Proving That Ayn Rand Is to Business What Ebola Is to the Exchange of Bodily Fluids

Sears, which used to have a tall building and a catalogue, is now taking a butcher knife to its own flesh, so that it can sell them to to keep the lights on:

Sears Holdings will sell its well-known Craftsman tools brand to Stanley Black & Decker, the latest in a recent flurry of moves the retailer is making to generate cash after at least five money-losing years.

The agreement announced Thursday calls for Stanley to pay $525 million when the deal closes — expected later this year — and another $250 million after three years, the companies said. New Britain, Conn.-based Stanley will pay Sears a percentage of its new sales of Craftsman products for 15 years, and during that time, Sears will be able to continue selling Craftsman products royalty-free.

What happened over the past 5 years?

This guy:

Hoffman Estates-based Sears estimated the deal's value could top $1 billion.
CEO Lampert remains committed to bankrolling Sears

Sears’ stock jumped as much as 8.7% following a recent statement issued Dec. 29. (Dec. 29, 2016)

Separately Thursday, Sears said it's trying to raise another $1 billion by selling off real estate. On Wednesday, affiliates of the hedge fund managed by Sears' chairman, CEO and biggest investor, Edward Lampert, lent Sears up to $500 million to fund operations while it negotiates those sales.

You see, Eddie is a big fan of Ayn Rand and her poorly written philosophy, Objectivism.

He took over Sears, and promptly implemented the prescriptions put forth by Alisa Zinov'yevna Rosenbaum, which predictably created a complete disaster: (From that Communist rag Inc. magazine)

For those in business who idealize the philosophy of Ayn Rand, maybe it's time to forget books read during the teen years and start thinking about better ways to run a company. Put me in the same camp with Geoffrey James when it comes to saying that Ayn Rand is bad for business. Too bad for the investors in Sears that its CEO, Eddie Lampert, seems to remain a true believer.

Any person who demands the fealty of acolytes while preaching individualism is already off to a bad start with inherent contradictions. Apply the principles of Business-By-Rand and the start goes south pretty quickly.

It might be one thing to invest ruthlessly, but running a company is an entirely different occupation. That's the possible difference between structuring the takeover of Sears by Kmart when you’re the head of a hedge fund and being the CEO. Looking out for No. 1 is a bankrupt strategy when the basics of great business require you to look out for your customers and employees. 

It’s division-eat-division out there.

Lampert has never hidden his affection for Rand and has taken actions to implement its ideas. For example, as Bloomberg reported back in 2013, he broke the company up into dozens of autonomous groups that have to compete for attention and resources. Only the strong will survive.

The problem that quickly develops in such a structure is suboptimization. It's a term that was once used frequently, particularly during the 1990s when companies were trying to reengineer themselves into more efficient and effective organizations. In any system, there are parts that may have to perform in suboptimum ways to get the entire venture to act optimally. If you were engineering a car, for example, you wouldn't optimize the drive train independently of braking and steering. If the car can run away from the ability to control it, you wind up with dead customers and massive lawsuits and regulatory intervention.

But with multiple executives fighting it out to get what they need, you end up running the company backward. Overall strategy takes a back seat to what individual groups can pull off. That was the problem that handicapped Microsoft in the mobile world. Windows and Office were the cash cows, and a future of the company, mobile, was left to wither. Apple and Google took away the significant market share that Microsoft once had.

This is no surprise. After the Rand is someone who wrote that the philosophy of a serial killer who strangled and dismembered a little girl, was an inspiration to her.

There is a certain symmetry here:  Lampert is doing to Sears what William Edward Hickman did to 12 year old Marion Parker.

An important political aside:  One of Rand's biggest fans in the Congress is House Speaker Paul Ryan.

That sadistic bastard makes his staffers read Atlas Shrugged.<sup>*

*</sup>Full disclosure: I have not read Atlas Shrugged.^† I see no reason to plow through a thousand pages of poorly written allegory to understand her philosophy, when I can (and did) read her actual treatise on her philosophy, The Virtue of Selfishness, which is less than 1/5^th the length.^‡
†Honestly, I tried to read it, but it is horrifically piss poor poor writing.
^‡The Virtue of Selfishness is completely awful as well. I read it for a philosophy of literature class, and Immanuel Kant was more readable, and would probably be more readable in the original German.