The Real Reason Blockbuster Failed

[00:00:06] . This week I'm speaking to James Keyes, former CEO of two internationally recognized Fortune

[00:00:35] 500 companies, 7-Eleven and Blockbuster. Jim is not only a global business leader, but

[00:00:43] a philanthropist, educator, artist, musician, commercial pilot and modern renaissance man.

[00:00:52] His other business interests cover a broad range of industries from retail, consumer products,

[00:00:59] tech, healthcare, cybersecurity and much more. He sits on several public company boards

[00:01:07] and serves as a board advisor to a venture capital firm as well as a number of startups.

[00:01:12] Jim is a personification of the American dream. He came from humble beginnings and really credits

[00:01:19] a lifelong commitment to education for shaping his life and empowering him with the mindset

[00:01:25] to achieve great things. He was a founding director of the Dallas Education Foundation

[00:01:30] and is also the founder of the Education is Freedom Foundation.

[00:01:35] Jim has just released a new book called Education is Freedom, The Future is in Your

[00:01:41] Hands. We're going to talk about his new book, we're going to get his views on disruption

[00:01:47] and business transformation and Jim is also going to dispel some of the myths about what

[00:01:52] went wrong at Blockbuster and more importantly what we can learn from its demise. I really

[00:01:58] love this conversation with Jim and I'm sure you're going to get a ton of value

[00:02:02] from listening to him so let's dive in. Jim, welcome to Retail Disrupted.

[00:02:13] Thank you, Natalie. It's great to be with you.

[00:02:15] It's such a pleasure to have you here on the show, Jim. I know we're going to talk a lot

[00:02:18] about your career and your time at Blockbuster and 7-Eleven but maybe just to get us started,

[00:02:24] could you share a few words about yourself? Sure, thank you. I've really been blessed with

[00:02:31] a fascinating journey. I guess I would have to characterize this. Out of graduate school,

[00:02:38] I ended up with a major oil company and I was a bit of a fish out of water because

[00:02:43] I wasn't an engineer and yet it was tremendous learning experience. It turns out that that

[00:02:50] was my open window to 7-Eleven. They had acquired a petroleum company to supply gasoline

[00:02:59] to 7-Eleven stores and they needed a new team of people to come in and lead that

[00:03:05] exercise. So I was brought in to lead a strategic planning function for that new division of the

[00:03:14] Southland Corporation, the parent company of 7-Eleven and it turned out to be a great

[00:03:19] opportunity. Sometimes timing is very important in everyone's career. My timing ended up being

[00:03:25] perfect in that case because the PC had just been invented so not only was I equipped with

[00:03:32] a set of tools coming from Columbia Graduate School of Business but I also had the technology

[00:03:38] tool that no one had experienced. So I was able to run analyses, reports,

[00:03:47] things that would take normally weeks to do. I was able to do in a matter of minutes

[00:03:52] with this tool. It made me look like a genius but it was really the technology that helped me.

[00:03:59] So from 7-Eleven I ended up with what went from great to catastrophic. We had done a

[00:04:08] leveraged buyout shortly after I arrived and so this high-flying public company,

[00:04:14] New York Stock Exchange Company now was private with $4 billion of debt at between 16.5% and

[00:04:22] 17% interest if you can imagine. It was just a matter of time before that crushing

[00:04:31] weight of debt repayments ended up forcing the company into a chapter 11 restructuring by 1991.

[00:04:41] So I thought my career there was probably over. It turns out it was the best thing

[00:04:48] that could have happened. So a lot of what you'll hear in both my book and when I speak about

[00:04:55] opportunity, I coined the expression change equals opportunity because that really represented

[00:05:03] my whole career. Every time I would encounter some catastrophic change inside the silver lining

[00:05:10] ended up being great both professionally, personally, and for the company.

[00:05:14] So Jim I'm glad you brought that up so early on in our conversation because it was one of

[00:05:19] the things I wanted to ask you. When I was doing my research for this conversation I read that you

[00:05:26] didn't interpret the acronym CEO as chief executive officer but as you just called out

[00:05:32] change equals opportunity. So can you tell us a little bit more about that? How important is

[00:05:38] it for businesses to embrace change and what's the risk of inaction?

