The Crazy Plan to Save Barnes & Noble
Publishing industry observers rooting for the continued solvency of the nation’s largest bookstore chain are probably concerned that Barnes & Noble is struggling to grow its Nook device and ebook business while its physical bookstore business shrinks.
Nook is supposed to be the company’s white knight but it is losing hundreds of millions of dollars a year on about a billion dollars of revenue and its sales aren’t growing. Despite a boom in tablets, its Nook tablets sold fewer this past holiday season than in the prior year; it’s getting lapped by competitors like Asus and Samsung. (Read much more about this here.)
That said, at least one industry observer hasn’t given up on B&N and he has proposed a radical plan to save the company: savebarnesandnoble.com (mildly NSFW, depending on where you work).
The sparse site, launched about a month ago by Scott Shui, a Los Angeles based author and founder of the website The Library Infinite, doesn’t offer any remedies to Barnes & Noble’s problems. It does, however, link back to an earlier website from Shui, whose interest in the matter is as a reader and book-buyer: saveborders.com.
When we spoke with Shui through Twitter, he indicated that the Borders solutions (evidently not adopted) would work for Barnes & Noble as well.
Below is a list of our favorite suggestions from his plan:
1. Suggestion: Post executive salaries, duties and responsibilities on a private online website where all company employees can review and comment on them.
Commentary: Because Barnes & Noble is a publicly traded company, it does make public the salaries and other forms of compensation for its most senior executives. One wonders how managers of Barnes & Noble stores that will be closing in the next few years feel about the company’s chief executive William Lynch taking home $10 million in stock and other forms of compensation in 2012.
When Citigroup floundered and needed a government bailout in the wake of the 2008 financial crisis, its CEO Vikram Pandit took a $1 annual salary until the company righted itself.
2. Suggestion: Executive non-store salaries are to be capped at two times the salary of a store manager until six consecutive quarters of profit.
Commentary: Barnes & Noble is profitable overall, but Nook is not. Perhaps this remedy should apply specifically to Nook. The problem with this idea even for Nook is that it’s a technology company and many of its mid-level employees — developers, product designers and other technologists — command high salaries in the open market. If Nook wants to win versus Amazon, Apple and others, it needs top talent. Top talent costs a lot of money in this field. Still, the idea of making Nook employee compensation more closely tied to success may have merit.
3. Suggestion: Management will be required to work shifts at different stores on a monthly basis to obtain in person employee and customer feedback.
Commentary: Is management at Barnes & Noble out of touch with what’s happening in its retail stores? Perhaps. Either way, the company is interested in becoming less of a bookstore and more of a cultural department store, which is a significant shift. It couldn’t hurt for the company’s senior leadership to be spending more time on the ground with its employees figuring out how to make that happen.
4. Suggestion: Store employees will visit company headquarters monthly on a rotating basis to provide store feedback and participate in strategy meetings.
Commentary: This seems unrealistic and expensive. However, it does imply a business practice that Toyota has made famous: Kaizen. It’s the company’s philosophy of continuous improvement and central to this philosophy is taking suggestions from employees across the organization, not just business leaders. The practice has been credited, in part, with Toyota’s rise to one of the largest motor companies in the world.
5. Suggestion: Partner with local libraries for in-store book drives.
Commentary: The library community is eager to make friends and serve its patrons in doing so. If Barnes & Noble were to lend its space and clout to these kinds of book drives, it could help it make some allies in libraries. It could also give reason for people to come to the stores (and replace the books they’re giving away — unless, like Barnes & Noble, they are filling their shelves with toys and games instead of books these days).
6. Suggestion: Host job skill fairs where readers can look at books that can help them find a job and manage their career.
Commentary: Information can make the difference in a successful job search and in a successful career. Bookstores, despite the beating they’ve taken over the past several years, are still great places to get such information. With national unemployment hovering around 8%, a jobs-related Barnes & Noble event could be a way for the store to help struggling job seekers as well as help build its position as an important central player in the community.
Read more about potential solutions to Barnes & Noble’s problems here.