166 Collins For example, on August 27, 1984, Forbes magazine published an article on Circuit City. It was the first national-level profile ever published on the company. It wasn't that big of an article, just two pages, and it questioned whether Circuit City's recent growth could Still, there it was, the first public acknowledgment that Circuit City had broken through. The journalist had just
identified a hot new company, almost like an overnight success story. This particular overnight success story, however, had been more than a decade in the making. Alan Wurtzel had inherited CEO responsibility from his father in 1973, with the firm close to bankruptcy. First, he rebuilt his executive team and undertook an objective look at the brutal facts of reality, both internal and external. Instill struggling with a crushing debt load, Wurtzel and his team began to experiment with a warehouse showroom style of retailing (large inventories of name brands,
discount pricing, and immediate delivery) and built a prototype of this model in Richmond, Virginia, to sell appliances. In 1976, the company began to experiment with selling consumer electronics in the warehouse showroom format, and in 1977, it transformed the concept into the first-ever Circuit City store. The concept met with success, and the company began systematically converting its stereo stores into Circuit City stores. In with nine years of accumulated turns on the flywheel-Wurtzel and his team committed fully to the concept of the Circuit City superstore.
Over the next five years, as it shifted entirely to this concept, Circuit City generated the highest total return to shareholders of any company on the New York Stock From 1982 to 1999, Circuit City generated cumulative stock returns twenty-two times better than the market, handily beating Intel, Wal-Mart, GE,
Hewlett-Packard, and Coca-Cola. Not surprisingly, Circuit City then found itself a prime subject for media attention. Whereas we found no articles of any significance in the decade leading up the transition, we found ninety-seven articles' worth examining in the decade after the transition, twenty-two of them significant pieces. It's as if the company hadn't even existed prior to that, despite having traded on a major stock exchange since 1968, and despite the remarkable progress made by Wurtzel and his team in the decade leading up to the breakthrough point. The Circuit City experience reflects a common pattern.
In case after case, we found fewer articles in the decade leading up to the point of transition than in the decade after, by an average factor of nearly three