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From May 2008
By Tracy Mullin
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Sponsored by
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At last count, there were about 5,000
books on the market on how to run a
business. Anything you would want to
know is likely in one of these guides,
which offer tips on everything from
starting a company to hiring the right
staff to investing in new technologies.
After hearing Patrick Byrne, the CEO of
Overstock.com, speak at Shop.org’s
Online Marketing Workshop last month, I
have a new appreciation for those who
are willing to set business books aside
on occasion and use their gut instinct
to lead. |
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Many of the decisions Byrne has made as the head
of Overstock.com have hardly been what one would
call conventional. The company’s advertising is
still run by a woman he hired through a
temporary staffing agency years ago. He doesn’t
believe in measuring people on productivity but,
instead, on quality of work product. And Byrne
has made a name for himself on Wall Street for
his no-nonsense approach to investors.
Unlike many executives, Byrne is refreshingly
candid. When asked about the “Google Effect” on
e-commerce, he admitted that Overstock.com had
not leveraged natural search to its fullest
extent in the past, which he called “really
stupid.” Acknowledging that he was hesitant at
first to invest in new technology, Byrne
confessed that he then tried to make
improvements too quickly, which led to shrinking
revenues. And he declared that his keynote
presentation was mostly about how he “screwed up
Overstock.com and customers fixed it.”
Indeed, it hasn’t all been rosy. When company
revenue began to nosedive earlier this decade,
Byrne said the company was suffering because it
had abandoned its commitment to the customer.
After addressing technological and inventory
issues, the company rededicated itself to
service in January 2006 by making a conscious
effort to shift focus away from the product and
toward the customer.
Today, the customer service department is given
the authority to take merchandise off the
website if it receives too many calls that the
product is defective or is not what was
promised. Overstock.com also has a unit
specifically tasked with customer response that
has access to the warehouse so that it can
quickly determine why and how problems are
occurring.
After all, Byrne says, “customer care knows
where the bodies are buried” in every company,
and giving them control can alleviate problems
more quickly than waiting for another department
to act.
The company’s rededication to customers seems to
be working. Earlier this year, Overstock.com was
ranked fourth for customer service, according to
an NRF Foundation/American Express survey. Sales
and profits have begun to climb handsomely, and
shopper satisfaction is at an all-time high.
While Byrne’s approach is a bit avant-garde,
some of what makes a great leader is having the
courage to defy conventional wisdom. If we had
to read thousands of books to take our cues,
we’d never have time to actually do anything. |
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