Brilliant Galtian genius
by digby
If you want to see the perfect example of how the ghost of Ayn Rand is destroying American commerce look no further than this:
The Sears chairman, who lives in a $38 million mansion in South Florida and visits the campus no more than twice a year (he hates flying), is usually staring at his computer when the camera goes live, according to attendees.
The executive in the hot seat will begin clicking through a PowerPoint presentation meant to impress. Often he’ll boast an overly ambitious target—“We can definitely grow 20 percent this year!”—without so much as a glance from Lampert, 50, whose preference is to peck out e-mails or scroll through a spreadsheet during the talks. Not until the executive makes a mistake does the Sears chief look up, unleashing a torrent of questions that can go on for hours.
In January, eight years after Lampert masterminded Kmart’s $12 billion buyout of Sears in 2005, the board appointed him chief executive officer of the 120-year-old retailer. The company had gone through four CEOs since the merger, yet former executives say Lampert has long been running the show. Since the takeover, Sears Holdings’ sales have dropped from $49.1 billion to $39.9 billion, and its stock has sunk 64 percent. Its cash recently fell to a 10-year low. Although it has plenty of assets to unload before bankruptcy looms, the odds of a turnaround grow longer every quarter. “The way it’s being managed, it doesn’t work,” says Mary Ross Gilbert, a managing director at investment bank Imperial Capital. “They’re going to continue to deteriorate.”
How in the world could something like this happen? The man is obviously a brilliant entrepreneur, a job creating genius. Well …
Many of its troubles can be traced to an organizational model the chairman implemented five years ago, an idea he has said will save the company. Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.
Shocking how infrequently any of that crap actually works, isn’t it?
You have to read the whole thing to get the full picture of this man’s pathology. I suppose it isn’t all that surprising that someone who got his philosophy of life from an overwrought romance novel that would make Jackie Collins blush would base his business plans on pop culture, but this man has taken it to a new level. Apparently, he is just as influenced by “Moneyball”, “Freakonomics” and “The Social Network” — so much so that he hired people involved in the first two (for no apparent reason) and wants to turn the Sears website into a sort of Facebook community. He even has a fake persona he uses on it by the name of “Eli Wexler.”
[F]ormer executives in Sears’s digital group say that while some of Lampert’s suggestions were forward-thinking, he barraged the department with quixotic demands. Lampert constantly cooked up ideas: BlackBerry apps, netbooks in stores, and a massive multiplayer game for employees. He ordered the IT department to build a proprietary social network, called Pebble, which he joined anonymously under the pseudonym “Eli Wexler.” (An Eli refers to someone who attended Yale.) Lampert’s intention, former colleagues say, was noble: He wanted to engage with employees and find out what was happening across the company.
It quickly became clear that Eli Wexler was a little too engaged on Pebble. He left critical comments on other people’s posts, according to more than 20 former employees; he even got into arguments with store associates. Word got around that Wexler was Lampert. Bosses started tracking how often employees were “Pebbling.” One former business head says her group organized Pebble conversations about miscellaneous topics just to appear they were active users. Another group held “Pebblejam” sessions to create the illusion they were using the network.
Because when you think of social media, you naturally think of Sears…
It’s a fascinating tale of megalomania and hubris. The Sears brand may not be worth salvaging after all this. But it is a major brand, one that has been at the heart of American business for over a century. And this overrated Randroid weirdo is rapidly destroying what’s left of it, mostly out of a bone deep conviction in his own brilliance. After all, he’s a multi-millionaire … how could he not be?
h/t to RP