[00:05:44] It changes the essence of all commerce if you think about it. And as much as people resist

[00:05:49] change, fear change, hate change, ultimately all of business starts and ends with something

[00:05:59] changing and someone responding to that change and turning it into profitability.

[00:06:04] I have a favorite example and I love your concept of retail disrupted.

[00:06:11] I'll give you a great example. I use this all the time especially when I talk to young people

[00:06:16] about how fascinating retail can be. Think about the purest form of retail. You're walking

[00:06:24] down the street in New York City, blankets on the sidewalk, fake handbags, probably someone from

[00:06:32] another country selling fake handbags to tourists in New York and all of a sudden one drop of rain

[00:06:39] falls. What happens? Handbags disappear, out come the umbrellas. That is retail. That is responding

[00:06:50] to the customer's needs real time. That is disruption in retail that causes change and

[00:06:58] creates commerce, creates opportunity. So if that guy on the streets of New York

[00:07:05] can respond so quickly to changing customers' needs, why can't Walmart or Target or 7-Eleven?

[00:07:13] Well what happens is the bigger the organization, the bigger the company,

[00:07:17] the more inertia sets in and the slower the response is to a changing customer need.

[00:07:22] It's not real time. Our secret sauce at 7-Eleven was the use of technology and this was,

[00:07:30] I wish I could say I invented this but our Japanese licensee perfected the use of technology

[00:07:37] to have more immediate response to change because they had very small stores, very little

[00:07:43] inventory, no safety stock and they had to be very precise in both the delivery of product

[00:07:49] just in time but the availability of product regardless of the conditions, rain, shine,

[00:07:56] whatever and they used technology to be able to be better at satisfying those customer needs

[00:08:04] than any of their competitors. That was response to change that created shareholder value in a

[00:08:10] huge way. Yeah that's really interesting because I think here we are today in 2024 and we just

[00:08:17] take technology for granted and the fact that it enables retailers to become smarter, leaner,

[00:08:23] more efficient and from a customer experience perspective it makes our experiences more

[00:08:28] relevant, even more seamless, more personalized so it's just kind of the way that we operate

[00:08:34] these days but I want to ask you about Blockbuster. Something I talk about regularly

[00:08:40] with clients and in the media is this idea of retail Darwinism. So evolve or die, disrupt

[00:08:47] or be disrupted and Blockbuster has become the poster child for what happens when you fail to

[00:08:53] adapt and when you stand still. One of the co-founders of Netflix Mark Randolph said recently

[00:08:58] that Blockbuster learned its lesson too late and if you're unwilling to disrupt yourself

[00:09:03] there's always someone willing to disrupt your business for you. Now Jim you led the business

[00:09:08] in some of its final years. Would you say that's a fair assessment or is the picture a little bit

[00:09:14] more nuanced than that? The picture is far more nuanced and there's far more learning opportunity

[00:09:21] in the Blockbuster case than just attributing it to slow response to change because it was

[00:09:29] not slow response to change. The change wasn't even really evolving yet when I arrived in 2007

[00:09:39] streaming was not yet because of bandwidth limitations. Streaming was really not yet

[00:09:48] available to the mainstream. There was a little bit of streaming but heavy buffering,

[00:09:53] long time downloads etc etc. Netflix was doing DVDs by mail. People give them a lot of credit.

[00:09:59] I give them a lot of credit for the disruption of DVDs by mail. That was great but it was

[00:10:03] nothing that Blockbuster couldn't do and didn't do. They matched the same model and they even had

[00:10:10] a competitive advantage because with Blockbuster by mail, if you didn't like the movie that you

[00:10:16] ordered a week ago or a few days ago, you could take it to the store and exchange it

[00:10:21] for something that you wanted to see. So it was absolutely an advantage Blockbuster. They kept

[00:10:27] up with technology. The first thing I did when I arrived in 2007 was to buy a streaming video

[00:10:33] company, one that had superior offerings to Netflix because Netflix was just thinking about

[00:10:40] streaming that didn't yet have an offer. We bought a company called Movie Link that had

[00:10:46] 3,000 titles already digitized, mostly new releases, newer releases. So again,

[00:10:53] advantage Blockbuster. What people forget is that we were positioned very, very well to compete

[00:11:01] with Netflix. We had something called Total Access, DVDs in store by mail, kiosks and a

[00:11:08] streaming video company that we renamed Blockbuster on demand. So you might say,

[00:11:13] well what happened then? Why did Netflix prevail? Well what happened was the 2008

[00:11:19] financial crisis and Lehman Brothers meltdown in September of 2008 right at the same time that we

[00:11:27] announced doubling of EBITDA, tripling of net income and a solid competitive platform

[00:11:35] versus Netflix. But we had a billion dollars of debt, a third of which was due in the year 2009.

