It is ironic that Blockbuster would announce the extension of CEO John Antioco’s contract for 5 years on the same day that they reveal a $1.42 billion loss.
Reuters: The company posted a quarterly operating profit well below analysts’ estimates even before $1.5 billion in one-time charges, as it faced falling movie rental demand and higher costs to counter competition. The company’s shares were down 6.35 percent at $6.64 on the New York Stock Exchange.
Antioco has been credited with saving Blockbuster time and again as the company repeatedly fell on hard financial times. And now he’s trying to do it again. The trouble with heroic leadership is you never know when luck will run out and the heroism won’t be enough.
Businesses cannot survive for long depending on heroic leaders and yet the business press constantly celebrates them. At almost any time, you can find a headline asking “Can Joe Blow Save XYZ Company?” The need for heroic leadership points to a deeper problem that gets masked over by the short-term successes won through the efforts of a few individuals. Why did the company need saving in the first place? What has happened to the company’s Success Formula that put it in such dire conditions, and what’s being done about it? These are the questions that should be asked when someone trumpets a heroic turnaround.
What’s the alternative? What companies need to do is develop a culture based on ongoing reinvention—from the top to the bottom. It is only when the organization systemically renews itself before it has to, that it can quit relying on heroic leadership to fly in and save the day. That’s what it means to adopt the Phoenix Principle and make it a foundational element in your company’s success.
