Sears of war: Inside the warring tribes of Sears and Kmart

by Cameron Edmond19 Jul 2013

Sears Holdings (SHLD) business units fight like warring tribes thanks to their Ayn Rand-loving CEO, BusinessWeek reported.

Eddie Lampert, CEO of SHLD, came into power in January, eight years after engineering Kmart’s take-over of the retailer.

The presidents of SHLD’s business units meet annually at the company’s headquarters in Illinois to pitch Lampert for funding. However, Lampert is never there.

Instead, the would-be military strategist video-conferences in, only looking up at pitching presidents if they make a mistake (reportedly followed by a barrage of questions) during their presentations that outline the year’s targets.

This format actually dates back to Kmart’s initial acquisition of Sears, when Lampert began running the company as a collection of autonomous businesses, all vying for funding. Lampert views this model as key to driving a more rational, selfish and therefore productive company.

However, the result is described as more of a “warring tribes” culture, turning the divisions against each other and annihilating any thought of collaboration – each business unit has become like its own company, all competing against each other in the micro-industry SHLD has evolved into.

“Decentralized systems and structures work better than centralized ones because they produce better information over time,” Lampert told BusinessWeek. “The downside is that, to some, it appears messier than centralized systems.”

SHLD’s stock has sunk 64% since the takeover.