In March 2006 Philip Schoonover was appointed CEO of Circuit City. In a very competitive industry his goal was to cut costs and increase profits.
In March 2007, in a move destined to be an example used in business classes well beyond our lifetimes, he fired 3400 employees, including the top half of the sales force. The top half of the sales force were those earning the most and generally being the most knowledgeable.
Every car dealership in the continent prunes their sales force from the bottom but, since Philip Schoonover was being paid $1.500,000 per year, he obviously was able to make far more informed decisions.
Philip Schoonover was fired in September 2008. During his tenure Circuit City stock declined in value by 90%. He destroyed hundreds of millions dollars of equity in the company.
How does this relate to us Realtors who are still in the business?
I don't know what is going to happen to Circuit City. With the costs related to closing 155 stores, the rebuilding of the sales force and morale after Schoonover eviscerated both is a huge challenge for the new CEO. I do know that Circuit City is subject to the free enterprise system and may not survive , despite its size, because of basic mistakes made by its management.
Those of us still here are Best Buy. Our dearly departed colleagues are Circuit City. We have survived because we have adapted. We have had the capacity to be self critical and do something about it.
Congratulations to us!
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