14年來西爾斯關閉了3500多家門店，并在去年秋天申請破產，現在它可以利用一些真正的好消息了。該公司的發言人表示，申請破產以后西爾斯“有許多可以使其致勝的資產和優勢”。但實際上，除了蘭伯特，別人都不相信西爾斯能夠扭轉命運，而且從2005年蘭伯特的對沖基金ESL Investments收購西爾斯并將其與凱馬特合并后，他就已經讓大家明白不要相信他的那些樂觀言論。盡管蘭伯特預言“戰略轉型”會讓西爾斯變成“真正偉大的零售企業”，但2010年以來該公司的年收入一直都沒能增長，也沒有實現任何利潤。最新的劇情反轉是：西爾斯控股，也就是將資產轉讓給蘭伯特的破產實體已經起訴蘭伯特等人，理由是后者在擔任CEO期間侵吞了公司數十億美元資金。蘭伯特和ESL Investments則否認自己有任何行為不當之處。
The kindest media attention Sears has attracted in years arrived in April, when the company announced it was opening three small stores. “The start of a new Sears era? The retailer announces openings, not closings,” read USA Today’s hopeful headline, which echoed others nationwide.
But viewed through a longer lens, the coverage was more pathetic than upbeat. This is what now passes for good news at the onetime colossus of global retailing: three stores, one of them in Alaska, each smaller than owner Eddie Lampert’s house, offering a somewhat puzzling product line consisting mostly of appliances and mattresses. Sears insists this tiny event is the leading edge of a new strategy for becoming “a stronger, more profitable business.” No one else in retailing seems to think it has a chance. “Lampert has never initiated a format that didn’t fail,” notes longtime retail consultant Burt Flickinger. The verdict of consultant Steve Dennis, a former Sears executive: “It will almost certainly amount to zilch, plus or minus bubkes.”
After shedding more than 3,500 stores over the past 14 years and filing for bankruptcy last fall, Sears could use some genuine good news. A Sears spokesman says the post-bankruptcy business “has many assets and advantages that position the company for success.” But virtually no one other than Lampert expects a reversal of fortune, and he has taught the world not to believe the happy talk he has been dispensing since ESL Investments, his hedge fund, bought Sears in 2005 and merged it with Kmart. Despite Lampert’s predictions of a “strategic transformation” that would make Sears “a truly great retail business,” the company hasn’t managed a single year of revenue growth since then, or earned a dime of profit since 2010. The latest twist: Sears Holdings, the bankrupt entity that sold its assets to Lampert, is suing him and others for stripping the company of billions when he was CEO. Lampert and ESL have denied any wrongdoing.
Still, even today, sheer inertia may enable the Sears brand to linger. Despite its mortal wounds, the company brought in $13.2 billion of revenue in the 12 months through last Oct. 31. But the only significant question about Sears is how long it can hang on. Dennis’s bottom-line take: “There’s nothing in the portfolio with any viability.” Allstate CEO Tom Wilson, a Sears executive in the 1980s and 1990s, says Lampert “is the janitor cleaning up the ashes. There’s no way it’s going to come back.”
The Lampert era has played out in a continual drumbeat of catastrophic numbers and negative headlines, during which Sears squandered intrinsic advantages and opportunities for reinvention. But for students of management and leadership, today’s death throes are merely the denouement of the Sears drama. The truly epic conflicts that doomed the company happened long ago, when Sears was dominant and its demise was unthinkable. That’s where to look for the lessons for today’s leaders. Sears’ story is unique, of course, and the decisive events took place in an era much different from ours. But a close examination shows that its critical mistakes are universal and as contemporary as tomorrow’s news.
As late as 1991, Sears was the world’s largest retailer by revenue. So it’s sobering to see that its market value, calculated in constant dollars, peaked on May 4, 1965, according to data from the Center for Research in Security Prices at the University of Chicago’s Booth School of Business. Sears has never been more valuable than it was on that spring day—worth $92.1 billion in today’s money. Sears’ own analysts would later determine that its domination of retailing reached its apex in 1969. That year, its sales were 1% of the entire U.S. economy; two-thirds of Americans shopped there in any given quarter; and half the nation’s households had a Sears credit card.
From then till now—for 50 years—Sears has been fighting and losing a war to save itself. Nothing as large as the demise of the world’s biggest retailer happens for a single reason or all at once. But looking back, two major errors stand out as turning points, unrecognized at the time.
