Flip Your Structure to Drive Business
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:
- The customer has a single point of contact, regardless of how many channels of distribution (i.e. brick and mortar, catalog, online, etc.)
- The points of connection are now aligned and viewed equally, so the experience should be planned and managed as a single experience with no single channel garnishing unnecessary priority or influence.
- The fulfillment and logistics required to satisfy the customer are now aligned and managing across distribution points from a single perspective; the customer’s satisfaction.
- The product design, development, acquisition, marketing and merchandising is done in a consolidated manner; without consideration of distribution channels, and only focused on a single customer experience.
- The executive management is now focused only on the customer’s experience and managing the steps in the process of meeting their expectations; Merchandising and Marketing, Inventory Control and Distribution, Selling, and Service.
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.
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