We frequently talk about the need for companies to look toward the future when planning the present.
Bed, Bath and Beyond is the poster child for failing to take its future into account. As a result of this lack of forward-thinking, all of its top officials have now been unseated and the company begins the challenge of working hastily to catch up with its future. The company’s leaders built a super store for housewares in an era of brick-and-mortar predominance, ultimately opening 1500 stores. They were ill-equipped, however, to transition to a world where customers can access a wealth of goods through their smartphones (ref. WSJ). Bed, Bath and Beyond has remained stuck in the past, relying on coupons to draw customers and a “pile it high” approach for its stores. A former company marketing executive remarks that “They lacked clear vision and understanding of how to compete in a new, digital world.” The company embraced a frugal culture, where even PostIt notes were considered too expensive and few employees had computers. The frugality served them well while building up the network of stores, but the mindset was a hindrance when having to decide to invest in marketing technology. A favorite saying around the company was, “We’re not in a rush to make mistakes.” Thus, a website upgrade took 3 years and a loyalty program, 2 years. The company had experienced 27 consecutive years of gains and profit-making; but hit the wall in 2018 when its revenue declined 2.6%. Thus, they now have a reconfigured board of nine new directors and are in the process of searching for a CEO. It remains to be seen if the company can be overhauled quickly enough, but the new directors all have retailing and e-commerce experience. A newly-created board committee is charged with the responsibility of helping the company “navigate the evolving retail environment,” (ref WSJ). Analysts say that the company still holds sway with consumers, thus it’s possible that, with the new board’s guidance, there will be success at catching up with the current retail market. The board committee will need to oversee the streamlining of inventory, reducing costs, updating marketing, and modernizing the stores and investing seriously in technology. The company has now made significant technology investments but will need to do more. These are the kind of changes that should be triggered by annual strategy systems building, where the current future is accessed and the way to that future is mapped out. Regrettably, nothing like that happened at Bed, Bath and Beyond – they were another of those companies that considered that once they had “made it” (that is, opened their 1500 stores) that that success would always sustain them. Unfortunetaly, nothing could be further from the truth – the world is always changing and, if the company isn’t changing in consonance, the scenario recently experienced by Bed, Bath and Beyond will be repeated for all those failing to access their future.