到了20世紀70年代中期，西爾斯再也無法忽視這些問題，并且因此進入了否定的下一個階段——堅持說業績滑坡并不是自己的過錯。西爾斯的研究人員認為，這要怪經濟。同時，美國的百貨商場實在太多了。此外，整個行業的利潤率都在下降。還有就是人口老齡化。總之一句話，錯的是世界，不是我們。1983至1987年，作家唐納德·卡茨獲準近乎無限制地參加公司會議。他在《大商店》（The Big Store）一書中這樣總結西爾斯20世紀70年代的內部觀點：“日復一日，無論我們有多優秀，賺錢就是會變得更加困難。”
Almost every corporate demise can be traced to a blown CEO succession, and that was Sears’ first decisive error. Indeed, it could be regarded as five or six bad successions because the board perpetuated its error for 20 years. This error permitted a gradual accumulation of weaknesses that became almost insurmountable.
The second decisive error was a bad strategic choice: to diversify heavily into financial services. The plan didn’t look bad at the time, and for a few years, it seemed to succeed. But in fact, it was disastrous. When the strategy was adopted in 1981, Sears was the king of retailing. By the time it was fully abandoned 12 years later, Sears was in decline, no longer the world’s or America’s largest retailer, and it had forever lost any chance of regaining the title.
The succession blunder began in 1954 with the Sears board of directors in the thrall of a Great Man. You couldn’t blame them. Gen. Robert E. Wood, the chairman, had been the driving force behind what remain the three most successful decisions in the company’s history. The first was the strategy in 1925 to move beyond being a catalog-only retailer and establish stores. Next was the creation of Allstate auto insurance in 1931. The third was Wood’s idea at the end of World War II to add stores aggressively, especially in the suburbs and in the West. (Archrival Montgomery Ward made the opposite decision, pulling back in the postwar recession, and never recovered.)
Now, at age 75, Wood had decided it was time to step down. This was the board’s chance to name a worthy successor, some hungry young manager who could lead Sears into a new future. But Wood had held on so long that several aging potential successors were lined up at the turnstile. Instead of looking past them, the directors decided each deserved a shot. There followed four CEOs who on average served barely over three years, with each stepping down at the company’s newly mandated retirement age of 65.
These blandly competent managers steered Sears on a steady course through the rest of the 1950s and the 1960s. The company grew, the stock boomed. But the world was changing, and Sears leaders didn’t see, perhaps didn’t want to see, that their business model—based on broad selection, high service, and periodic steep-discount sales—was becoming an antique.
Sears had grown into a towering American institution during the period that Northwestern University economist Robert J. Gordon dubs “the special century” of U.S. economic expansion, 1870 to 1970, which Gordon calls “a singular interval of rapid growth that will not be repeated.” For Sears, founded in 1886, the special century was the only reality the company had ever known. It rode that fast growth and its human essence, young blue-collar families, to greatness. But as the special century faded in the 1960s, fewer new blue-collar families were being formed, and those that remained had less to spend.
At the same time, consumers were enthusiastically embracing a new way of buying: the discount store, built on low prices, minimal service, and high merchandise turnover. In 1962, a miracle year for retailing, Walmart, Kmart, and Target all opened their doors; all three would surpass Sears in annual revenue by the time Lampert took over in 2005. Sears leaders were aware of the phenomenon but felt serenely unthreatened. After all, they told themselves, Sears was the monarch of discounters. They seemed not to grasp that this new breed was fundamentally different, offering much lower prices in relatively bare-bones settings. But customers noticed the difference.
Sears was doing so well that its leaders apparently saw no need to update its control and cost-accounting systems, leaving managers shockingly ignorant of how well or poorly they were performing. So many costs—merchandise, logistics, capital, and more—were averaged across the company that deciphering where money was being made and lost was virtually impossible. Though Walmart veterans recall that “damncomputer” was one word, not two, in founder Sam Walton’s vocabulary, he put the company far ahead of the field in using IT to manage logistics and analyze operations. By failing to adapt when it first could have, Sears trailed ?competitors on cost-efficiency for decades.
Sears’ prosperous complacency of the 1960s, compounded by the board’s failure to find the next Robert E. Wood, set the stage for trouble. By 1967 the company realized it needed to shift strategy. Its new plan—stocking higher-priced goods to attract more affluent shoppers—worked briefly. Gross margins peaked near 40% in 1969. But the strategy undermined Sears’ long-built-up foundation as America’s great supplier to the masses. Then a recession hit, followed a few years later by a deeper recession and double-digit inflation. The special century was over, and Sears’ new strategy was exactly wrong. Consumers wanted cheap, and all those discounters were perfectly positioned to serve them.
