Xtra-Vision, a DVD rental chain that was previously owned by Blockbuster, announced that it’s to shut down 28 retail stores which will result in about 100 jobs lost.
Why am I writing about that? Well, simply because it was my first semi-proper job. As a result, Xtra-Vision holds a special place with me. It was a good job for someone in college. You got 5 free rentals per week (including games!), a lot of customers were really nice & trusted your input on what to watch and the crew we had in our store was awesome. This was despite my being in one of (if not the) busiest stores in the country. Even more, it was in a really rough area. Those facts typically means you work in a sweatshop style environment in retail. But not for us, we were a tight crew.
The other big reason it holds a special spot in my memory is that it’s where I met my wife to be.
Our story is fairly boring but at the time it was great fun to be in the middle of a will-they, won’t-they story. One such story is about my mobile phone.
We used to put our mobile phones on a shelf just behind the doorway into the back area where all of the DVDs were. If true smartphones were around 10 years ago, then Fraping and Twitter hijacking would have been rampant. But instead, the best joke one of my colleagues could muster was to change my wife-to-be’s listing in my phone to her name followed by the characters
And to explain the way the companies' demise came I've got two stories to tell.
My point here is that Xtra Vision was a great job. But a horrid company to work for. The district manager was a serious piece of shit who had no respect for anyone underneath him. When he was promoted to some head office role, that got worse. And of course, shit travels downhill so morale in any echelon of management in the company was dire. He eventually left to go to another company, but his ability to hire talented management was so dire that the stench of his attitude remained thereafter. For me, as a part-timer it didn't affect me. I rarely worked shifts with managers because I worked evenings & weekends to get beer money for college. But you could tell morale sucked for anyone who genuinely cared. This is the first lesson about the company and why it's shutting stores down.
The larger point I wanted to make was about making bets. That's where story #2 comes in...
No idea is bad
It's Christmas. I don't really remember what year. There's still a will-they, won't-they thing going on between my wife-to-be & me. For those keeping tabs, the will-they bit was the one that won out. But Xtra-Vision decided to throw a pretty epic party. They invited all their retail staff from the entire country to a hotel somewhere in the middle of the country. Everyone had dinner & got drinks tokens featuring the CEO's face. There was a 007 theme, so they had a mini-casino in one area of the hotel. They even arranged for those travelling to get a bus plus subsidised rooms. It was awesome.
At one point I got a bit brave with a few pints in me. I approached a group of suits, one of them our relatively new area manager, and said hello. They were middle management types who were more than happy to chat to an underling like myself. Because, of course, they also had a few pints in them. I talked careers, opportunities and what the company plans on doing. I knew, or at least assumed, the managers and upper echelons surely had a meeting before the party in the hotel to discuss the strategy for the business.
So far, so good.
As it turns out, no one really had an idea of where things were going for the business. In fact, they hadn't had a meeting. Everyone just showed up for the party like everyone else. There was no plan for the following 12 months. This wasn't a celebration of how great the year was compared to projections. This was a celebration to get rid of money that'd otherwise go to tax (that's just my opinion).
I mentioned a company that had come out in the US, Redbox. It removed the retail store aspect of DVD rentals and just turned the business into a vending machine company. A man in a van could run an entire district - meaning it'd be fairly low. I also mentioned mailing DVDs rather than needing the retail stores. Low cost, high margin. They didn't really think much of these ideas. They thought that people in Ireland love retail. And they were probably right. But they had no bets to make in the future. None. Not a single idea.
So I gave them one. At the time the internet was still a little slow. 3mb internet was light speed broadband in a home, but it wasn't the average. I remember chatting on IRC to someone in the US who had "T1" internet. That term never made it to Europe because we skipped that. The idea was a relatively small company that was shifting a few paradigms in the US rental market. Netflix. I doubt anyone in Ireland knew what it was, but because of my aforementioned IRCing, I knew about trending US digital companies.
They didn't care. My district manager noted that there was plenty of opportunities in HQ. But he clearly meant management, recruitment or stock purchasing. Not pivoting part of the business into a big bet that ultimately could have saved them.
And that's my second point. Xtra-Vision had no interest in making a bet to help the business grow. Probably moreso, they had no interest in listening to a younger, part-time member of staff with an idea that turned out to be what likely ultimately murdered the company. That's my second lesson about why the company is shutting down stores & laying off staff.
Combined, my two points as to why Xtra-Vision are shutting down stores & laying off staff are:
1) They had a virus of a management team who had built an awful culture.
2) They made no bets and rested on their laurels for so long that they got left behind.
So what's the lesson?
Make bets. Think about the next 12 months & how they fit into the future plan to grow your business. Make a 6 month plan to set the seeds for those 12 months. Think about 24 months to make sure your 12 month plans fit into the 24 month growth trajectory. Think about 5 years ahead for those big changes that shift in the industry to move everything in the right direction. Write down a fake note sheet from a meeting in 5 years time that looks at the notes for what happened, what was good, and what was bad (i.e. spot speed bumps).
Just makes bets, or you'll become an Xtra Vision style company that ignored a pretty decent tip off from a junior staffer and got destroyed.