Reuters reports that retailer Circuit City Stores reported a wider first-quarter loss Thursday as sales fell due 11.3%% established stores. The consumer electronics chain is also suspending its dividend to keep capital available for its turnaround efforts. Compare that to Best Buy, which reported a better-than-expected quarterly profit this week on rising sales and cited market share gains.

I share this information with you because it directly relates to leadership and people. Several months ago in an effort to save money Circuit City decided to fire several thousand higher paid employees. Many of these employees had been around for a while and many of them truly understood what they were selling and could help customers. Circuit City, in my opinion, took the easy way out – in the short term. But as I predicted back then, this isn’t going to have a happy ending for two reasons.

1) When you gut your stores of people who can help customers the customers go away.
2) When you fire people using questionable criteria those left with a job start looking over their shoulder worrying about their own jobs. They certainly will not go out of their way to help the company or customers knowing they might get fired at any minute.

There are so many lessons here. Let’s just focus on this. When you do not treat your employees with trust and respect there is a low probability that the business will enjoy superior results.

Stay Inspired…

This entry was posted on Thursday, June 19th, 2008 at 2:58 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.