Blockbuster’s former VP of HR warns HR pros against ignoring the potential impacts of AI

Think back to the ’90s: Spice Girls, Beanie Babies, the Macarena, trips to the local Blockbuster Video to rent a VHS on a Friday night. While some things never had a chance to stand the test of time, Blockbuster might have had a better shot, if its leadership made some different choices, according to one former exec.

The Society of Human Resource Management’s (SHRM) president and CEO, Johnny C. Taylor Jr., told HR Brew he got his start in the world of HR—at the ripe age of 26 years old—after being named the video rental company’s VP of HR.

“Even now that I’m CEO of SHRM, it was my favorite job, because the culture there [was] so clear about who we were, the types of people who work there,” Taylor said. “Everyone wanted to work there, and it was intentionally a fun company.”

The corporate culture was groundbreaking in many regards, he added. Taylor lauded the Florida-based company’s commitment to generational, racial, and political diversity, decades before DE&I initiatives became a corporate mainstay. Blockbuster’s leadership possessed “cultural clarity,” Taylor believes. The focus on hiring the right people for the workplace culture was paramount, he recalled.

But Taylor said that at Blockbuster, the prevailing opinion was that technology was not a threat to the business. Fiercely competitive in the movie rental landscape, execs were laser-focused on selecting the best locations for their brick-and-mortar stores, hiring the right staff, and curating that signature customer experience many still remember today. (If you breathe in right now, I bet you could recall the Blockbuster smell.)

“We convinced ourselves that ‘that technology thing’ is out there, but it won’t replace this very unique experience of ‘making it a Blockbuster night,’” he said. “We so convinced ourselves…that nothing would ever happen, that we did not prepare our people for the future. Hell, we didn’t prepare the business.”

Netflix was founded in 1997 as a mail-order video rental company; its founders once tried to sell the company to Blockbuster in 2000 for a cool $50 million, but were “laughed out of the room,” according to co-founder and former CEO Marc Randolph. The streaming service giant that puts the “N” in FAANG, is now worth more than $250 billion, with a “B.”

Taylor spent last week in Silicon Valley hosting a group of HR leaders and executives as part of SHRM’s new HR+AI Project, aimed at helping HR professionals “change the narrative from [AI is] all bad to it’s good” and prepare HR leaders for the lightning-fast speed the technology is predicted to change the way we work.

HR leaders are poised to be the anchor for this new technology adoption, he said. The function tends to be an early adopter of technology more broadly (think human resources information system, aka HRIS), but also specifically automation and AI (think, the way application tracking system, ATS, tech uses automation).

Taylor told HR Brew that companies need to be thinking about AI as a technology that will rapidly transform the workplace, and HR is aptly positioned to help be a leader within the organization to shepherd in its adoption.

“I’ve heard people say, ‘I'll be retired by the time…I don’t disagree that technology is coming. I just think it’s so far away from me now,’” he said. “All have those excuses for why we don’t have to adopt and embrace sooner rather than later…I see the parallel [with Blockbuster].”

Taylor pointed to buffering as an early pain-point in video streaming. What Blockbuster execs failed to realize was that there were companies, like AT&T and Verizon, he recalled, working to actively address that. In hindsight, he thinks it wasn’t Netflix’s job to fix those pain-points.

Blockbuster failed to “hire into the future” and failed to create the generation of leaders who “should be running Netflix,” he said.

“We hired people who were great retailers and great real-estate pickers, because that’s the big key in…real retail business,” he said. “Perhaps we should have set up a separate division, a lab of sorts… [and] created our own version of [a streaming service]…just to monitor, just to see what’s going on. We were so convinced that this was not a problem in our lifetimes, we just didn’t pay any attention.”

In order to prepare the workforce for the impending AI transformation, Taylor is directing SHRM to influence “CEOs, CHROs, and politicos” on “earlier, not early, adoption” of the tech.

Taylor told HR Brew SHRM is taking a three prong approach to AI. SHRM’s government affairs team is working with state and federal lawmakers to warn against limiting AI. It’s also pressing CEOs and execs to understand the need for upskilling talent and prioritize leadership development right now. They’re going to need at least some portion of their talent to work in this new “Netflix environment,” so it’s imperative to train them now. The organization is also helping CHROs create AI systems to protect the company and its people.

“If HR can adopt it and begin using it, it can then serve as the example for the rest of the organization,” he said. “You touch all of your employees. You touch all of the functions within an organization…So you’re sitting at the table saying, ‘Oh yeah, I’ve done this. We’re faster. We’re better. We’re more accurate. We’re like this, and then you become the test case for the organization.”