by Fola Abari

In today’s always-on, information democratised digital economy, the barometer as to what constitutes a great proposition seemingly changes daily. The notion that the customer is right has never been stronger, and retailers are racing to build the blend of capabilities that create a level of service which is truly difficult to imitate. It goes without saying that the resultant impact on business processes, organization structure and the enabling technology is immense.

And there are an abundance of white papers, blogs, webinars, seminars that talk to the capabilities required to make the pivot towards becoming a more responsive, agile and cost-effective retailer.

From determining how many stores are needed and where are they best located, to how can we begin to treat the store as a product, to the use of technology in-store and implications for the role of sales associates.

To broader questions such as what is our omni-channel proposition and how do our systems need to change to deliver against this, to how integrated do we need our online and offline propositions to be and what are the implications for our people, the way we structure our teams and the capabilities we need to succeed.

To ever-relevant questions such as what does it mean to be truly mobile-first, how to speed up production without sacrificing quality, to decisions around what’s the best allocation / B2B / pricing strategy – the list goes on.

In response to these questions we have seen rapid growth in the volume of in-house strategy teams working to determine the answer, whilst establishing the right blend of capabilities that will resonate best with a given retailers target market… and at the same time figuring out how to undo the over-dilution of many a brand in periods of rapid growth.

Faced with a plethora of possible answers to these questions, there’s a reasonable likelihood that excessive effort will be focussed on defining the what behind transformation programmes instead of the how. The result? A long shopping list of different change initiatives loosely joined together under the banner of ‘transformation’.

Those who can deliver transformation to specification, budget, on time and with maximum adoption will attest to the value of delivering a holistic programme of change as viewed through the eye of the beholder – i.e. in a way which resonates with the stakeholder groups that are effectively the customers of the transformation (employees, suppliers and customers). If there is clarity on what’s in it for them, the process of change is dramatically simplified.

Most retailers will be clear on the case for employing a customer-centric approach to change and the value of building customer journeys to define, plan and deliver change in a way which continues to evolve in line with customer behavior, but few are set up to truly realise the benefits of this approach. Setting up a cross-functional Transformation Management Office (TMO) to act as the home for an organizations transformation capabilities is a great way of avoiding the typical challenges associated with change.

Define: Eight tips to ensure your TMO will help deliver

• Define with the end in mind. TMOs are charged with thinking about how the transformation will be delivered from the get-go, ensuring an organization has the right resources to both define the ‘to-be’ state but also develop a realistic roadmap for execution.
• Get clear on the vision for the organization. A plethora of choice has left many retailers unclear on their point of differentiation, which complicates decisions on which capabilities to invest in and the resultant initiatives which will drive the realisation of the vision. Question entrenched views on what must not be changed or touched during transformation – often the biggest shifts will be within the prized jewels of a company’s operations
• Broaden your view on your competitive set. Many traditional retailers have been slow to develop inviable capabilities, and so inspiration about the experience that will make the difference to your customers may come from elsewhere. Consider who your customers admire and let that inspire you…
• Abandon dated views on how capabilities are sourced. Not everything needs to be in-house. Start to think about how you can tap into the gig economy and the sharing economy to deliver an improved service faster to your customers, as well as improved bottom line
• Get clear on what you want to be famous for (as determined by your employees, customers, community and shareholders). Build capabilities that will enable that ambition, identify the areas where you can afford to underinvest in over time (think automation and outsourcing) and pump resources behind the differentiators. Clarity on where you are going will help in determining the anticipated business outcomes and how to measure success
• Consider the role which data can play up front. Let that inform your vision of where you want to go and how to plug the data gaps you may have which may hamper your ability to deliver your vision if the status quo remained. Build a roadmap on how to close the gaps and improve your ability to share data cross-functionally, as this ability is critical to the delivery of most emerging capabilities (think fulfill from store, one pool of stock …)
• Build a roadmap from the perspective of your end customers. What will the change feel like for your customers, suppliers and employees? If it doesn’t feel right, or is too hard a sell, then consider whether you’ve planned for everything required to make the shift possible. Identify the quick wins which you will use to advocate the change to the nay-sayers and do not shy away from the big-ticket items. Change is hard and it’s critical that the message lands with all those involved. Instead of abandoning an initiative because of its scale, consider how to phase them into implementable chunks of capability that will make the difference when they are most needed
• Confirm who is accountable. Almost as important as defining What is the change is How it will be governed. Clarifying decision bodies, accountabilities and sign-off structures up front directly influences execution speed

Build & Test: Five tips to get this right

There is little reason why Define, Build & Test and Deliver activity can’t happen at the same time. Indeed, when they do, retailers are able to trial, test and pivot with speed, helping to increase the time to market of new concepts or offerings.

• Don’t see Build as a one-off activity. Constantly experimenting is key to landing something which resonates with customers and drives preference
• Think cross-functionally. A discrete initiative-by-initiative approach to requirements workshops and validation sessions can mean that the benefits of developing capabilities cross-functionally are overlooked. It can become hard to stress test the feasibility of the proposed new way of working without looking at the impact on the cross-functional processes, such as forecasting and planning, that are typically critical to a retailer’s operations. TMOs also help to enforce cross-functional collaboration by leveraging their programme level perspective
• Never design around the kit. Functionality is changing at a remarkable pace nowadays and allowing legacy partner decisions to inform the selection of a particulat solution can result in a poor return on investment
• Invest the time in remapping processes and decision rights. Particularly important for the make or break processes within retailers today (planning, for example) is making sure the cross-functional interfaces do not break because of any changes to people, process and or tech. Make sure the enablers of the transformation are built into the roadmap
• Continually review the impact of the design on employees. It’s key to avoid overburdening them with change initiatives. As much as possible try to ensure that initiatives are delivered holistically, helping to maximise use of their time, as well as introducing changes from a business stand-point as opposed to a technological one

Delivery Excellence

As mentioned previously, fewer, more impactful initiatives will always land better than a shopping list of individually great ideas that don’t knit together to deliver game-changing capabilities. A TMO can play a significant role in helping to determine the priorities and work closely with the project teams to determine their fit within the broader framework.

The ability to execute something well within an organization is truly dependent on the employees involved in the delivery and working to ensure that their varying self-interests are aligned with those of the programmes.

The Harvard Business Review identified decision rights, information, motivators, and structure as being key agents towards influencing individuals actions and the TMO holds a unique unbiased position within the organization to help executive teams take these decisions.

Such steps help to prevent the unravelling of the changes brought about through transformation, helping to make the change part of the new fabric of the organization. For example, collapsing layers and broadening spans of control can help improve decision-making speed, whilst clarifying decision rights will reduce the number of agents involved before action is taken, helping to speed up execution as well as clarify roles and responsibilities. Equally, building KPIs associated with the transformation into objectives helps to inspire individuals to feel accountable for the successful delivery of change.

Without a dedicated team working to cross-functionally to identify the must-have capabilities for strategy realisation, as well as delivering the methodology, tools and governance to manage change, it’s difficult to internally build the prized continuous evolution ability. The best examples of such teams are empowered to define and deliver cross-functional programmes of change that impact the organization beyond systems and processes, to the culture, behaviors and P&L structures, through to shaking the very core of the business model.

Further Reading

Havard Business Review – The Secrets to Successful Strategy Execution