Best Buy

The electronics retailer that survived where Circuit City died - then learned that distributing power isn't the same as distributing accountability.

Best Buy and Circuit City faced identical conditions in 2008: electronics sales down 30-40%, frozen credit markets, existential pressure. The difference was storage. Best Buy maintained $1.4 billion in cash reserves - approximately 3-4 months of operating expenses. Circuit City didn't. When the crisis hit, Best Buy's reserves enabled survival and allowed it to acquire Circuit City's market share. The lesson: calibrated storage isn't hoarding - it's the difference between death and opportunity.

But Best Buy nearly killed itself with a management experiment. In 2012, the company tried rotating leadership: team leadership roles rotated monthly to prevent individual power accumulation and develop leadership broadly. The theory was egalitarian. The result was chaos. Projects stalled as incoming leaders reversed predecessors' decisions. Employees gamed the system, delaying difficult decisions until their rotation ended. The accountability vacuum forced termination after 6 months. CEO Hubert Joly replaced it with traditional stable leadership combined with collaborative input - and successfully turned the company around.

The dual lesson: reserves buy survival, but leadership requires continuity. You can distribute information, decision rights, and authority - but you can't distribute accountability without destroying it.