Richard Connor
rconnor@bizpress.net
It was fitting that the Boston Red Sox won the World Series, and at home in Fenway Park no less, in the same week RadioShack opened its concept store in Sundance Square. The two, the Sox and the Shack, have much in common. Boston was the birthplace of RadioShack, for starters. The Red Sox were in rebuilding mode this season after dumping manager Bobby Valentine and trading for new players.
RadioShack hired a new leader, Joe Magnacca, and he is recruiting new talent. Let’s hope RadioShack will have the same results as the Red Sox. The Red Sox were the worst team in their division last year and among the worst in all of baseball. Now they’re the best. RadioShack’s makeover is in its infancy. Whether the company can follow the Red Sox’ path to the top remains to be seen, but it’s off to a great start. Demonstrating the traits that great managers possess, Magnacca already is changing the culture and strategy of the company. The moves he has made show that he is quick, bold, decisive, innovative and not afraid of risks. Just months after taking over the company last summer he opened a new concept store in the heart of the toughest city in the world, New York.
Once a leader as an electronics retailer, RadioShack became tired over the years and fell out of step with the times. The company had a rough third quarter but you can’t hang that on Magnacca and his team. The seeds of many bad quarters were sown long ago. Now, the company not only has new leadership but also a new round of financing that should help RadioShack reposition itself in the marketplace. Think about it: Magnacca worked on this intricate and complex refinancing plan while also building new concept stores – making the store on Camp Bowie a test site – and hiring a new executive team. His predecessors spent too much time on bricks and mortar, not to mention trying to build a personality cult. You could argue that the company should have been spending its money on research and development and marketing when, instead, it built a Taj Mahal office complex in downtown Fort Worth. That “corporate campus” was a total failure and a tremendous cost burden to the company. Even worse than costing money to stockholders and the city of Fort Worth – which subsidized RadioShack’s corporate boondoggle with exorbitant tax breaks – the construction of those offices exposed the company’s serious lack of priorities and focus. If RadioShack had shown the same strategy and flair designing and stocking its stores that it displayed in conjuring up its corporate campus the company might be doing better today.
It’s a well-known theory that the beginning of the downfall of many companies begins with tall cranes and construction workers building new corporate office buildings. When buildings go up, profits go down. While you are pondering this, throw Pier 1 into the mix. Magnacca has concentrated on RadioShack’s core business, not on his corporate suite. Putting a concept store in the heart of the company’s hometown was savvy. It is not likely to contend for highest grossing retail honors among RadioShack stores but it will stand as a symbol of the company’s commitment to its loyal constituency of local shoppers and business leaders. And when businessmen and women need something for their office or home they can walk across the street to the new store. After all, it is almost directly across from the two largest office buildings in town, the D.R. Horton and Wells Fargo towers. The company has put its money where its heart is. Being unabashedly parochial, I’d love to see the company puts its name and some money into our rodeo and stock show. If he does this, Magnacca won’t just be a terrific out-of-the-chutes manager like the Red Sox’ John Farrell; he’ll be the slugging David Ortiz, whose .688 batting average was the second-best in World Series history and earned him the Series’ Most Valuable Player trophy. Also like the Red Sox, Magnacca has overhauled the RadioShack lineup. Bringing in key players from other big-name companies, he’s creating his own culture while mixing in innovative executives from diverse backgrounds and other business cultures. Mixing them all together, as he did with that ice cream he created for the victorious team from Donald Trump’s “Celebrity Apprentice,” Magnacca just might be creating a Sox-like winning formula.
There was a significant moment at RadioShack’s Sundance store opening. It was quiet and subtle but had the momentum of an earthquake that starts with a small rumble and quickly becomes loud and overpowering. An observer at the event watched Magnacca and his new team. He watched and he listened. “I’ll tell you one thing,” he said, “I do not know what’s going to happen with RadioShack but I know this: The people who work for Magnacca love him.” Change. Decisiveness. Leadership that’s firm and compassionate, with the ego checked at the door. Those are the keys to a great beginning and a winning strategy. Go Red Shack.
Contact Connor at rconnor@bizpress.net