Comment: Capacity for change critical for today's retailers

This article is the final part of a four-part series from Boxwood, tackling the issue of how to impress customers and deliver results – "Execution Excellence" for short.

An organisation's capability – and capacity – to execute change is critical in today's environment. This is where the customer value proposition, leadership style and operating model come together to deliver your end goal in a consistent and compelling manner. Failure to execute change well is where many strategies fail, and with the world around us changing constantly, the ability to execute change has become even more critical to success.

Less is more

The 'less is more' philosophy is clear, simple and easier to execute. It goes hand in hand with an operating model based on 'relentless focus'. There is no ambiguity, no options or trade-offs to choose between and no parallel strand of the business to keep going alongside; just one clear direction. Be discerning about what you want to do and then implement with commitment, purpose and speed. However, it is a rare business that can afford to be so focused.

Place your bets

The 'less is more' approach is less applicable when you are juggling multiple consumer demands. Then, change execution becomes less about choosing the obvious route to change and more about using data and insight to prioritise a more varied and dynamic portfolio of projects to meet your complex customer needs.

It is easier to place your bets if you have fact-based insight which can inform your decisions and extend your competitive advantage. That insight needs to be related to the direction in which you want to go, as well as providing an insight into your internal constraints. In choosing the right trade-offs to decide which initiatives go ahead, the decision should always be made with an accurate understanding of what resources and capabilities are available to execute the strategy. This is harder than ever, not only because of the volume of data to understand and prioritise, but because of the strain on 'headspace' as a result of companies cutting back on resources to survive the recession.

We have worked with many clients, overwhelmed by a stream of initiatives, who are struggling to not only deliver business as usual, but to execute a new strategy effectively. Helping them to prioritise projects on the basis of benefits, time, and resource demands may sound straightforward, but in our experience is rarely an easy discussion. Clarity of the overall goal, the big picture of change required and the engagement of the leadership team is key. Each department has their own set of urgent priorities (hopefully) linked to the company's strategy and some of those will need to give way for the benefit of the organisation as a whole.


For some organisations, e.g. fashion retailers, this prioritisation approach may simply be too slow. As Liz Evans, CEO of Oasis and Warehouse, says: "The pace of change requires agility and flexibility and the ability to respond to a shift in trends that are moving at a rate of knots."

Organisations need to change at the speed that the market dictates. The old static five-year-plan is no longer relevant in an ever changing complex trading environment. A more dynamic, agile approach will enable you to cope with the volume and complexity of change. For some organisations, that may mean adopting a twin track approach to change alongside BAU. For example, creating a longer term infrastructure programme (e.g. implementing a new ERP system) in a traditional way in parallel to a network of innovators that deliver an agile, continuously evolving customer offer.

In a recent Harvard Business Review article, Accelerate, John Kotter offers a new vision of a parallel approach to change: the Dual Operating System. He believes that traditional hierarchies are so focused on stability and efficiency that they smother and cut off new ideas, which may upset the status quo. He proposes instead that organisations should create a network of volunteers, the 'strategy network', drawn from all levels of the organisation, who are asked to contribute their time to imagine and co-create the future. In parallel, the rest of the organisation keeps the business running as usual. Parallel capacity is key to fast and effective change execution. The trading environment for many, though not all, organisations is simply too complex and too changeable to adopt a singular 'less is more' or a prioritised 'place your bets' approach. As Ferry den Hoed, former COO of Etam Group, put it: "We must be agile in our thoughts and plans. It's no longer about three-year plans. It's about three-month or six-month plans."

Change at the speed that the market dictates: don't stick doggedly to a 3-5-year plan. Prioritise initiatives and create parallel change capacity if you really want to change at pace.

To sum up

Companies do not usually fail because of bad strategies. They fail because of an inability to implement good ones. In the last few years, the ability to achieve execution excellence has become even harder due to a number of macro trends ranging from complexity to technology to trust.

One size does not fit all. The greatest strategy is one that can be implemented effectively. Each company needs to understand what's important to them, their people and their customers. As a leader, the CEO now has a much larger range of tools at their disposal to tackle the challenges in the current market. However, so does the competition and customers' expectations are growing exponentially. It is imperative to make a proactive decision on how to build execution capability and capacity into the business. Organisations that do not have the capability to execute their customer offers successfully have a bleak outlook. If a company stands still, it will go backwards. If it goes backwards, it will die.

Paul Martin is managing director of Boxwood Insights at management consulting firm KPMG Boxwood. His series of articles on "Execution Excellence" has been published on Essential Retail

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