By Elizabeth Elliott, managing partner, Columbus Consulting
We know that retail is going to transform into a different world than the one we knew before COVID-19. As retailers, we’ve all had conversations on how the industry’s landscape is constantly changing. Product needs to be new and innovative, technology needs to keep up with customer experience expectations, four walls and a great assortment doesn’t matter unless it’s part of an overall Omni channel and social media journey, and so on. Now, the ever changing landscape that we’ve known just over the last few years seems stable versus what we’re in the middle of, and what the post COVID-19 world will look like.
Everyone is working on staying in business and managing store closures, cash flow, furloughs, shelter in place, consumer fears and fast changing behaviors. We are managing inventory and promotions, digital marketing, social media and trying to maintain a relationship with our customer with more urgency than ever before. All of this is mission critical and needs to be done. It’s obvious that some will do this well and others should have made different decisions. Some are benefiting, not by being ambulance chasers, but by quickly understanding the current state of consumer sentiment and making fast decisions. Balancing the sadness of loss of family and friends and social distancing with strategic business decisions, and being good stewards of communities is more difficult than it appears.
What all of this means in two words is Continuous Transformation.
Many people operate with the notion that transformation is the soft stuff and only occurs, or is required, during strategic implementations. Transformation is rarely part of a Retailer’s core operating model. The reality is transformation is hard when a company believes it’s only needed once in a while. When transformation is part of the collective mindset of an organization, barriers are broken down, innovative thinking operates in high gear, teams are strong and high maintenance personalities struggle to fit in.
There are seven major edicts of transformation that every organization can benefit from. The wizardry happens when they are done consistently and in unison throughout time and levels of an organization, no one should consider themselves exempt. The seven edicts are not stand-alone items, they overlap and work together.
1. Transformation is Never Finished and Is Always Happening, With or Without You
This does not mean we need to operate in a state of constant flux and confusion. It means being open minded to assumptions that we may need to unwind and rethink. It means operating in a state of awareness. Every organization has transformation happening on a regular basis. Retailers have a daily transformation opportunity now. Current and prospective customers are putting their life stories online every day. Get to know them, understand their journeys. Incorporate the relationship holistically throughout product lifecycles and supporting functions.
2. Don’t Be Hesitant to Change a Decision
Things change fast, it’s not just about being agile. Agility is important and has become part of our retail vocabulary. Changing a decision is different than agility. Changing a decision says the first decision wasn’t the right one. No one ever wants to admit a wrong decision was made, we need to get over that, it happens. A change in decision also says, we’ve learned more and need to change course. Communication is key. Not done well and negativity ripples throughout an organization. Associates will say “They just told me I need to do xyz and now it’s abc”, or “Leadership can’t make up their mind”, etc. Communicating a change timely and clearly will get everyone on board. People are smart, treat them that way (everyone can call BS). Explain the reason for a change, people will remain committed when they are respected enough to be brought into the loop.
3. Fill the Rumor Mill With Truth – Communicate Often, Clearly and be Inclusive
This sounds so easy, but typically leadership tries to figure everything out first and then communicate. Don’t underestimate an organization’s ability to think, absorb and understand. People don’t like being in a ‘don’t need to know’ category. Yes, there are always things that need to be confidential, but too often leadership and management intertwine confidential and control, and there’s a big difference. Over control, which looks a lot like insecurity, creates bad morale and deflates motivation. Once in a control mode, the rumor mill churns out fake news, and it takes an exponential amount of time and energy to correct, if even possible. Now more than ever, both customers and associates need clear and honest communication. Remember, things are changing on a daily and even an hourly basis. It’s not just about what’s negative or different – communicate the positive, be inclusive and thankful. It’s interesting how we try to keep human emotion at bay in a business organization, while marketing brands and products to those same human emotions.
4. Create Cross-Functional Process Fluency
Cross-functional fluency may not sound like a transformation edict, but transformation will hit bottle neck after bottle neck without it. Cross-functional fluency goes beyond understanding the critical integration points and upstream and downstream dependencies. This is about speaking each other’s language and operating with the intention that the whole is bigger than the sum of its parts. When cross-functional fluency exists, functional owners inherently feel more accountability to their process partners. It’s important to understand that transformation is not always a big grand effort. Business processes operate with greater precision and are equipped to make continuous improvements when transformation is part of the cross-functional fabric. As Retailers automate more around demand and the supply chain and optimize artificial intelligence for customer insights, cross-functional fluency will become crucial to ensure department silos are not an output of smarter technology.
5. Take the Organization Along the Transformation Journey
We talk often about the customer journey, the same holds true with employees at every level of the organization. Unless it’s a reality show, most of us don’t like a big reveal ending. Let your teams know strategic intents, what’s known, what’s not known, timeframes and personal impact, etc. It’s ok to say “We don’t have the answer to that yet, but will let you know when we do”. A fundamental component of the journey is involvement. People naturally want to contribute, add value and be a part of the solution. As much as possible, let them. That said, not everyone can be part of everything, that’s why the third edict is paramount.
6. Relationships Matter, a LOT
Everyone instinctively knows this, but it’s not always thought about during change and transformation. We tend to think more about reactions and how to deal with them. Building trusting relationships at all levels of an organization gets things done more effectively, and reduces second guessing. Clearly not all personalities fit well together. However, simply building respectful and caring relationships in an organization will lessen resistance to change and transformation. This is especially important when we think about Retailer’s left brain and right brain thinkers, for example, merchants and planners, product development and finance, creative and operations. There is a natural and healthy tension between groups. Without a respectful and caring relationship, there would be no bending along the transformation journey. Right now, customers and employees are equally scared and nervous. Once we get through the COVID-19 pandemic, they will remember and share their stories on who held up and who broke relationship during the hardest times. Relationships always matter and have a lasting impact.
7. Transformation Requires Leadership
Leaders need to incorporate and embrace edicts one through six into their leadership styles. Leaders must adopt a transformation and change mindset when it comes to managing and working with their organization. Leaders should be asking themselves and their organization, “Is there a better way to do this”, “How do we keep improving”. This approach to leadership will empower organizations to be creative and innovative with product and process improvements, collaboration, and the ability to put customer first in decision making. Transformation leaders have a clear understanding that this is needed for both the customer and retailer journey to be successful.
Does this all sound like nirvana? Of course it does. If Retailers were perfect and we could dictate how the world changes, then transformation wouldn’t be needed. Rather, the goal is to continuously strive for improvement through transformation. A Hop-on Hop-off bus of transformation will yield inconsistent and unsustainable results. Embracing all seven edicts of transformation, and making it part of an organization’s DNA, will create a game-changing advantage along a Retailer’s journey.