[00:11:43] So again, change equals opportunity. What did that mean? It meant we had to be much more

[00:11:50] aggressive in finding a partner because of our balance sheet weaknesses. So we were talking with

[00:11:56] Google, with AT&T, we were talking with Dish networks, we were talking with a number of

[00:12:05] strategic partners that were positioned very well to help make us the predominant aggregator,

[00:12:14] if you will, which doesn't exist today. Complete aggregator of all streaming video.

[00:12:20] What happened was in the middle of this financial crisis our studio partners

[00:12:28] got scared and basically pulled our credit terms from 90 days to cash. When one did,

[00:12:35] the next followed and the next and it was a domino effect and it pretty much forced us into

[00:12:40] a restructuring. Again, not a catastrophic thing because we were able to avoid a chapter

[00:12:45] seven complete liquidation and we emerged from bankruptcy with the sale of the company to Dish

[00:12:52] and Dish at that time was much better prepared with their distribution capabilities to compete

[00:12:59] for streaming video capabilities. Now Dish then ultimately decided to go in a different direction.

[00:13:04] That was their choice. They wanted perfection. Bandwidth wasn't yet there. They had a better

[00:13:10] vision for the future and you never know, Dish may one day relaunch a better version of

[00:13:16] Netflix. Who knows? I mean a blockbuster to compete with Netflix and others, but who knows?

[00:13:23] Point is what appears on the surface is seldom what is reality and there's far more learning

[00:13:33] in the blockbuster case study than a simple matter of slowness to respond to change.

[00:13:39] It's a far more complex business challenge of cash management, balance sheet, debt,

[00:13:47] refinancing, financial market, macro environment, etc.

[00:13:52] Yeah, it sounds like it was the perfect storm then because yeah, it is interesting hearing

[00:13:57] what you're saying because blockbuster did adapt. It did ride some pretty major waves

[00:14:01] of disruption, just transitioning from video to DVD and then managing the whole

[00:14:06] Blu-ray versus high def debate and then as you say, you had your DVD by mail business.

[00:14:12] You went and eliminated late fees which I'm sure made customers very happy but I'm guessing

[00:14:18] that wasn't great for your bottom line at a time when you were already feeling the financial

[00:14:22] pressure. So yeah, that's so interesting. Do you think it could have been saved?

[00:14:27] I think it very well could have been saved. It was a question of fear unfortunately. I talk

[00:14:34] a lot in my book about fear. I tell the blockbuster story and fear is a killer. It's

[00:14:38] a killer of individual careers and it's a killer of corporations because what happens is

[00:14:45] the uncertainty of what may happen causes people to be very conservative at times

[00:14:52] and in a time of financial crisis, people worry about their job. They worry about

[00:14:57] what's going to happen and the studios unfortunately reacted in a way that really

[00:15:06] represented, I believed at the time, some irrational behavior because they for the long term

[00:15:15] killed the cash cow if you will because that rental window could have been sustained,

[00:15:21] that they had in the DVD world could have been sustained in a far more profitable way

[00:15:27] in the streaming world had they been able to stay the course. Now I'll take on the challenge

[00:15:32] as well of communications because during a time of crisis, communication is critically

[00:15:37] important. Could I and should I have communicated more effectively with the studios

[00:15:42] to keep them on board? Yes but hindsight's 20-20. I didn't think they would panic

[00:15:49] and pull the plug and kill our credit terms. Yeah, I know it's so interesting and as you say,

[00:15:55] it's easy to say with hindsight but I just want to touch on the one blockbuster store

[00:16:02] that's still trading. It's in Oregon and it's the last one standing. You walk through the

