Circuit City’s long arc from cradle to grave began in 1949, when only a handful of US cities had TV. Within 15 years black and white morphed into color and radios into hi fi and Americans became quickly hooked on consumer electronics.
Along with product profusion, came lifestyle changes and a cascade of new retail formats: discount stores, warehouse showrooms, big box retailers and finally on-line internet behemoths. As the products, the customers and the competition changed, retailers needed to reinvent themselves to survive.
For almost fifty years Circuit City successfully navigated these treacherous currents. When its ability to understand and respond to changing market conditions failed and credit markets seized up, it filed for bankruptcy, and in early 2009 closed all of its 640 stores.
How could that happen? Business strategy is made by human beings and each brings to the process his or her Habits of Mind. Curious people find opportunities that others miss. Optimists see the world differently from paranoids. Success in business is the art and science of positioning one’s organization in relation to the outside world to meet human needs and make a profit. This book examines the Habits of Mind that led to Circuit City’s success and to its demise, and suggests lessons that leaders can learn to successfully navigate the tides of change.
Alan Wurtzel, son of founder Sam Wurtzel, joined Circuit City in 1966, and became CEO in 1972. As a newly minted CEO, Wurtzel immediately created a brutally honest, five year strategic plan that simplified the nearly bankrupt company. He unloaded unsuccessful acquisitions, expanded the few winning divisions, and carefully preserved and augmented the distinct employee culture his father had created. This positioned the company for unprecedented success. By 1977, the company had sales of $72 million, and net operating profits had nearly doubles the previous high. When Alan retired as CEO in 1986, Circuit City sales totaled $1 billion.
With the demise of Circuit City, Alan compared the experience to “losing an adult child.” Wurttzel’s story is therefore deeply personal, but offers the rare perspective of a company insider in the role of a reporter, an outsider looking in. “I wrote this book,” he said, “ because I needed to understand what happened and why.”
Praise for the book
"From its humble beginnings as a Mom and Pop store with less than $13,000 of investment it became the best performing Fortune 500 Company for any fifteen year period between 1965 and 1995. In his remarkable book, Good to Great, Jim Collins points out that from 1981 to 2000, Circuit City’s stock out performed GE, under the legendary Jack Welch, by six times. Alan Wurtzel led Circuit City to extraordinary success, one of a small handful of Fortune 500 companies to make a leap from good to great. Years later, Circuit City ceased to exist. Any understanding of what makes great companies tick must also consider the question of how they can fall. Alan Wurtzel’s own analysis of the company he built to greatness, and its subsequent demise, adds to our understanding."
Author of Good to Great and How the Mighty Fall
“Circuit City, founded when the South’s first TV station opened in Richmond in 1949, went on to become an iconic Virginia company. It was the premier TV and appliance retailer in America with more than 500 stores from coast to coast and sales exceeding $10 billion. Alan
Wurtzel, the CEO who conceived the strategy that took his family business from Good to Great, focuses on the development of business strategies and the habits of mind that brought Circuit City to the top and then to the dust bin of Virginia business history. He tells the dramatic story in a compelling way.”
Mark R. Warner
U.S. Senator from the Commonwealth of Virginia
“Alan Wurtzel’s Good to Great to Gone adds color and context to many of the compelling business strategy principles outlined in the Pursuit of Excellence.”
Robert Waterman, co-author
In Search of Excellence
“Alan Wurtzel has written a thoughtful, passionate insider’s commentary on the rise and fall of Circuit City Stores. The 60 year history of the consumer electronics industry and the twists and turns of one of its leading retail players is an instructive and engaging tale. From the detailed observations about subjects like marketing and compensation to the broad conclusions about strategy and governance, there is much to learn from the story Wurtzel tells and the analytic principles he uses to make sense of it.”
Dean Emeritus of The Darden School, University of Virginia
“The story of Circuit City is a compelling and fascinating case study in strategic management and decision making. As readers, we gain a window into six decades worth of managerial scenarios, set against the exciting and fast-paced world of consumer electronics retailing. Author Alan Wurtzel, son of the company’s founder and a longtime CEO, brings a long-term perspective and refreshing candor to his analysis of how the choices and habits of mind of an executive leadership team can take a company from Good to Great to Gone. I highly recommend this book to both business professionals and scholars.”
Dean of the McIntire School of Commerce