This is a sad piece. I typically try to keep emotions out of strategy but I feel bad for this company. It arranged a marriage between a new business and an old one, and it ran against what I’d call irreconcilable differences.
Companies in declining industries can get desperate, especially when they’re accustomed to market-leader status. They get beaten down by Wall Street, shareholders, and columnists. Sometimes they bolt way out of their comfort zone instead of trying to tune up the old business, scale down expectations, and ride peacefully into the horizon, making a lot of money in the process for shareholders.
In itself, venturing boldly into a new area when the old one is in decline is entrepreneurial vision at its best. Unless, of course, the new business is so far from the old business’ comfort zone — i.e., expertise, technology, infrastructure, etc. — that it’s like trying to cross a chasm in two steps. This is the case of Barnes & Noble. As USA Today reports, Barnes and Noble’s CEO, William Lynch, the one who led B&N into the e-commerce age with Nook, resigned on July 8, 2013. The reason is that the e-reader market is highly competitive (red, bloody ocean for sure) and Nook has been losing its shirt. …Read More →