[00:16:09] door and it's as if you're transported back in time. So the computers are from the 90s,

[00:16:14] they're still floppy disks, there's no internet. It's a totally analog experience and it's become

[00:16:21] a global tourist destination which is just fascinating to me. So you're getting,

[00:16:26] they're getting visitors from as far as Australia and South Korea and there's a huge section of

[00:16:31] the store that's dedicated to selling blockbuster merchandise. So Jim, what does this tell us

[00:16:36] about the blockbuster brand and do you think it could ever be revived in a more meaningful

[00:16:43] way or a more kind of fun and engaging way? I do think it's clearly, it's an iconic brand

[00:16:51] and I had the privilege of leading two iconic brands. Brands we grew up with as young people.

[00:16:58] Friday night was a big Saturday night, big blockbuster night. You take a date there and

[00:17:04] pick a movie and maybe stop at 7-Eleven on the way home to get some snacks to watch the

[00:17:09] movie. So I really have a tremendous amount of affection for both of those brands. Do I believe

[00:17:18] the blockbuster brand could come back? Yes, I do. There is still a gap in the market.

[00:17:25] Netflix, I have tremendous admiration for Reid and the team over there, what they've accomplished,

[00:17:31] tremendous success. But their business model has always been a bit challenged.

[00:17:37] Starting with DVDs by mail, it was a challenging business model and it was somewhat limited.

[00:17:41] When they went streaming, they had a very small library of mostly old movies. To put that into

[00:17:48] contrast, the blockbuster store, 80% of the blockbuster revenues came from new releases in

[00:17:54] the last 60 days. So the old movies were always popular but most of the revenue came from

[00:18:01] the popularity of new releases. Netflix didn't have those. Still it's challenged in many ways

[00:18:07] to be able to stream those. So they branched out and started making their own content. Well,

[00:18:12] that's great but that's a very different business model. Now you're into creation

[00:18:18] with the studios and competing with the studios for creative content which is a very different

[00:18:24] game and a very challenging game. To their credit, they've kept up. But what is in the

[00:18:29] future? There's no aggregator right now. There is no online player that can offer what blockbuster

[00:18:37] offered which is old movies, new movies, TV shows, anything you'd want to see, one simple

[00:18:43] shop. I called it Convenient Access to Media Entertainment. Not unlike 7-Eleven, right? We

[00:18:50] were in the business of Convenient Access to Media Entertainment. That means all media

[00:18:55] entertainment. Now no one yet has cracked the code on providing that solution. Will the

[00:19:01] blockbuster brand ever come back? If they do, I hope that that will be their challenge,

[00:19:07] that they want to be just like the store, the one-stop shop, the most convenient place

[00:19:13] to get your favorite content. Yeah. And I completely agree with you in terms of around

[00:19:19] having a strong emotional attachment to the brand because I remember going with my dad and

[00:19:23] my brother on a Friday night just like you say, going with them, picking out a movie,

[00:19:27] getting popcorn. There were no arguments when we got home about what movie we were going to

[00:19:31] watch. Not like now with my kids that have access to everything and there's too much

[00:19:35] choice. But it was just a nice slower pace thing that you did. And I guess in some ways

[00:19:40] it's similar to Polaroid in that Polaroid isn't just about taking pictures but it is

[00:19:45] about making memories. And I think blockbuster is similar. Now just to shift gears a little

[00:19:51] bit, Jim, I want to ask you about diversification and this idea that you have to continuously

[00:19:56] evolve to ensure that you're staying relevant, to ensure that you don't go from disruptor to

[00:20:02] disrupted. And if you look at what all the big tech companies are doing now, they're really

[00:20:07] trying lots of weird and wonderful things. They're experimenting, they're failing fast.

[00:20:12] And when they fail, they tend to do it quietly. Amazon, for example, Amazon has a hair

[00:20:19] salon in London. TikTok is experimenting with pop-up shops and Netflix opened a restaurant

[00:20:25] in LA last year. So Jim, what do you make of this diversification? Do you think there's

[00:20:31] a risk of veering too far and potentially losing focus on your core business?

[00:20:37] There's always a risk of veering too far but I think as you've said so well, adapt or die.

