RIDING
WAVES OF CHANGE

Topics: Change; Decisions; Leadership; Planning; Risk; Vision

Reference: Matthew 25:15

Sewell Avery, former chairman of Montgomery Ward & Co., was responsible for Ward’s failure to open a single new store from 1941 to 1957. Instead, the big retailer piled up cash and sat on it. Montgomery Ward amassed $607 million, earning it the Wall Street nickname “the bank with the department storefront.”

Avery did not follow Americans to the suburbs because he was convinced that depression had followed every major war since the time of Napoleon. “Who am I to argue with history?” Avery said. “Why build $14-a-foot buildings when we soon can do it for $3 a foot?”

Meantime, Ward’s rival, Sears, Roebuck & Co., had a different idea. In 1946, Sears began a costly expansion into suburbia. Had another depression occurred, Sears would have been financially devastated. Instead, Sears doubled its revenues while Ward stood still. Sears never looked back, and Ward never caught up. Ward eventually went bankrupt.

How could corporate planning go so wrong? Sewell Avery banked on wisdom from an earlier era, misread the cultural cues of his day, and eventually wiped out his business.

—John McCormick, “You Snooze You Lose,” Newsweek (July 21, 1997)