PETCO Animal Supplies Inc. was becoming a victim of its own momentum.
It was 2004, and Jim Myers had just taken over as the CEO of the nationwide pet supply store chain. The company had achieved tremendous success, experiencing significant growth on sales and earnings in the 1990s and early years of this decade.
PETCO was in the right spot at the right time.
“People were really starting to humanize their pets, and our initial success came from being innovators and creating ideas around that,” he says. “I think we were the first to allow pets into the stores, the first to have adoptions of animals in the stores. Almost all the elements of what is now the pet superstore experience are things we initially tried ourselves.”
But as PETCO vaulted into the retail stratosphere, cementing itself as a giant in the pet supplies industry, a new problem sprouted: The spirit of innovation that had built PETCO had been choked off by a companywide desire to not mess with success.
“What developed in our organization was a fear of making change,” Myers says. “It was working so well, the message down through the organization became ‘Don’t change it, it’s working.’ That stifled innovation.”
While PETCO stayed on its treadmill, competitors closed the gap, expanding their retail arsenal to offer many of the same products and services PETCO offered.
If PETCO was to maintain its standing as a pacesetter in the pet supplies business, Myers knew he needed to rekindle the innovation fire within his employees and get his company back to the cutting-edge thinking that had set it apart from the competition to begin with.
“It was really time to shake up the thought process and bring some more risk-taking back into the organization,” Myers says. “We made it a personal challenge to come up with the next innovations.”
