|Circuit City (Fortune 500) announced last month that it approved millions in cash incentives to retain its top talent following the departure of several key executives over the past year. Executive vice presidents could claim retention awards of $1 million each and senior vice presidents could get $600,000, provided they stay with the company until 2011, according to a filing with the U.S. Exchange Commission.|
Last March Circuit City fired a bunch of people who earned more than $18 an hour. Then they outsourced their IT infrastructure to IBM to cut costs. Now they’re promising big bucks to top executives that stay. There’s discussion in the blogosphere over whether the days of the big box consumer electronics store are over — and whether the shopper who frequented that kind of store does all their shopping online now.
I think Best Buy just did it better. Best Buy invested a ton of time and money into training every employee — even the Christmas-time temp. They were smart enough to team up with the Geek Squad. Circuit City is failing because they thought about the product, but failed to think about the end user who would use that product.
Best Buy did it right. They invested in education.