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Reading the Trends of Change

By Maxwell Leadership | June 11, 2011
Reading the Trends of Change

On February 16th, news outlets reported that Borders bookstores had filed for Chapter 11 bankruptcy protection. The bookseller chain planned to shutter 30% of its stores, or 200 locations, nationwide. Analysts are skeptical whether the slimmed-down Borders will even be able to survive. There’s a real possibility for the bookstore to go the way of Circuit City and Linens ‘n Things, chains which no longer operate physical retail locations.

Ambushed by Change

Borders have always been known for providing a comfortable in-store experience with their spacious cafés and wide variety of titles. Unfortunately for Borders, consumers decreasingly shop in-person at bookstores. More and more people buy books online or download digital versions to e-readers.

Borders was slow to recognize market trends. Whereas Barnes & Noble began selling books online in 1997, Borders did not launch e-commerce until 2001. Even when Borders did venture online, it outsourced its web-based business to Amazon. Rather than developing firsthand expertise in Internet sales, Borders entrusted a burgeoning source of revenues to an outside vendor, a perplexing decision it did not reverse until six years later. When the Kindle appeared on the scene, Barnes & Noble invested heavily to bring the Nook to market in 2007. Again, Borders trailed the action, belatedly launching its Kobo in 2009 in relative obscurity.

Why did Borders take so long to adjust to the digital era?

As leaders, we attach ourselves to what we create. In doing so, we’re tempted to marry ourselves to outdated systems in which we’re emotionally invested. When warning signs present themselves, instead of heeding them, we keep our faith in a system that has served us well in the past.

The challenge, not just for Borders, but for all major booksellers, has been to think less in terms of designing the ideal bookstore and more in terms of figuring out the best ways to distribute content to readers. Bricks-and-mortar business has fallen off. Paper and ink is going the way of the dinosaur. Instead of trying to perfect its in-store experience, Borders must grasp the reality that out-of-store business may hold the only hope for its continued existence.

Questions to Ponder:

Which systems in your organization did you create? What advantages and disadvantages do those systems have?
How do you anticipate needing to upgrade your systems over the next 5-10 years?
What steps could you take to prevent yourself from being blinded to the reality of an obsolete system?

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