Have you noticed when the economy slows down and business gets bad, CEOs and business owners start to make, what I call, bonehead business moves? 

They think they are doing something that will save the business and make it prosper.  But in reality, it just often digs a bigger, gaping hole.

Here are a two examples. 

On Monday, November 10^th, Circuit City, long rumored to be for sale, announced filing for Chapter 11 bankruptcy protection – one week after releasing news of closing 155 stores out of 700 nationwide and laying off an additional 17% of its workforce.

Let’s briefly review what brought Circuit City to the brink of going-out-of-business.

Last year Circuit City came up with the non-brilliant idea to get rid of all commission sales people. This seemed like a good idea to those at corporate headquarters in Richmond, Va.  Cut the payroll.  Reduce expenses.  Make a profit???

The only problem was the minimum wage people they hired had no motivation to sell their product and didn’t have the knowledge to sell the product or the customer!  So what did the customer do?  They went to Circuit City’s direct competitor, Best Buy, whose employees did have the product knowledge and service standards to help the customer and make the sale.  Or the customer went to Wal-Mart for price reasons.  Circuit City seriously reduced their payroll.  But they also dramatically reduced sales opportunities.

According to Forbes.com, in September, acting Chief Executive James Marcum spoke of improving the “customer experience” through spruced-up stores and better signage.  Another strategic business mistake by Circuit City.  In retail, you must know who your customer is.  Circuit City’s customer buys based on price, product, service and location. 

Walgreens is another perfect example of a business move that potentially may have results counter to its objectives.  In the state of Florida, Walgreens is in the testing phase of having maintenance prescriptions (prescription orders that are filled by customers every month) filled at a central location in Orlando.

Will seniors really want to do this?  And do they get a choice?  The answer to both:  no.

Walgreens probably just helped the competition to develop their marketing plan.  For years Walgreens have marketed themselves as being the “corner store” or as the slogan suggests, “The Pharmacy America Trusts”.  Now Walgreens wants to turn the prescription business into a factory operation.  Whatever happened to the old-fashioned concept of personally knowing your pharmacist?  Of stepping up to the counter and requesting a refill?

According to an article in the Palm Beach Post dated Friday, October 31^st, Walgreens spokeswoman Tiffani Bruce is quoted as saying, “This is all about making things better for our customers and reducing those frustrating wait times.”  Ms. Bruce is further quoted as saying, “The intent of the program is to try to take away some of the busy work pharmacists have to do in the stores.”  Since when is serving the customer considered “busy work” in a service-oriented, people-oriented industry as the pharmacy business is?

Walgreens is asking pharmacists to relocate to Orlando to fill prescriptions at the central location.  This move suddenly makes pharmacists order fillers rather than practicing their profession and sharing knowledge with customers.  Know of anyone who went to college just to be an educated order-filler???

Walgreens is feeling the pressure of the bottom line.  Yes, some health insurance companies are doing similar practices with regular drug orders and yes, Walgreens may save money but what will they lose in additional business?  Gone is the idea of getting to know your pharmacist and building customer relationships.

During these economic times, you the business person, need to make sure you are not making short-sited bonehead business moves.

Let your competition make the bonehead moves.  Not you.