[00:20:44] You have to keep up with the changing needs of the customer and they change all the time.

[00:20:49] So experimentation is the best possible way. I mean you can sit around and hire a group of

[00:20:54] consultants and lock them in a room for six months and come up with what they think the

[00:20:59] customer will want but there's nothing that compares to actually trying it, putting it on

[00:21:06] the street and seeing how the customer actually reacts. Not what they say because what they say

[00:21:11] they'll do is often different but how they actually react. I admire their efforts.

[00:21:18] Yeah, and I guess at the same time you still need to have focus because that's what I'm hearing.

[00:21:24] It just seems to be a recurring theme more now than probably ever before just with all

[00:21:28] the retail leaders that I speak to here in the UK and the US and all around the world.

[00:21:33] It's just this idea that you have to know what your strengths are, you have to know what

[00:21:36] makes your brand special, how you differentiate from your rivals,

[00:21:41] what's your value proposition, what are you doing differently and then you have to go and execute

[00:21:45] really well. So I wonder in your time as a retail CEO, how important was focus to you?

[00:21:51] Focus is critically important. It's hard to maintain that focus with the organization. The

[00:21:55] bigger the organization, the more difficult it is. I call it big company disease because

[00:22:02] that's the bigger the company, the more layers of management, the more difficult it is to keep

[00:22:07] everybody on track. That's when the three things that I emphasize all the time which

[00:22:13] is embracing change, having confidence to do something about it and clarity of communications

[00:22:18] both inbound and outbound. Those three elements are critically important for any company but

[00:22:25] the bigger the company, they become even more important because inertia creeps in.

[00:22:30] Communications get bogged down and they get muddled and things get complex and as a result,

[00:22:38] the response to change gets slowed and that's where you see many companies

[00:22:43] begin. They have a life cycle like people. The company will rise, it has a huge period

[00:22:48] of growth then it peaks out and then a lot of times it will decline and maybe even fail

[00:22:53] or go away unless they can keep that life cycle alive with innovation, with focus,

[00:23:01] combination of the two and those three things I think both embracing change and having

[00:23:06] confidence to do something about it but the clarity of communication is critically important

[00:23:10] especially focus both on the core business and the future. Natalie one last thing, this is

[00:23:17] one thing that people missed about the Blockbuster strategy. Everybody said why aren't they just

[00:23:23] going straight to digital? Well, the reality is we had a huge business in physical and we had

[00:23:30] a massive number of stores and those stores were under producing so we had to focus on

[00:23:35] that core business, improve the productivity as you said when they killed late fees they killed

[00:23:41] $80 million of EBITDA almost overnight and we had to replace that lost cash flow to be able

[00:23:49] to invest in the streaming business going forward. Now that's that necessary focus

[00:23:55] and a difficult balance between the core business and focusing on the future. Everyone's faced with

[00:24:02] it but managing that balance is something that you almost have to block out the noise because

[00:24:09] the street of course all they cared about was digital and yet if you missed your earnings by

[00:24:15] a penny you'd get crushed so it was a bit of an inconsistent message coming from investors.

[00:24:22] Yeah, the need for that clarity and that focus but then also that need to have this

[00:24:28] what was especially relevant today this kind of culture of perpetual innovation and continuously

[00:24:33] evolving your offer and changing and following the customer. Now Jim I know you're no longer

[00:24:39] retailer but as a former CEO and also as a consumer I wonder what you make of... Always a retailer.

[00:24:45] Always a retailer and always a consumer. Always a retailer, yeah. Well in that case I'm

[00:24:51] definitely going to ask you this question now so what do you make of retail today? Are there

[00:24:56] any particular technologies or innovations that you are excited about or you think are making

[00:25:02] a difference to the shopping experience? I had the privilege of working with Amazon back in the

[00:25:09] early days. I had partnered with acquired from Tesco, the British retailer, a chain in California

[00:25:18] called Fresh and Easy. They were ready to shut it down but we thought well let's see if we can

[00:25:24] do something with this. It was burning a ton of cash and we didn't know if it was salvageable

[00:25:29] but one of the efforts we made to try to save it was to go to Amazon and say they've installed

[00:25:36] automated checkouts. What a terribly clunky experience self-checkout is today.

