Guest Opinion: Behind the Circuit City story

The views expressed in Guest Opinions represent only those of the author and are in no way endorsed by Richmond BizSense or any BizSense staff member.

When Circuit City boarded its windows and bolted its doors for the last time in early 2009, more than 34,000 Americans lost their jobs. Maybe you were one of them.

Today, when I tell people I’ve produced a documentary about Circuit City, the response is often,  “Oh yeah … whatever happened to them?” ??It’s a great question. Circuit City was a Fortune 500 company that was once hailed in Jim Collins’s 2001 best-seller “Good to Great” as an example of exceptional management practices.  How did it descend so rapidly into bankruptcy and liquidation?

The loss of Circuit City was intensely personal for me. I had been telling the Circuit City story for 25 years.

In my year-long journey to capture the good-to-great-to-gone saga of Circuit City, here’s what I discovered:

1.  There are equally important leadership lessons to be gleaned from the rise of Circuit City as there are from its demise. Long-tenured employees talk about the early leaders of the company with “enormous respect,” using adjectives such as warm, tough, fair, energetic, results-focused and genuinely caring. They talk about the “family culture” and being internally “driven to perform.” Leaders focused on their people, both associates and customers. Circuit City was the first to analyze every aspect of the customer’s experience — before and after the sale — and build a set of policies and processes to consistently exceed customer expectations. It was the first to combine the 30-day low-price guarantee with a 30-day return guarantee, service after the sale, a huge selection, knowledgeable sales assistance, expert delivery and installation, etc.  In the glory days of Circuit City, customer satisfaction was its No. 1 priority, with associate satisfaction not far behind.

2.  The Circuit City story is also an illustrated history of the consumer electronics industry. It’s about the fascinating early days of television, when many feared that the high-voltage contraptions would give them radiation poisoning. It’s about the advent of revolutionary technology such as the VCR and camcorder, which provided the first on-demand viewing experiences, paving the way for Netflix and YouTube. It’s about catchy advertising and compelling merchandising strategies. It’s also a story about failed technologies, such as DIVX, and rapidly changing consumer demand.

3.  The people who brought Circuit City from good to great still have remarkable passion for the company. They want Circuit City to be remembered not as “the company that went bankrupt,” but as “the company that changed American retailing.” They didn’t work nights, weekends and holidays and miss significant events in their family’s life just for the money. They made those sacrifices because they believed they were changing the world — or at least the world of retailing. That was the Circuit City culture in its best years. The whole was greater than the sum of its parts.

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8 Comments on "Guest Opinion: Behind the Circuit City story"

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Lucy
Guest

They failed because their customer service was horrible! I never went back after a clerk kept waiting on couples who came in after me. When I insisted I was next he said he’d rather wait until my husband came in! I have black friends who were ignored by salemen while white people were waited on. They had an old antiquated racist sexist philosophy. They were more concerned about ‘management’ than customers. There’s no reason I should miss them just because they were from Richmond: they certainly didn’t practice the morals and values that reflect Richmond now.

Tom Wulf
Guest
The substandard service that many experienced in Circuit City’s final years was a reflection of poor management decisions at the top. The company dismantled its world-class sales training program in 2001, and then shifted from a commissioned pay structure for sales counselors to an hourly rate in 2003. In the end, the salespeople had little-to-no customer service training and no incentive to wait on every customer. For the first 50 years of its history, Wards/Circuit City was a great company to work for and had a great consumer offer. It’s unfortunate that the poor customer service in its last ten… Read more »
Doug E.
Guest

I also think the discrimination case against them back in the 90s hurt them. I know a lot of people who stopped shopping there because of that.

Tom
Guest

I worked for Circuit City 1999-2000 in the IT department. There were around 800 people working in IT! There were a number of bad business decisions that were made (DIVX, taking apppliances out of the stores, etc.)…..But really struck me was when I was told that the average CC customer came into the store only twice a year! Yet the arrogance of upper management remained….When I got laid off in Feb 2000, it was one of the happiest days of my life!

Ray Lepper
Guest

CC died because the primary goal of the executive team changed from “build a great company and hopefully enjoy the rewards” to “use the company to get rich.” Blunder after blunder made by people who each year understood less about the business they were in. The rise and fall of CC would be a great B-school case. Or a morality play.

Casey Quinlan
Guest
Circuit City was DOA after they fired their entire sales staff of 3400 in March of 2007, telling them they could reapply for their jobs if they were willing to take much lower pay. That cost them a knowledgeable sales presence in their stores, with subsequent low sales figures through the end of 2008. Which is when the body finally fell to the ground. I was a very happy CC customer until the mid-2000s, when their sales staff started to care less about delighting the customer and more about “managing up”. Now we’re stuck with Best Buy, whose store staff… Read more »
Terry Shelton
Guest
Just saw the movie last night and was a closure to 15 years of my life in which I had a great career and made some awesome and lifetime relationships. It is so unfortunate for all the lives impacted. Looking back, it appeared as if some of it was intentional. There is no way so many people were that blind. One thing I wish the movie had done or could have was to interview members of the board. What did the board do in all this? Oh wait, they are sworn to secrecy and would never have any accountability for… Read more »
Betsy Wade
Guest

I watched the movie and learned a lot. I am a 17-year employee and spent hours trying to make the customers have an awesome experience. I have never worked with so many dedicated, passionate, hard-working people. It’s a shame that someone took their eyes “off the prize” and didn’t realize what really mattered.
I am blessed for my time at Circuit City Stores, and I am glad that Mr. Wulf helped to give us some closure on this heartbreaking experience.

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