From Hedgehogs to Warthogs
An exclusive interview with
Circuit City CEO Philip Schoonover
Last week Circuit City announced they were firing 3,400 of their employees because they were making too much money. They company told the dismissed employees they could reapply, in ten weeks, for any openings at Circuit City. Presumably at a wage lower than their original pay scale.
In an exclusive interview with CEO Philip Schoonover, we find out what lies beyond good to great.
The Cantankerous Consultant: As most readers of this blog undoubtedly know, Circuit City was one of the cases cited in the landmark book, Good to Great by Jim Collins. How do you explain this recent personnel move in light of that book? Haven’t you lost your way from being cited in Good to Great?
Schoonover: Well, I went back and really studied what Jim Collins had to say. For example, he talks about getting the right people on the bus and asks, “If compensation is not the primary driver for the right people on the bus, then what are the primary elements in getting and keeping the right people on the bus? What role does compensation play?”
It occurred to me, “Hey, we just don’t understand the role compensation plays for the vast majority of our employees. We need to find out!” So we devised this layoff as a grand corporate experiment. Lay off a bunch of employees but give them the chance to reapply for their jobs at lower pay. That way we can observe performance, morale and other factors on the same people operating under two different pay scales. I’ve already been asked by Harvard Business Review to write an article about this.
The Cantankerous Consultant: Downright brilliant! So by conducting this experiment you are really building a dynamic learning environment?
Schoonover: Exactly! The knowledge we gain from laying-off those employees will offset any pain they feel.
The Cantankerous Consultant: No pain, no gain! Got it. Another concept brought forward by Jim Collins is the concept of Level 5 leadership. Any comments on how that relates to the layoffs.
Schoonover:: It is directly relevant and I’ll tell you why. Jim Collins notes that humility is a hallmark characteristic of a Level 5 leader. Think about it, only the most self-effacing of our laid-off employees will choose to apply for their old jobs at a lower salary. Those that do reapply are, by default, possessive of great humility.
Now I’ve been getting a lot of heat from the press because of this. But I’m determined to go through with this. After all, it’s not the heat but the humility that counts.
The Cantankerous Consultant: It also sounds like a great way to ensure you’ve got the right people on the proverbial bus.
Schoonover: Yes, absolutely. When we’re done we’ll have the most incredibly humble busload of employees you could ask for.
The Cantankerous Consultant: Okay. So what’s going to be the hardest part of the trip for this humble bus?
Schoonover: All the road kill!
The Cantankerous Consultant: Is there any particular animal that predominates as road kill?
Schoonover: Yeah, hedgehogs. You’d be amazed, I’d say at least two-thirds of the road kill we see are hedgehogs. They just curl into a ball on the road as if that’s going to protect them. Dumb animals! Foxes, on the other hand, are never road kill. They’re too smart and fast to get nailed.
The Cantankerous Consultant: Your salary is listed at $1.42 million. What can possibly say to your employees under the current circumstances?
Schoonover: I’d like to say to our laid-off employees during these challenging times: Let them eat Cake Mania, a fun electronic game on sale for only $19.99!
The Cantankerous Consultant: Any final observations or comments for our readers?
Schoonover: Actually, I’d like to address my comments to Jim Collins. As I mentioned before, it seems most of the roadkill are hedgehogs. That suggests we need to rethink that story of the hedgehog and the fox. Quite frankly, I don’t think hedgehogs cut it in today’s hyper-competitive world.
The Cantankerous Consultant: If not the hedgehog, then what?
Schoonover: Well, how about the Warthog Concept?
The Cantankerous Consultant: Warthog Concept...has a ring to it. I like it! And by the way, one of my favorite wines is the Warthog Pinotage from Angelini Wine of South Africa.
In an exclusive interview with CEO Philip Schoonover, we find out what lies beyond good to great.
The Cantankerous Consultant: As most readers of this blog undoubtedly know, Circuit City was one of the cases cited in the landmark book, Good to Great by Jim Collins. How do you explain this recent personnel move in light of that book? Haven’t you lost your way from being cited in Good to Great?
Schoonover: Well, I went back and really studied what Jim Collins had to say. For example, he talks about getting the right people on the bus and asks, “If compensation is not the primary driver for the right people on the bus, then what are the primary elements in getting and keeping the right people on the bus? What role does compensation play?”
It occurred to me, “Hey, we just don’t understand the role compensation plays for the vast majority of our employees. We need to find out!” So we devised this layoff as a grand corporate experiment. Lay off a bunch of employees but give them the chance to reapply for their jobs at lower pay. That way we can observe performance, morale and other factors on the same people operating under two different pay scales. I’ve already been asked by Harvard Business Review to write an article about this.
The Cantankerous Consultant: Downright brilliant! So by conducting this experiment you are really building a dynamic learning environment?
Schoonover: Exactly! The knowledge we gain from laying-off those employees will offset any pain they feel.
The Cantankerous Consultant: No pain, no gain! Got it. Another concept brought forward by Jim Collins is the concept of Level 5 leadership. Any comments on how that relates to the layoffs.
Schoonover:: It is directly relevant and I’ll tell you why. Jim Collins notes that humility is a hallmark characteristic of a Level 5 leader. Think about it, only the most self-effacing of our laid-off employees will choose to apply for their old jobs at a lower salary. Those that do reapply are, by default, possessive of great humility.
Now I’ve been getting a lot of heat from the press because of this. But I’m determined to go through with this. After all, it’s not the heat but the humility that counts.
The Cantankerous Consultant: It also sounds like a great way to ensure you’ve got the right people on the proverbial bus.
Schoonover: Yes, absolutely. When we’re done we’ll have the most incredibly humble busload of employees you could ask for.
The Cantankerous Consultant: Okay. So what’s going to be the hardest part of the trip for this humble bus?
Schoonover: All the road kill!
The Cantankerous Consultant: Is there any particular animal that predominates as road kill?
Schoonover: Yeah, hedgehogs. You’d be amazed, I’d say at least two-thirds of the road kill we see are hedgehogs. They just curl into a ball on the road as if that’s going to protect them. Dumb animals! Foxes, on the other hand, are never road kill. They’re too smart and fast to get nailed.
The Cantankerous Consultant: Your salary is listed at $1.42 million. What can possibly say to your employees under the current circumstances?
Schoonover: I’d like to say to our laid-off employees during these challenging times: Let them eat Cake Mania, a fun electronic game on sale for only $19.99!
The Cantankerous Consultant: Any final observations or comments for our readers?
Schoonover: Actually, I’d like to address my comments to Jim Collins. As I mentioned before, it seems most of the roadkill are hedgehogs. That suggests we need to rethink that story of the hedgehog and the fox. Quite frankly, I don’t think hedgehogs cut it in today’s hyper-competitive world.
The Cantankerous Consultant: If not the hedgehog, then what?
Schoonover: Well, how about the Warthog Concept?
The Cantankerous Consultant: Warthog Concept...has a ring to it. I like it! And by the way, one of my favorite wines is the Warthog Pinotage from Angelini Wine of South Africa.
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