Don't Believe Your Own Blarney

The demise of Circuit City is just one more horrible casualty of the current economic climate. In a press release yesterday, the company announced it was filing for Chapter 11 protection – in effect, bankruptcy.

Another example of how the mighty have fallen. Jim Collins, in his excellent book Good to Great referenced Circuit City as a “Great” company. I went back to the book to see just what he had written about the now fallen electronics retailer. The biggest surprise for me was that this was not the only “Great” company cited in the 2001 publication which has fallen on hard times. Would you believe Fannie Mae also passed the “Great” test?

This is not a criticism of Jim Collins’ work. Rather, it shows once again how difficult it is to stay on top.

It is quite amazing how many once really successful companies fall fast and precipitously, either losing their independence or becoming at best also-rans. I don’t know enough about Circuit City to know if it was hubris that brought them down, but it is often a key reason in the demise of companies.

Wendy’s for instance loved to claim it was better than McDonald’s on many key metrics when the burger leader was in the toilet earlier this decade. The only trouble is, the firm Dave Thomas founded believed its own blarney, sat back which McDonald’s did a fantastic re-engineering job and today Wendy’s is no longer independent and basically looking for an identity. Sears, Yahoo, Pan Am (remember them),Yankees, Dell have fallen from grace big time. The lesson – don’t believe your own blarney (which is a key lesson in my book Why Ireland Never Invaded America) and do listen to your market. Failure to do so means – Goodnight, Goodbye (but not Good luck.)