By the mid-1970s Sears could no longer ignore these problems, so it moved to the next stage of denial: insisting its declining performance was not the company’s fault. It’s the economy, said Sears’ researchers. Also, there are just too many stores in the U.S. Plus, profit margins are shrinking across the industry. And the population is getting older. Bottom line: It’s everything except us. “As night follows day, no matter how good we are, it’s just going to be more difficult to make money” is how Donald Katz summarized the 1970s internal view in his book The Big Store, for which he was granted nearly unlimited access to company meetings from 1983 to 1987.
The ultimate conclusion: Trying to revive what the world knew as Sears—its retailing business—was futile. Edward Telling, who became CEO in 1978, believed that “the Sears empire could not retain its incomparable position above almost all other companies by relying solely on existing businesses,” Katz reported. “Telling believed Sears needed entirely new reasons for being?…?if that meant changing Sears so profoundly that it looked like something else when he was through, then that was what they would do.”
鎖定了“黃金目標”后，西爾斯開始收購其業務。1981年，它收購了住宅房地產公司Coldwell Banker和證券經紀商Dean Witter Reynolds。將這些公司與Allstate合并后，西爾斯突然成為美國收入規模最大的金融服務公司。一項宏大戰略的元素已經到位。
回頭看去，當時奔潰的跡象已經很明顯。和許多全局戰略分析師一樣，西爾斯的主要規劃者沒有把顧客視為要服務的人，而是將其當作要開發的自然資源。宣布上述收購事項后，副董事長唐納德·克雷布解釋了緣由：“我們打算讓Dean Witter和Coldwell Banker獲得這個龐大的客戶群體。”這是出于公司需要，而非客戶需要制定策略的典型例子。
另一個不詳征兆是西爾斯向投資者給出的收購上述公司的理由非常側重于協同效應和交叉銷售。幾乎所有收購者都會提到這兩大益處，而且差不多都會夸大。西爾斯自然也不例外。西爾斯門店中的Dean Witter柜臺的業務量低于獨立的Dean Witter營業網點。新策略實施四年后，在312家西爾斯店鋪中以多種組合方式集Allstate、Coldwell Banker和Dean Witter于一身的Sears Financial Center整體上仍未盈利。實際情況證明，為交叉銷售整合客戶數據極為困難。一些措施取得了成功。Dean Witter推出了Discover信用卡——它很受歡迎，1992年Dean Witter從西爾斯剝離出來后甚至更是如此，而且其他零售商可以在不為其競爭提供支持的情況下接受該信用卡。但時任西爾斯顧問的約翰·派汀格說，整體而言，“它跟其他公司幾乎沒有產生協同”。
多元化以后，西爾斯在兩方面都遇到了最糟糕的局面。金融服務沒能像它此前預期的那樣帶來協同效應。零售也不再是西爾斯關注的核心，這在該公司歷史上還是頭一遭。Allstate的CEO威爾森說：“我覺得他們剛開始并沒有打算不以零售為重點，但后來出現的情況就是這樣。”對一家不再關注主業的零售商來說，那是一個可怕的時間點——家得寶、史泰博、百思買和Bed Bath & Beyond等倉儲式“殺手”公司正在改變這個行業，沃爾瑪則開始成為行業巨人。派汀格說：“董事會把門店視為現金牛，以前是這樣。他們打算繼續從零售業務身上‘擠奶’，直到擠不出來為止。”
1992年，西爾斯最終叫停了自己的金融服務策略，而它宣布的出售或剝離對象不光是Coldwell Banker和Dean Witter，還包括已經在它旗下61年的Allstate。對這三家公司來說，這是它們的最美好經歷。擺脫了西爾斯后，三家公司均得以蓬勃發展。
Thus began Sears’ second decisive error, relegating the retail business to second-class status (without ever saying so, of course) while seeking gilded new prospects for a merger far afield—very far afield. An initial wish list of merger partners included AT&T, Chevron, John Deere, IBM, and Walt Disney. All those candidates got shot down internally or when Sears approached the target. Eventually the strategic planners concluded that the new business must be one that would benefit heavily from Sears’ existing strengths. A Roper poll had recently declared Sears to be America’s most trusted corporation. In what industry was trust most valuable? The answer, the planners determined, was financial services.
Having located El Dorado, Sears began acquiring portions of it. The company bought the Coldwell Banker residential real estate firm and the Dean Witter ?Reynolds brokerage firm in 1981. Combining these with Allstate made Sears suddenly the largest financial services company in America by revenue. The elements of a grand strategy were in place.
