We wrapped up our eleventh cohort’s offline induction this past weekend.
Until cohort seven, the induction used to be online. Owing to the restrictions around CoVID-19 and the circumstances during which we started Stoa, online inductions worked.
But after hosting four offline inductions, I am convinced they are better. They set the tone for the journey ahead in a much more impactful way.
In the offline mode, fellows get to interact with each other and get a glimpse of what the next six months will be like. They feel reassured that they aren’t navigating careers alone. This creates a sense of going on a journey with a collective.
And as a team, we get a chance to showcase that we truly are invested in improving a fellow’s professional outcomes. Each session we organize, every document we hand out, every de-brief — they all set the expectations for the kind of learning experience we will be delivering and the kind of involvement we expect from the fellows.
But more than anything, the offline induction helps a fellow build trust in a fundamentally richer way than talking to a whole bunch of people over a Zoom window would.
The fellows directly interact with my team and other cohort fellows, which breaks the ice and makes it easy for them to reach out throughout the six months.
But more importantly, it also allows them to sense our intentionality and sense of purpose as a team. It gives them a chance to gauge if our culture and behavior reflect the same values we expect them to live by during the course of the program.
I feel it adds a level of trust that is hard to quantify or measure but matters significantly. And I also think that this trust is easier to osmote offline vs. online.
In fact, Barnes & Noble (B&N) — a 137-year-old offline bookstore chain — serves as an excellent case study in the power of culture, transmitting cultural values, and building trust over offline interactions.
Initially, with the shift to online book sales via giants like Amazon, businesses like B&N struggled to sell books offline. The struggle became worse because B&N tried to emulate Amazon.
Ted Gioia, in one of his essays, writes —
"For a while, B&N tried to imitate Amazon. It ramped up online sales and introduced its own eBook reader (the Nook), but with little success. Even after its leading bricks-and-mortar competitor Borders shut down in 2011, B&N still couldn’t find a winning strategy. By 2018 the company was in total collapse. Barnes & Noble lost $18 million that year, and fired 1,800 full time employees—in essence shifting almost all store operations to part-time staff."
B&N kept shooting itself in the foot.
It tried to have an in-store cafe, ventured into the restaurant business, and started selling toys, greeting cards, and calendars — products one didn’t necessarily visit the bookstore for.
And it all failed.
In August 2019, on the verge of a collapse, it got bought over by a hedge fund. But what gave B&N a new lease on life was its newly appointed CEO, James Daunt.
Daunt, at 26, successfully operated a bookstore in London. Despite intense market price competition, he simply refused to discount his books.
“I don’t think books are overpriced.”
Later, he replicated the success by reviving Waterstones, another bookstore in the UK. At Waterstones, he refused promotional deals from publishers. He did the same after taking over at B&N.
He explained the reason for rejecting promotional deals in an interview with the Los Angeles Times —
"Every positioning had a dollar price attached to it. The front tables, shelf arrangements, front window displays — “You pay X for this, Y for that. That worked very nicely for publishers because it gave them complete certainty and consistency across the country. The new Michelle Obama, the new John Grisham, the new whatever-it-is is put in this position at this price. And whatever you don’t sell, you send back.
For new books at Barnes & Noble, half to 70% of what came into the store would go back to the publisher. We stopped that immediately."
But beyond making these strategic changes to B&N’s operation, Daunt focused on a crucial but often neglected factor — the culture exhibited by the staff working at the bookstores themselves.
Describing his feat of introducing a new culture, an LA Times piece mentions —
"He encouraged store staff to organize their inventories not only to appeal to local interests, but also to facilitate the one quality of bricks-and-mortar stores that online merchants have never been able to replicate — the ease of browsing and discovering new things by walking around."
He gave more power to the store managers and reimagined how books were displayed. He describes the previous arrangement as “crucifyingly boring.”
To him, the chronological organization of books didn’t make sense because it catered only to those who knew which book they were looking for. There was no sense of excitement for someone who just wished to browse books. As an avid reader himself, he knew what a reader would look for.
Hence, he allowed his store managers and their interest in books to decide how books were organized and displayed in the store.
Consequently, the staff now took pride in recommending their favorite books to avid readers and talking about them like a friend who shared similar reading tastes would.
Just with this simple cultural shift, B&N went from being a passive bookstore to a place teeming with enthusiasm and sheer love of books.
He created an atmosphere that reduced that dry transactional feeling of merely buying something and managed to re-establish trust and camaraderie with visitors, who otherwise would've simply resorted to buying books online.
B&N's success under Daunt is substantiated by its latest announcement to open 30 new stores by the end of December 2023.
This turnaround story re-enforces two things for me:
- A culture built by people who love the product they are building is a moat in itself.
- Creating an atmosphere where customers don’t constantly feel like they’re being sold to is refreshing because everywhere else, they’re being bombarded with some product, offer, wishlist, or add-to-cart nudge.
From being on the verge of a collapse to re-establishing the unique value proposition and strengths of brick-and-mortar retail, the B&N case reflects how powerful cultural shifts can be; specifically, how powerful it can be to entrust people who deeply understand the product and the community to take the reigns and lead daily operations.
So, yeah. Why encourage window shopping, you ask?
Because people window shopping in your stores may not earn you revenue, but do you, as a consumer, remember how cold you felt visiting a store where the staff looked down on window shoppers and constantly stalked you to check if you were gonna buy something?
Would you want to create the same hostile atmosphere for your potential customers?
Yeah, I don't think so either.
And on the flip side, do you remember when a staff member at a retail store deeply empathized with your tastes and needs and helped you make the right choice?
How did it make you feel?