Waterstones shops should be "significantly more entrepreneurial than they are at the moment", James Daunt has said.
Speaking on a panel at the IPG spring conference about chain bookshops, alongside Blackwell's David Prescott, Daunt said that the "point at which we become more confident in retailing, bookselling, and our shops has begun" but that many people at Waterstones were still "immersed in the culture which is central direction".
"As much as we encourage it, booksellers in Waterstones are not taking risks at the moment," he added.
However, the business is slowly changing, with a number of Waterstones staff choosing to stop wearing a uniform last year and staff retention rates improving.
The Waterstones' estate will continue to change over the coming years, but it is only in London that the company is being priced out of current locations. If Waterstones was able to close around 20 of stores, it would be "healthily profitable".
Asked about Waterstones' digital strategy, Daunt admitted there the chain does not "have a sensible offer" digitally which is "remotely competitive" with the likes of Amazon and Kobo.
Online sales for Waterstones are £10m, while offline sales are £350m.
"Online is a small part of our business that clearly should be much bigger," Daunt said. "We have replatformed the website. Alongside that we have no e-book offer that's acceptable. You can buy e-books from us and some people continue to do so…but I have no sensible answer."
Daunt also revealed that the Waterstones loyalty card database currently has about 4m members, of which 2m are active, and 1m are contactable by Waterstones. The database is old, said Daunt, and needs updating.
Publisher reps are welcome in Waterstones' stores, but shops no longer purchase from them in the same way.
"The most unpopular thing I have done, apart from sacking half our managers, was stopping rep visits in the shops and stopping our booksellers actually buying the majority of the new titles [that way]," said Daunt. Buying from reps meant Waterstones' shops were stocking books they could not sell. The easiest way for publishers to make shops aware of their books is by email, and approaching the central buying team is the best option for publishers."
By contrast, Prescott said publisher reps were important to Blackwell's, with stores more likely to buy books after visits from publisher reps rather than by looking through catalogues themselves.
Prescott ran through recent changes at Blackwell's, and said the long-term future of the business would be in an employee partnership scheme, like that run by John Lewis.
He said the events programme at Blackwell's was "critical to the success of our shops", because it gave customers a reason to return to shops. But the main reasons for the company's turnaround was the closure of businesses that were not profitable, such as its library supply business.
Prescott said that Blackwell's was "in markets you may not think we are", and revealed that in 2014 12% of cash sales in Blackwell's were of fiction, while 9% were of children's titles. The average cash sale discount at Blackwell's in 2014 was 13%.
And he encouraged publishers to get in touch with Blackwell's, saying: "If we don't have your books in stock we don't know you, or we don't like you."