In retrospect, signs of a debacle were apparent. The company’s planning masterminds, like many big-picture strategists, regarded the company’s customers not as humans to be served but as a natural resource to be mined. After the acquisitions were announced, vice chairman Donald Craib explained the rationale: “We’re going to allow Dean Witter and Coldwell Banker exposure to this tremendous customer base.” It was a classic example of a strategy derived from the company’s needs, not customers’ needs.
Another ominous sign was Sears’ justification to investors for buying these companies, which leaned heavily on synergies and cross-selling. Almost all acquirers invoke those two blessings, and nearly all overestimate them. Sears certainly did so. Dean Witter offices in Sears stores did less business than freestanding offices. Four years into the new strategy, the Sears Financial Centers, which combined Allstate, Coldwell Banker, and Dean Witter in various permutations at 312 Sears stores, were still unprofitable overall. Merging customer data for effective cross-selling proved extremely difficult. Some initiatives succeeded. Dean Witter launched a credit card, the Discover card, which became highly successful—even more so after Dean Witter was spun off from Sears in 1992 and other retailers could accept the card without supporting the competition. But overall, says John Pittinger, a consultant to Sears at the time, “there was almost no synergy with the other companies.”
By diversifying, Sears got the worst of both worlds. It didn’t achieve the synergies it had counted on from financial services. And for the first time in Sears history, retailing was not the company’s central focus. “I don’t think they set out not to be focused on the merchandise group,” says Allstate’s Wilson, “but that’s what happened.” It was a terrible time for a retailer to take its eye off the ball, with big-box category killers—Home Depot, Staples, Best Buy, Bed Bath & Beyond—transforming the industry, and Walmart becoming a giant. “The board viewed the stores as a cash cow, which they were,” says Pittinger. “The directors were planning to milk the retail operation until it stopped.”
The effect on performance was stark. In 1981, when the diversification was announced, the Sears retail group’s return on sales was already an appalling 36% worse than the retail industry median; during the period when Sears also owned the financial firms, it averaged 49% worse. Combining an underperforming finance business with a cratering retail business produced an unthinkable result: By 1988, Sears’ market value had plunged 66% in constant dollars from its 1965 peak, and Wall Street had Sears pegged as a takeover target.
Sears finally pulled the plug on its financial services strategy in 1992, announcing it would sell or spin off not just Coldwell Banker and Dean Witter but also Allstate, which had been part of the company for 61 years. It was the best thing that ever happened to those three businesses. Liberated from Sears, all of them blossomed and thrived.
But it was too late for the retail operation—what most people meant by the word Sears—to return to glory. In early 1991, after its worst holiday season in 15 years, new figures showed that Sears had been surpassed as North America’s largest retailer by Walmart, “a onetime backwoods bargain barn,” as Time called it in a story announcing the new king. Sears, characteristically, dismissed the comparison as meaningless: “We compete with Walmart on only 30% of the goods we sell,” sniffed a spokesman. It seems, in hindsight, an unwitting admission that Sears was selling only 30% of the goods consumers wanted most.
With Walmart’s revenue rocketing while Sears’ was essentially stagnant, Sears couldn’t plot any path to regaining the throne. “By the early ’90s, the game was over,” says Pittinger. “The most important part of strategy is being on the right side of history, and they were on the wrong side of history.”
我們應該從這個令人嘆息的長故事里汲取哪些教訓呢？撰寫或參與撰寫了超暢銷商業書《基業長青》（Built to Last）、《從優秀到卓越》（Good to Great）和《選擇成就卓越》（Great by Choice）的吉姆·柯林斯還寫過一本較薄而且不那么出名的書，叫做《巨人如何倒下》（How the Mighty Fall）。他說分析和敘述衰退要比描寫成功難得多。柯林斯說：“成為偉大公司的路很窄。有些事必須得做。但為走下坡路的公司確立一個框架非常困難。這就像打臺球——用三角框擺球的方法只有幾種，卻有無數的辦法把球打散。”
Nearly 30 years later, Sears survives, barely. It regained momentum briefly in the 1990s when top executives and the board became so desperate that they broke with a century of tradition and hired an outsider to run the place—Saks Fifth Avenue executive Arthur Martinez. He found an organization still in its dysfunctional mode. “It was inward-looking and upward-looking,” he recalls. “Everything rose to the top. There was no accountability.” He brought in his own team of ?outsiders, quickly elevating sales, operating profit, the stock price, and morale. But when he left in 2000, the stock was right back where it had been when he took over.
