The retail landscape is shifting and the focus is on providing the ultimate customer experience. Technology is forcing this issue, and the Internet is providing a more direct relationship with the customer. If you’ve grown up in retail, you won’t be surprised to see technology is moving much faster than anyone can possibly keep up with; and retailers are cautiously adopting solutions and enhancements at a snails pace relative to what’s available. Even at this slow pace, the relationship with the customer is changing rapidly. Retailers are adjusting the operations and organizational structure to adapt, creating new positions and functions; but not necessarily aligning with the customer’s needs.
The relationship has flipped, and where in the past the retailer controlled the conversation through selection and presentation of products and services; the customer is now in the driver’s seat and controlling the content. Retailers are adding and changing positions and roles to adjust and manage, but most are looking at this the wrong way and creating silos and inefficiencies in operations and execution.
To better understand this new dichotomy and to really evolve and thrive, retailers need to flip their organizational structures up side down. The traditional and overwhelmingly used structure starts from the top, or the executive level, and migrates down into operational units and personnel needed to run the business. The focus is from the top down, where goals and objectives are created and managed, and everything is function of executive or corporate initiatives. But in today’s retail world, the customer has become the executive; driving the demand and experience, so this change in leadership mandates and evaluation and adjustment in how business is structured and run.
Start by flipping your organizational chart upside down and place the customer where the executive exists today. Then progress down through the workflow and experience, examining the impact at each level of operations, but always keeping the focus on the customer’s experience. What you may find is an opportunity to consolidate some functions, eliminate silos, increase efficiencies, improve profitability, and ultimately satisfy the person in charge…the customer.
If you follow the path in this new structure, as seen in the diagram below, you’ll note the following improvements in operational flow:
This new approach places the priority on the customer and each function in a company is now focused on a common goal. It helps to eliminate redundancy in positions and work, while simultaneously breaking down the silos created in a more traditional structure. When each person takes the approach their ultimate boss or person they are held accountable to is the customer, everyone is working to meet a common goal. When the focus is on the executive or management level positions driving department or channel goals, the emphasis shifts to justifying the existence of each channel or department; creating silos and potential conflict with satisfying the real boss, the customer.
So don’t just say the customer is the reason you’re in business, put them at the top of your organizational chart and truly in charge; then work backwards and design a structure that is truly managing to their needs. Not only will the customer be more satisfied, businesses may actually be able to keep up with technology, achieve greater operational efficiencies and improved profitability.
Trying to come up with the title for an article is often the most difficult, as was the case with this one; so hopefully it grabbed your attention enough to read further and understand what I mean. The point I hope to make is how too often in the professional world people become too familiar with their industry and/or their job and develop tunnel vision. Their ability to comprehend what is possible is diminished the longer they stay within their guardrails, providing validity to the saying, "you only know what you know," as they become more seasoned and experienced. It is their lack of diversity preventing them from innovating beyond what they know.
I've been fortunate over the years and experienced diversity in both my professional and personal life. Growing up on the DC Metro Area and an area where there was a mix of ethnicity, race, and wealth; I lived, engaged, and learned the importance of looking beyond what was most familiar to me, often adjusting my views, my values, and my appreciation for what I didn't know or taught within my immediate culture.
Over the course of my professional career, I experience virtually the same; but, it wasn't a deliberate path. I grew up in a generation where my parents preached the necessity of going to college, picking a career, and slogging along an anticipated path pledging loyalty to my career...and often to my employer. But my generation was going through a change where employers were no longer as loyal, and employees were learning diversity as a means of survival. As for me, I had no real clue what I wanted to be when I grew up, so just picked an area of interest and ended up with a degree in Radio, Television and Film. I even landed a job right out of college with a major market radio station...but, after four months found myself hating my work and out of a job.
So what did I do? I thought about how I got to that moment and realized retail was potentially a better career path; as I had begun working in retail at 16, was good at it, and it paid well enough I could be self-sustaining. What I didn't realize at the time, was this profession was about to provide me more diversity in my professional career than perhaps any other.
Early in my chosen career, my friends (most of them with advanced degrees) would kid me saying, "You're still in retail? When are you going to get a real job?". To which I would just laugh and play along since I didn't yet understand where I was heading. But, over the course of the next 30 plus years, I experienced more and I learned more than so many other professions, about the diversity of both business and society. And it was during this journey I also learned how silo's exist within industries, even the most innovated; creating and inability for many to see beyond their own front yard.
Early in my career, my focus was within the physical environment, the stores (there was no internet yet); and I would argue, I learned more about running a business than most people learn through advanced studies in school. Many people don't consider what it takes to run a retail store. It requires a combination of skills across many disciplines, including; business planning and forecasting, basic accounting, sales training and selling, human resource management, customer engagement and service, inventory control, operations and logistical management, security and loss control, and endurance (forgive me fellow retailers if I left out something).
