Kyle Larsen

When innovation disappears: Five lessons from Circuit City

Circuit City global strategyBy Dan Benton, Dave Davidson, Kyle Larsen, Dan Olver and Jong Chul Park

Innovation is a buzzword thrown into corporate missions as evidence of how a company creates and differentiates; it’s a keystone for any business, a prerequisite for any manager, and a selling point for any investor.  But what is innovation? And why do we desperately seek it? The way we look at it, innovation is the creativity of a few put into action by many, offering quantitative and qualitative advantages over the competition.  However, any single act of corporate innovation is not enough to create sustainable value; legacies are created through continual value creation.

Imagine a company that created an industry, pioneering enormous growth and innovation in a consumer demand market that had never before existed.  Picture the company riding decades of success into the preeminent spot of its industry, rising to 160th in Fortune 500’s most successful companies, peaking at $10 billion in sales.  Now, envision this giant lying in ruins only two years later.  Circuit City is a case study in how not to run a business.

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