[00:25:42] Some people like it, it's still very clunky. Bring up a bushel of grapes now the whole thing,

[00:25:48] you know panics if you've got a bottle of wine now you have to call someone over.

[00:25:53] It's just very challenging but I said well with Amazon couldn't we have the ability to walk around

[00:26:00] the store just like we do online and pull up an image of the can't my phone recognize a product

[00:26:08] and pull up the negative file on your system and I just order it just the way I do online

[00:26:14] and walk out of the store with it. Why can't I do that? That led to what they have now

[00:26:20] called Amazon Go. Now it's still I think kind of clunky the self-service because they have

[00:26:29] I think rather than simplifying it they made it more complicated than it needed to be.

[00:26:37] They have shelves that are sensitive when you pick up all those kinds of things.

[00:26:41] We still aren't yet to the opportunity that all you have to do is take an image with your

[00:26:47] phone of a product say yes and the quantity and walk out of the store. That will happen one day

[00:26:55] and I think those the use of technology for seamless transactions like that will be a

[00:27:03] tremendous benefit for retail so I get excited about it but I do have to share there's one

[00:27:08] downside of technology it's a mistake I see lots of retailers make. There's a tendency to

[00:27:14] say the computer is smarter than people and arguably with AI and with out great algorithms

[00:27:23] one can argue that that's sometimes the case but retailing is such a tactile real time on the

[00:27:32] street at point of sale experience and conditions change constantly so that umbrella guy on the

[00:27:43] street of New York who was selling handbags and pulls out an umbrella when a drop of rain falls

[00:27:48] the computer would have taken two days to figure out or a day at least to figure out hmm there's

[00:27:56] rain coming maybe you should sell some umbrellas. The retailer has eyes and ears and they can

[00:28:03] see and feel a raindrop fall and change their strategy on the fly so the ideal world

[00:28:11] is the combination of data that can come from technology and the eyes and ears of a retailer

[00:28:20] that knows their customer better than the computer will ever know their customer. You

[00:28:24] merge those two things and you've got the ultimate form of retail that's what makes 7-Eleven

[00:28:29] Japan so wildly successful they empowered the employee with technology and terrific

[00:28:37] decision-making tools they didn't take the technology out so what happened with Tesco

[00:28:42] it came to the United States I sat down with the chairman and said what were you trying to

[00:28:45] accomplish he said we mirrored 7-Eleven Japan we built a commissary a fresh food distribution

[00:28:51] center we had density of stores we put state-of-the-art technology in said but guys

[00:28:57] what you did is you took use the technology to take the retailer out of retailing

[00:29:02] and that's a fundamental flaw that many many make they overuse technology and forget the

[00:29:10] importance of that person at the end of the day that curates the technology to make better

[00:29:15] and better decisions. Yeah that's always the worst thing a retailer can do is using tech

[00:29:21] for tech sake and I actually went out to California when those fresh and easy stores

[00:29:26] first open and at that I mean I've been living in the UK for 20 years so you know

[00:29:31] I'm used to prepackaged fruit and veg and then you know sandwiches packaged sandwiches and that

[00:29:36] sort of thing self-checkout but I just I remember walking in and just thinking Americans aren't

[00:29:41] gonna love this this is this has not been done with the local consumer in mind and as you say

[00:29:47] you know self-checkout even today all these years later is still clunky it's still not

[00:29:52] perfect we're even seeing some retailers like booths here in the UK rip out their self-checkouts

[00:29:57] and go back to fully manned checkouts I know in the US there's a lot of retailers like Wegmans

[00:30:02] and Costco and Walmart scaling back and obviously there's the whole you know it problem with it

[00:30:08] exacerbating retail theft I mean there's a lot of a lot of kind of issues at play but I think

[00:30:13] it's so interesting to hear you you talk to the blend of technology and marrying that with

[00:30:19] the human touch and empowering your store associates to make those decisions and when

[00:30:25] they're equipped with the right tech I mean as you say that's a really really powerful

[00:30:28] combo so super interesting okay let's switch gears now and talk about your new book Education

[00:30:34] is Freedom. The book was published in February this year I can see Jim you are holding up

[00:30:40] a copy of the book so I can tell you are ready to talk about it and share your many