My point? Diversity. I had to learn to work across multiple disciplines and understand the dependencies and relationships in order to be successful within a profession many people view as a pathway to something else.
But my diversity training was just getting started. Following a lateral move into merchandising and buying (which was in the stone age, so we didn't have computers doing much work for us), I began developing advanced skills in analysis, open-to-buy planning, pricing and markdown strategies, allocation and distribution strategies, sourcing and product development, and more. This part of my journey began my exposure beyond my front door and across the globe. I was both traveling domestically and internationally; learning more about people, cultures, and differences in general and business related behaviors. It didn't matter whether I was traveling to the other side of the world or just to the state next door, I was surprised to learn there were so many differences in how people lived, worked, and played; and how important it was to consider this when planning my business goals and objectives. It was less about what was right or wrong, and more about how and why; and the more I opened my mind to ideas of others, the more I grew and expanded my abilities and desire to learn. I began to understand the saying I noted in the beginning of this article and found the more I learned, the less I actually knew...I was learning and applying diversity.
Diversity was always there impacting my path. I learned from other cultures, countries, and regions; and began to challenge a common phrase from more experienced people, "you can't do that..." with the reply, "why not?". I would later expand this thought by telling people who worked for me, "please don't tell me you can't do something; instead, tell me what you can do and then we'll decide whether or not we want to do it." It was my past diversity training which brought me to this thinking, developing an understanding that we are only limited by the walls we either create or are locked within.
Now let me take this a step further and how I see this lack of professional diversity limiting our true innovation across many industries and markets.
Over the course of my career, I transitioned into many roles in both the B2C and B2B worlds, and have performed in almost every possible job/role in the life cycle of a product. I've also done this across industries, often negating the question and/or challenge from people within the industry regarding my industry specific experience. In fact, this is my primary point...that is, people who grow in a single industry or business channel, often don't realize they are missing the diversity they need to innovate and grow.
Here are a three examples to chew over and either agree or disagree with me (always like hearing from those that disagree, as that adds to my diversity):
Ok, I may have beat a dead horse on this topic, but I was struggling with how to spell this concept out in a shorter article and decided to just let it be whatever length it needed to in order to make my point. I hope this makes sense, as what I see in almost every industry is the lack of diversity (especially at the senior or executive level) is most often the reason companies are not innovated and/or don't succeed long term.
And perhaps the motivation to write this article comes from my work in my current industry. I'm working in potentially one of the most exciting channels, with some of the smartest and most innovative minds; and yet, I'm seeing a disconnect in what is possible being applied to what is practical...
Maybe because too many people lack the diversity to truly work beyond what they know.
Over the course of my career, family has always, without any doubt, been my primary focus; and never has a career taken precedence. So it pains me to see anyone claiming they are sacrificing time with their family in order to advance a career. Careers are important, but only in terms of how it relates to your overall goals in life, which include family and they should be a part of any decision.
What’s this got to do with a self-driving business? I’m getting there…
Too often, we hear top level executives preaching how people need to sacrifice and commit; meaning give up precious hours meant for personal time. I often heard executives say, “I probably 80 hours a week or more focused on the job” and “I’m on call 24/7, because that’s what it takes.” In reality, if an executive is spending that much time managing their business, there are only two reasons; the first, they are just not qualified or capable of leading an efficient and effective business. Second, they’re just trying to justify their position, making it sound like they are critical to the company’s survival.
Running a successful business is more about quality than quantity; the latter usually meaning someone is lacking the necessary skills and just trying to keep up. Running a business requires an ability to define and clarify the processes needed for efficient operations; and then, the leadership skills necessary in identifying and hiring the people needed to make it work. A good leader, or executive, not only hires and trains the right people; he/she must empower these people if they want to really create a sustainable and self-driving business. If the people below the executive are not empowered to execute on their responsibilities, and/or the executive feels the need to micro-manage, then either the people doing their jobs are unqualified, or the executive is unable to manage and develop a self sufficient team.
It a perfect world, assuming the executive has done their job in creating a sound foundation and operational structure, and helped select and train the key people in the same manner; then the executive only needs visibility into the daily activities and no additional time in the day to manage. In fact, if they do their job really well, they should feel as though they are just sitting on the sideline watching the game like a coach; occasionally making suggestions and minor adjustments, but allowing the rest of the team do their jobs. There focus needs to be on looking forward, anticipating and planning for the future.
