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The case of Blockbuster offers one of my favorite thought experiments for higher ed. In 2004 Blockbuster boasted 9,000 stores worldwide, 60,000 employees, and a market capitalization of $5 billion. Today, Blockbuster is gone.
We don’t want to be the next Blockbuster.
Did you know that Blockbuster had the opportunity to buy Netflix for $50 million? Netflix today is worth about $35 billion. In the early 2000s Netflix was having real challenges gaining enough scale to achieve economic viability, a financial situation that pushed its co-found Reed Hastings to try to negotiate a sale to Blockbuster.
The fact that Blockbuster said no to the purchase must rank as one of the dumbest business decisions of all time.
The story of Blockbuster and Netflix leads me to a question - a question that I think is relevant to our higher ed world.
What if some employees at Blockbuster had had tenure?
And what if these employees were not those running the place (not the CEO or the CFO etc.), but the most respected employees in the entertainment / media / technology / retail industries who also happened to work at Blockbuster.
These Blockbuster tenured respected industry employees would have had some protections and cover to go against the prevailing Blockbuster organizational structure and conventional wisdom at the time.
Would the tenured Blockbuster employees have spent their organizational capital and job security to argue against the decision of management not to buy Netflix?
Would the tenured Blockbuster employees have entered the marketplace of ideas at the company in order to argue against the prevailing wisdom?
Could tenure have saved Blockbuster?
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