[00:30:44] many insights so I will be including a link to the book in the show notes of course for

[00:30:51] our listeners and Jim let's get started what is the book about and what would you like readers

[00:30:57] to take away from it? I think the key is right here not only is the title Education is Freedom

[00:31:03] important because it's not education is about making money yes making money is important

[00:31:11] and it's a byproduct of our education it's absolutely measurable the difference between

[00:31:17] someone who graduates from college or graduate school versus just high school or drops out of

[00:31:22] high school the return is there in spite of fears over the cost the return is there so

[00:31:30] it is all about freedom versus just the income because education gives you the opportunity

[00:31:36] to do anything you want to do and most importantly it gives you options so if your

[00:31:41] choice of career as with mine wasn't great oil industry I wasn't sure I was going to compete

[00:31:47] effectively with my engineer peers I was able to pivot and become a retailer and my background

[00:31:53] was more suited and I found it to be more fun that was a direct result of education giving

[00:31:59] me that flexibility but the other thing that the subtitle is the future is in your hands

[00:32:05] what I mean by that is that literally this is a portal to unlimited learning we haven't yet

[00:32:15] really developed an appreciation because the tools aren't yet perfected to be able to train

[00:32:21] online our digital our education tools are a bit clunky they're not integrated we don't have

[00:32:27] incentives built in like we do in gamification the graphics aren't yet eye-popping love con

[00:32:33] academy is an example but it's deadly dull I believe salcon is is is holed up somewhere

[00:32:40] developing the next iteration as we speak and my guess is it will be a lot more engaging

[00:32:46] there'll be a lot more gamification in it so we're on the cost of massive breakthroughs in

[00:32:53] the use of technology even machine learning to enhance human learning because the machine

[00:32:59] learning can adapt the way it teaches to the way you learn best and and those possibilities

[00:33:06] are just unlimited so I was a living example of the power of education throughout my career

[00:33:14] and not just because I got a degree and a graduate degree my wake-up call and literally

[00:33:20] the origin of the title was walking across campus at Columbia to go teach a class on

[00:33:26] leadership and seeing a kid walk toward me with that t-shirt that on his t-shirt those three words

[00:33:33] this is 25 years ago and realizing you know what my degree was just the license to learn

[00:33:43] my success hinges on continued learning my ability to lead leadership is all about learning

[00:33:51] and adapting there is no one leadership skill that works unless it's constant evolution of

[00:33:59] your leadership because that's what counts and so all of those learnings that I had

[00:34:06] about the importance of education the importance of lifelong learning the importance

[00:34:11] of technology to enhance our learning and our leadership skills and our ability to be an

[00:34:16] adaptable retailer all of those learnings I tried to condense down into what would I tell

[00:34:23] my 20 year old or 30 year old self to say here's the road map you don't have to you

[00:34:30] don't have to sweat this as much as you did because there's a path here that makes sense

[00:34:36] and it's what to learn how to learn and why to learn those are the things I've tried to

[00:34:41] capture as best I could in the book with the mission of helping others achieve their full

[00:34:47] potential so what are your top tips for your 20 or 30 year old self or even for the next

[00:34:53] generation you know is it a case of good old-fashioned hard work and determination

[00:34:57] or is it a case of finding your passion for me I mean I definitely found my passion in what

[00:35:03] I do and I work doesn't feel like work and I think that's you know that's that's when

[00:35:09] you know you found the right thing so I guess what advice do you have for today's young people

[00:35:14] well it literally is all of the above passion determination persistence I've got an old

[00:35:20] Calvin Coolidge quote about press on persistence and determination are inept but I've really

[00:35:27] broken it down I've written a chapter on each of these elements I call it the C-suite

[00:35:31] learnings and the what to learn is adaptation to change confidence clarity the things I've

[00:35:40] described already if you don't learn those early in your career you you'll never get

[00:35:45] to the next level because they're critically important and they're career killers

[00:35:50] eliminating fear through knowledge it's the a number one necessary thing to learn

[00:35:58] as you're progressing the second the how to learn is something that yes we learn math we

[00:36:05] learn science but no one ever teaches us the importance of critical thinking of create of