I learned this a long time ago as a means of survival. As a young executive (only in my mid 30's), I was provided an opportunity to take on an emerging retail operation; one with a team in place, a few stores in operation, and plans for aggressive growth. It was my first really large opportunity and I went into it thinking I had to do everything myself. It didn’t take long for me to realize, even if I were capable of doing every job, it wasn’t possible or practical; so, I stepped back and focused more on the operational structure, finding the right people, and then making sure they had clear objectives and the authority to manage. Part of this was stimulated by the people already surrounding me; one in particular, who was fresh out of college and managing our IT and systems needs (back office and POS). He was incredible and helped me understand the power of developing and guiding people over directing and managing. I quickly learned the power of what I call, “expanded intelligence”; meaning, not only are there a lot of smart people out there in the world, if I can aggregate their efforts in an organized fashion, the collective output is potentially incredible…way beyond any one person on their own.
I adapted the same leadership style with each of the operational areas, creating a business operation that was not solely dependent on any one person. I created SOP’s (standard operating procedures), enabling people to focus on what they do, more than how they do it; and created a responsive and adaptable environment. Over the course of three years, this approach allowed us to grow the division of the company from just a few stores, to 37 over 15 states doing in excess of $40 million annually. And it didn’t require people invest excessive amounts of time to achieve our collective goals. I had two small kids during this time, and I firmly believed time with the family was essential to both the individual and their families. And even if people were single, selfish time doing things you want to do is also essential to a creating a balanced work life relationship. So I made sure people took time off, and we had the right people focused on specific roles; so others weren’t duplicating efforts or wasting time on unproductive work. Quality over quantity.
There came a point when I knew it was time to leave, for two reasons; first, the parent company was not going to make it, meaning my division would be dragged down with it. Second, I was literally spending more time merely observing, needing less than 40 hours a week to provide guidance. I knew if I walked away at any point, everything would keep running smoothly; so, submitted my resignation. The parent company was struggling and my immediate boss asked me to stay, stating I was needed to maintain the business. As flattering as that was, I told him, the business was now in self-driving mode; and no one would really know I was gone for at least six months, and that was only because of one area I had not delegated out or created a back up for managing…lease management. So as leases came up for renewal, there was no one else currently trained to manage it, and that is when they would need help. But I also pointed out, there was ample time to prepare.
It was both humbling and satisfying to watch a business run seamlessly, and without interruption after I left. In fact, as the parent company faltered, my division continued to grow and provide positive returns (just not enough to save the overall business). I built a sustainable business structure, not dependent on any one person; rather, providing a platform for many to excel in collaboration based on their efforts. It was a self-driving business. And as an executive, I discovered the more I let others do, and the less I did, the better off the entire business was in the long term.
So when you hear an executive claiming they demand everything from their workers, sacrificing time and family in order to succeed professionally; what they’re really saying is they don’t know what they’re doing, and compensating by making others and themselves, give up time meant for personal growth over professional.
Work smart, build a sound operational structure; and most importantly, empower people within their roles. If you’re really any good at managing or being an executive at any level, you should be very good and observing and guiding, not directing and doing. You don’t aways need to be behind the wheel of the car, especially if it’s self-driving.
Enough already. There’s nothing “artificial” about AI (artificial intelligence), it’s just human intelligence programmed into a machine, designed and created by really intelligent people.
Start calling it…
Think about this for a minute, what’s really happening with AI? The reality? People are accelerating their ability to sift through overwhelming amounts of data across multiple sources, and extract what is most relevant based on their criteria or business objectives. It’s not artificial, it’s happening because some very smart people have developed algorithms and logic into a solution capable of exploring, extracting, analyzing, and presenting data in a more contextual manner. You still need to engage with the machine, input business rules, plans, etc., and…
When implemented properly, AI helps to provide visibility into an overwhelming amount of data faster; but, make no mistake about it, the machine is not controlling anything and not intelligent, it is merely an agent of the person or people creating and using it.
Algorithms and programmable logic do not replace the human brain, they are an extension of it; and machines cannot replace or replicate people when it comes to compassion, empathy, sympathy, love, and subjective reasoning. So stop thinking AI is anything other than a acceleration of analyzing data and enhancing a human’s intelligence and ability to understand, because that’s all it is.
Once you accept the reality, the practical application and use of AI becomes more obvious.
A business can begin to break down operational silos if they merge data into a central point, or data lake; providing AI the opportunity to more quickly parse data across sources, discovering anomalies, correlations, relationships, and dependencies people often miss. What good is a marketing solution that provides recommendations on personalize campaigns if it is not considering the merchandising, inventory, and logistical issues impacting any decision? In the same light, how valuable is a merchandising plan if it is executed without visibility into the marketing metrics around customer preferences and actions?
The real value of AI is the ability to see across data as if you are a single person running the entire business, and not as silo’d organizations marching to their separate P&L goals without any real concern for the overall success of the whole business. This is the real value, but it won’t be realized until companies both consider their organizational structure and impact on data management, along with their systematic structure and solution integrations.
