Most likely you saw the news that the venerable company, Sears filed for bankruptcy in October. What can we learn from its demise?
Sears, which eventually changed its name to Sears & Roebuck started in 1886 in Minneapolis, Mn. and moved to Chicago in 1887, was one of the most innovative companies of its time.
Initially Sears only sold watches and jewelry through a catalog, but it very quickly began to add varied products, and by 1894 its catalog numbered 322 pages of diverse items.
By 1896 its catalog had grown to 532 pages which included sewing machines, toys, bicycles, stoves, sporting goods, and even groceries.
From 1905 to 1915 it even produced and sold its own automobiles through its catalog and astoundingly from 1908 to 1940 sold mail-order houses in a kit form.
Sears added physical stores in 1925 to its operations and was a pioneer in creating the modern department store that catered to both men and women.
In reality, it sold almost everything needed for a person’s life (kind of like Amazon nowadays). Sears truly was a fount of innovation.
The Downfall of Sears
However, in 1993 Sears discontinued its general merchandise catalog because of sagging revenue and profits – which 
was just when the internet business boom was starting.
Relatedly, Amazon began business in 1994, so Sears was in the ideal position to be what Amazon became. This is true because when you consider how a shopping catalog operates, you quickly realize that it was the precursor to online shopping.
Well after Amazon had started, Sears could have easily beat them. It had two of the best brand names (Sears and Sears & Roebuck) and very strong product brands like DieHard, Craftsman, and Kenmore.
In addition to moving into online shopping it could have used its ubiquitous stores as customer pickup and return facilities (Amazon has had to go to great lengths to try to provide this ability). It also had a huge warehouse and distribution operation – which Amazon continues to develop.
For years it had sold other company’s products, and it could have easily greatly expanded its product offerings.
So why did Sears fail?
The lack of Innovation led to its bankruptcy!
The solution to its challenges was right under its nose, but there was an absence of an entrepreneurially oriented spirit of innovation within Sears.
This led to a lack of vision within the company.
The huge lesson to be learned from Sears’ bankruptcy is that, even the most successful companies (in 1999 Sears was #15 in the Fortune 500 List) need to continually and fully embrace innovation and maintain an entrepreneurial orientation. Otherwise they may be replaced by more visionary businesses.
Let us take this lesson and apply it your company and employees.
An Entrepreneurial Mindset Kindles Innovation
For a company to successfully innovate, an entrepreneurial mindset needs to be present in both its leadership and employees. But why?
Entrepreneurs look at the world very differently than non-entrepreneurs because when an entrepreneur perceives a problem in the marketplace, virtually any experienced one should see an opportunity for an innovation or business. But someone without an entrepreneurial mindset will generally only see a problem as an obstacle or difficulty. They may see the impediment as something just to be put up with instead of an opportunity for innovation.
An entrepreneurial mindset is by its very nature customer-focused. According to a study by Right Management, 70% of entrepreneurially oriented employees stated they have a good understanding of how to meet their customers’ needs. While only 17% of non-entrepreneurially oriented ones had that understanding.
Having worked with over 1,200 companies during the past 17 years, we have found that entrepreneurially oriented business owners effectively develop ideas and then carry those innovations through to their logical conclusion. This quality most not only be present in an organization’s leadership, it needs to be functioning in the minds of its personnel.
This element of an entrepreneurial mindset must first be present in the company and then the vision for the company needs to be presented to its personnel for them to buy into the company’s vision.
This means an organization must make sure that their staff members think in entrepreneurial ways. This will result in employees executing their job responsibilities and interpreting their daily activities in light of this entrepreneurial mindset/company vision.
A Company’s Vision for the Future
The ultimate destiny of an organization is determined by leadership’s vision for it. By staff co-sharing the vision that
leadership has for the company, a mindset of innovation is cultivated in its employees because everyone gets on the same wavelength.
Vision defines the overall and long-term goals and objectives for an entity, what it wants to accomplish, and what the company wants to look like in the future. By laying out the future direction of the company to employees, personnel know the overall game plan for the company, which makes them feel like they have entered a partnership with the company.
For instance, Google’s vision, “To provide access to the world’s information in one click,” is an incredible North Star for its personnel. This great vision continues to create great innovations.
Leadership needs to cast the vision for the future of their company to its staff consistently. It needs to regularly communicate the organization’s vision to its employees in various ways so that everyone sees how his or her efforts contribute to the overall vision—which in turn leads to an innovation mindset.
This is crucial because as we discussed in the August and September 2018 Newsletters, there are four sources of innovation – employees, customers, suppliers, or the public.
No matter where the ideas for innovation come from, your employees are paramount in the innovation process because they are necessary to make the innovations a reality.
Therefore, you must determine how you will provide the initial and ongoing innovation training your personnel will require to think like an entrepreneur. Then you can capitalize on the opportunities that are being presented to your organization each day.
This needs to include communicating the vision for your company to your employees in such a way that they can understand which areas you wish them to focus their innovative efforts. Without this training, you will not achieve the innovation results you desire.
Where to Start
Number one, take the time to develop and establish a compelling Vision for your company. Then make sure your vision stays current by reviewing and updating it twice a year.
Number two, on a regular basis share the vision for your company with your personnel and how it impacts their daily activities.
Number three, train your employees how to develop an entrepreneurial mindset for achieving your Vision and how to use innovative thinking to come up with great ideas.
If you need assistance with developing an overall vision for your company and how to get your employees thinking with an entrepreneurial mindset that will lead to innovative behavior, please contact us using the below information so we can be a resource to you in this crucial area.
Fountainhead Consulting Group, Inc. is an Innovation and Business Planning firm. During the past 17 years we have shown over 1,200 companies how to achieve their goals by using our unique, comprehensive and systematic FastTrak Innovation Program™, Innovation Academy™, and Structure of Success™ methodologies. Using the components in these methodologies, each month we examine an aspect of how to transform your business or organization into a true 21st Century enterprise.
Office: (770) 642-4220
www.FountainheadConsultingGroup.com
George.Horrigan@FountainheadConsultingGroup.com
Tags: entrepreneur, innovation, small business consulting, small business planning, start a business
