Yet another HMV post.
If you teach business studies and want a world class example of strategic failure, it is hard to find a better example than HMV. Never did the tag of, “too little, too late” seem more appropriate. Unfortunately, it was equally appropriate 5, even 10 years ago. Looking at recent news on HMV, leaves me staggered to understand how a leader, a board, a whole company can be so out of touch with its market, its customers and reality.
Ask ANY 18 year old A-level business studies student what is wrong and they will tell you. Heck, ask my 7 year old. He knows what the problem is.
Furthermore he can probably detail a better response than HMVs leadership has been able to muster over the last decade.
So why against this glaring view of reality is HMV failing to take the actions it needs to?
This is a reality distortion field that Jobs would have envied.
There is no shortage of advice on what needs to happen, from me, from Interacter and from a wealth of people who will say basically the same things but charge you a lot more money for the advice.
The problem isn’t the advice. It is this …
In order to accept the advice, you need to accept that their current view is wrong. HMV is clinging to an outdated view of its role, relevancy and value. Perhaps HMV thinks that its suppliers and bankers would lose confidence. I doubt it. I am sure they all know what they are dealing with. That is a company that epitomises the phrase ‘dead man walking’, but one in which they see some potential to reinvent itself. And in the mean time, as long as it pays its bills, it has a chance.
This is as delusional as the habitual credit card abuser, thinking that just one more card will solve their problem. It only makes the problem worse.
So, I’ll keep my post short and advice short.
Act now. Do something that matters. Show your customers you want to change and can change. Be bold. Engage them. Embrace them. Connect with them. Accept that you have failed to do this for the last 20 years (or certainly since you got rid of local buyers who stocked what customers want). Show some vision. Accept that the company in its current size cannot continue, so define a workable model that is honest about what is achievable.
I am not writing off HMV quite yet, but in taking this view I am pretty much defying logic, business history and an extrapolation of were we are today.
HMV will soon reach the point where its ability to borrow, to invest, to reinvent and to define a new path is gone. A weak performance over Christmas 2012 would accelerate this. Even a strong performance (with a business model that everyone knows is dying) can only stave off the inevitable.
There are one group of winners from this … business study teachers get a great outcome whether HMV survives or not.