So before everyone gets too excited and thinks a computer is going to either replace your job or make you perform any better; consider it needs to be able to think more like you, meaning, accessing and evaluating all data regardless of the source. At the end of the day, the really successful people, the really successful businesses perform because they look across all available data. The current challenge is this is often too time consuming, requiring analysts to create spreadsheets and reports explaining the content. The opportunity is in letting AI help in this time consuming part, elevating what could take days or weeks to understand, to just seconds or minutes. The end result are people and/or businesses capable of ACCELERATING their intelligence. And that’s not artificial, that’s just smart.
Choice is not necessarily a bad thing, but there comes a point when too much choice causes indecision, no decision, and potentially minimizes the opportunities for a business to grow.
Let me explain. When I was in college, I worked in a ski shop as the head mechanic and part time sales person (I actually loved selling, but enjoyed the mechanical work more). Selecting ski equipment can be overwhelming to many, as it is often difficult for the average person to keep up with technology and the impact on the products relative to their real needs. I recall one day, a young couple entered the shop looking to outfit the woman (her boyfriend already owned skis and was the "expert"). I managed to get her into a pair of boots that were comfortable and suitable for her skill level, and we walked over to the wall of skis to make a selection. "Oh my God!" she said, as she scanned the wall of perhaps 40 plus different skis, "how am I ever going to choose?" Great question given there were probably 4-5 different models she could realistically select, but she wouldn't recognize any difference in performance at her level; so, the question in my mind was, how do I limit the choice and create an opportunity for her make an easy selection. The last thing I wanted to do was spend too much time providing too many choices, where the end result would end up being the same; as I could be helping other customers and increasing the overall revenue for the shop. Time is a commodity we can't afford to waste, so I wanted to help her make a selection she would be happy with and avoid the prolonged, and sometimes painful process of choosing. After reviewing her skill level with her, I walked to the ski wall, removed two different models, placed them on an empty white wall and asked, "which one do you like better?" To which she replied, "Really? It's that easy?", and I explained, "Yes, these are two of the better choices, and it really just boils down to which one do you like better since you won't really experience any difference in performance and you are your ultimate goal is to enjoy the skiing."
I closed the sale in 30 seconds and she left the store with a smile on her face ready to hit the slopes (plus a new ski outfit and a few accessories).
The point of this story is, limitation of choices often is the best avenue for promoting selection and sales in any B2C or B2B environment. Keep in mind you ultimately want the customer to use and enjoy the product and/or service long term, over the process of selecting it. Over thinking and focusing on the minor differences is more a marketer's goal than a buyer's goal; as the marketer wants to establish some differentiation even it is insignificant, so as to promote a reason to buy their item over another. I get that, agree with it to some extent, but more from a competitive point of view over an internal view. And that is where the problem exists regarding too many choices; something exacerbated by the expansion of e-commerce sales.
Consider for a moment, how too many choices internally to a business, actually causes potential issues in both promoting a decision and bottom line performance. Amazon is a great example, as is any e-commerce site that tends to propagate their site with an abundance of products over a carefully curated selection; as what they are doing is both shifting the responsible or effort in parsing options and diluting their presentation. Amazon is an exception to some degree, as they are just so big and dominating in their category, and they don't own much of the product; so their exposure is minimal and they really don't care about the businesses that are ultimately supplying the product. That's a drop ship mentality that has evolved by virtue of e-commerce. So, customers take too much time selecting, and focus more of their attention on the "deal" or price over the actually selection of a brand or relevant product - and that eats away at profitability.
Now put yourself in the shoes of a B2B business professional, and consider you are trying to select a software solution. What I just described above for the consumer is true for the business professional; and many times they get sucked into making a choice based on price as the number one criteria over the substance of the product. Or, they may focus so much on the details of the solution over accomplishing the business tasks in relationship to their entire business; and the process for making the choice may be prolonged and detrimental to their ultimate goal of helping their business perform the tasks required to drive the revenue needed to excel and sustain their business. Take this a step further, and look at companies that may be promoting multiple products with similar characteristics internally, assuming the customer will ultimately tell them which one is the better of the two (or three, or four, etc.). The problem with this is it does the same thing as the large catalog on an e-commerce site; makes the selection confusing and dilutes the value of each of the products (or service).
Don't get me wrong, choice is good...to a degree; but, it's too easy to shift the bourdon for making the choice to the buyer without taking responsibility at the business level to parse the presentation and promote a better, more informed decision. In the end, this just creates a business environment where the dilution of the presentation creates excess and often redundant work, spreads resources thin, and ultimately erodes the bottom line.
Before your customer can make a choice, you need to first make a few yourself.