for the annual shareholders meeting. The video conferences reportedly would get quite heated and emotional. Lampert defended his tone and approach to leadership as a way to “drive decision making and accountability at a more appropriate level.” Most would agree that this was a strange way to lead a company in the throes of gut-wrenching change. In 2016, Lampert was named the most hated CEO in America based on his employee rating on Glassdoor.⁶

It would soon become clear that Sears was in a death spiral. In late 2018, Sears filed for bankruptcy protection in the United States.⁷ Then in early 2019, Lampert’s hedge fund bought the company for $5.2 billion, avoiding liquidation and allowing the company to keep some stores open and save an estimated 45,000 jobs. Lampert said he planned to step down as CEO, which he did.⁸ About a year later, he also stepped down as chairman.

In April of 2019, the company lodged a lawsuit against Lampert and a string of its high-profile past board members for allegedly stealing billions of dollars from the once-storied retailer.⁹ Unsecured creditors of Sears argued that Lampert was the cause of the company’s downfall, not its savior. They asserted that Lampert, along with some of the company’s most significant shareholders, unduly benefited from deals that occurred under Lampert’s watch. The lawsuit alleged that Lampert caused more than $2 billion of assets to be transferred to himself and other shareholders, putting those assets beyond the reach of Sears’ creditors.

Then in May 2019, Lampert asked a federal bankruptcy judge to release him from his obligation to compensate former Sears workers with an estimated $43 million in severance costs.¹⁰ Lampert argued that the company had not lived up to its obligation to sell him most of its assets. As a result, he believed he was not obligated to pay the severance costs.