[00:36:10] curiosity we're naturally curious as kids but then over the years maybe when mom says shut

[00:36:18] up after we keep asking why why why right our curiosity wanes over time but it's curiosity

[00:36:24] that leads to innovation and then creativity we tend to we tend to outsource creativity oh

[00:36:32] let the marketing folks figure that stuff out well no creativity is everyone's job

[00:36:37] Einstein called creativity intelligence having fun and and it's the essence of innovation how

[00:36:43] can you innovate without invoking the right side of your brain not just the technical side

[00:36:48] so so those are the how to learn things and then the why in my C-suite learnings I

[00:36:55] wasn't going to include the why and I had people remind me Jimmy you've got to tell

[00:37:00] people why this is important why is it important to go to college isn't important today

[00:37:07] why is it important to learn I broke it into again three things to just try to keep it

[00:37:12] simple and straightforward but it's collaboration because we live in a world with people as much as

[00:37:19] we maybe think we can do it all ourselves we really can't and we have to rely on others

[00:37:25] and the power of others makes us stronger and better if we leverage that power how do you

[00:37:31] leverage that power you've got to surround yourself with people that don't think and look

[00:37:36] and act just like you or you'll never appeal to the broader community so I call it cultural

[00:37:41] literacy staying away from the word diversity on purpose because it's become so polarized hard

[00:37:47] to imagine because cultural literacy is a beautiful thing the more I find people that are different

[00:37:53] I will take away something from each of those people and make it part of me

[00:37:58] and make me stronger and better because I'm going to learn from everyone that I encounter

[00:38:03] and the more different they are the more I can learn from them so that's cultural literacy

[00:38:07] and then it all comes down to the last C that I put in the book which is character it's that

[00:38:14] integrity it's humility it's gratitude it's those are the things that become our brand

[00:38:21] and we all know the importance of brand especially retailers do right well that

[00:38:28] character element is what people see and feel when they encounter us in the boardroom in

[00:38:34] the store on the street and our brand is what will make us successful make people choose

[00:38:42] to support us follow us work with us so those are the those are the last three those are the

[00:38:48] wise collaboration cultural literacy and character which come from experience but I've tried to

[00:38:56] capture those experiences that built those three elements in the book so maybe maybe someone

[00:39:03] doesn't have to work for 40 years to build those things hopefully they'll get some tips

[00:39:08] from the book on how to develop their why fantastic I'm really looking forward to

[00:39:14] reading it and I'm a big champion of social mobility so it's just really fantastic to see

[00:39:18] all the work that you're doing with your foundation and then of course with the book

[00:39:21] and uh yeah I'll be buying a copy here in London Jim just to bring it back to retail

[00:39:27] and business transformation do you have any final words for leaders today who are navigating

[00:39:32] all of this disruption the book is intended to be a bit of a call to action for my peers my

[00:39:38] fellow business people because I believe we have a supply problem think about the number one

[00:39:45] resource need of all corporations for some people that they might say well it's chips

[00:39:51] we better build more factories or it might be lithium uh for our batteries or whatever I

[00:39:58] think the number one bar none critical important resource for all corporations is the human

[00:40:04] resource and if we look at the statistics the human resource capability scores on math reading

[00:40:13] science are declining college graduations at least the united states maybe uk declining

[00:40:22] versus other many other countries that will create a supply problem

[00:40:28] we're the demand for an educated workforce we are most of the demand for an educated workforce

[00:40:35] the supply is declining I see it as a crisis 20 30 years down the road and my call to action

[00:40:42] is for my fellow corporate citizens to step up and not see it as a state local government or

[00:40:51] national government need but a business need like any other supply crisis what do we do

[00:40:57] we fix it and I think the technology is at our fingertips to invest in the technology

[00:41:02] to address transformation of education the same way we've transformed retail

[00:41:10] automobiles so many other industries it's right there at our fingertips the future is

[00:41:16] in your hands and that's my call to action for uh fellow business people around the world

[00:41:23] jim it's been so nice to have you on the podcast I've really enjoyed our conversation

[00:41:27] and I look forward to reading your book thank you Natalie I appreciate it great to be with

[00:41:32] you today thank you for listening to retail disrupted if you enjoyed this episode and would

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