Tuesday, July 16, 2013

Randian Destroys Business...

Bloomberg has an amusing read on the clusterfuck that is Lampert's management of Sears (well, amusing provided you don't work for Sears/Kmart in which case it is probably horribly depressing).  I do want to make a quick note about this lunatic in charge.  When he responded thus:
“Decentralized systems and structures work better than centralized ones because they produce better information over time,” Lampert writes. “The downside is that, to some, it appears messier than centralized systems.”
He wasn't entirely wrong.  I don't know about better, but decentralized systems certainly produce easier to extract information over time.  One of the problems of centralized systems is that there are lots of feedback systems that are very difficult to accurately measure/discern.  But that difficulty doesn't make the centralized system worse (or, technically, better) it just makes it harder to break down and quantify. 

In the case of Sears, if appliances bring people into the store, but they can get better margins on baby products, then it may be a good idea for those two to team up: offer a special on washing machines (new baby: more laundry) to get people in the door and position the sale item very close to the baby merchandise.  In Lampert world, however, you can't do this because appliances would see a drop in profitability while baby-whatever sees the gain, so next time around baby people get more money/space in the catalog/whatever, and appliances gets less, but because it is appliances that brings more people in the doors, the switch means fewer people come in and lower revenue all around.

Of course, Lampert is a Randian, and those people are largely out of their minds, but putting one of their true believers in charge of a company is mystifying.  Most of our corporate overlords spout that crap but don't really believe it...or so I'd always assumed. 

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