His successor, former CFO Alan Lacy, tried hard to move Sears out of its mall locations because those stores “had a service-based model that our customers weren’t willing to pay for,” he says. He tried a Walmart-like, off-mall style of store called Sears Grand, but it didn’t take. The stock swung wildly. When Eddie Lampert came along in 2004, the board decided his buyout offer was the best option they faced.
What lessons should we distill from this long, sorry tale? Jim Collins, author or coauthor of business mega-sellers Built to Last, Good to Great, and Great by Choice, also wrote a slimmer, less famous book called How the Mighty Fall. Collins describes analyzing and writing about decline as a far tougher task than writing about success. “To become a great company is a narrow path,” he says. “There are things you have to do. But it’s so hard to get a framework of decline. It’s like a pool table—there are only a few ways to rack the balls but an infinite number of ways to disorder them.”
Collins didn’t study Sears for his book, but the framework he identified, and on which he elaborated in recent interviews, fits Sears’ demise almost precisely. It begins with arrogance, which Sears developed at mammoth scale. Until the troubles of the 1970s, Sears’ retail operations had never hired a consultant, believing no outsider could possibly tell them anything of value. “Searsmen” didn’t attend retail industry conferences, considering themselves members of a higher caste. The loudest expression of arrogance was the 110-story Sears Tower in Chicago, commissioned in the 1960s. “Being the largest retailer in the world, we thought we should have the largest headquarters in the world,” then-CEO Gordon Metcalf explained to Time. By 2000, the company forecast, Sears employees would occupy all 110 floors. In reality, Sears shrank rather than grew and had vacated the building by 1995. It’s now known as the Willis Tower.
Arrogance erodes discipline, and discipline is central to Collins’s analysis of decline. Cost discipline is often the first to go; it certainly went at Sears. Outsiders long assumed that economies of scale would forever give Sears an unassailable cost advantage in pricing merchandise, but it wasn’t true. The company could indeed buy goods for less than anyone else—but its profligate corporate overhead was so massive (think of that building) that its total costs were bloated far beyond the industry average.
Success creates growth, which spawns bureaucracy, which subverts discipline. “The what replaces the why,” Collins says. “You have to make sure not just 10 or a hundred or a thousand people can do something, so you give everyone the recipe book. The irony is that all those people don’t know why they do it this way. It becomes dogma rather than understanding.” At Sears, the problem was as big as the company; the employee manual reportedly ran to 29,000 pages.
In the next stage of decline, leaders externalize the blame for what’s going wrong, Collins says; Sears certainly did that in the 1970s. A related pathology is neglect of “the fundamental flywheel,” the basic business idea on which the company is built. “People often underestimate how far a great flywheel can go,” Collins says. Sears’ leaders bet on financial services because they thought that retail, their own flywheel, had run out of growth 40 years ago. Home Depot, Lowe’s, Walmart, and others showed how wrong they were.
As leaders cast about for solutions, they typically reorganize the company, sometimes obsessively, and Sears checks that box. At various times in the 1970s and 1980s, it adopted a holding company structure and shuffled bits and pieces of its financial services empire among shape-shifting fiefdoms overseen by warring executives. None of it helped. In the late stages of decline, companies may invest their hopes in an outsider as savior-leader, under whom an initial upswing is common, followed by disappointment. The Arthur Martinez era fits that bill.
The final stage can be literal corporate death—insolvency and disappearance—or it can just be irrelevance, which the company has already reached. An entity bearing the Sears name could persist for years. But as an element of today’s American culture, and as a retailer with plausible prospects for long-term growth, Sears is done.
It’s astonishing how long it has taken. By virtue of its tremendous success at its height, Sears extended its decline much longer than most. But even for lesser companies, failure is almost always a deceptively slow process. “Greatness gets built very slowly—think of Walmart or Southwest Airlines,” says Collins. “Decline is just like ascent, a cumulative process. The decline of a great company only looks instantaneous because you notice it when it’s acute. That’s what’s so dangerous about it.”
As we mourn Sears, maybe we shouldn’t weep too long over its demise. No company lives forever, and it has had a long, laudable, productive life. But the Sears story should scare us. It shows every business leader that no matter how celebrated or dominant his or her business may be, the forces of destruction could be at work right now, unnoticed, caused by success but also hidden by success, undermining all the work the leader has done. Rare indeed is the executive who can spot those forces before they lead to an ugly end.
A version of this article appears in the June 2019 issue of Fortune with the headline “Seven Decades of Self-Destruction.”