I have tried to write this blog three times in the past year and have always ended up canning it. You know, “not quite the right alignment of purpose and insight”, “too long winded”, “boring marketing analysis” or “death through the turgidity of accounting”. But now it has come together.
While I would like to write specifically, with examples, I realised that the value was in the generic….oh and advice from the lawyers. I still have the original safely tucked away.
In my opinion the real challenge in the sector is around leadership and specifically visionary and story led engagement with the customer and staff. There have been some great visionaries that have driven customer value delivery in this most quintessential of British businesses; we seem to have lost those across the sector. As Napoleon said – “a nation of shopkeepers”, it is remarkable to think that our friends from Deutschland are know teaching us things about retailing. Mind you, it’s also taken every other countries’ leadership to revive our car industry, now predicted to break production records in 2017.
Some time ago now, a great leader of one of our rising stars was leaving the business, and an institutional investor said this – I have paraphrased – “Having taken this business to the very heights of performance on the global stage our outgoing Leader has never shirked the need to reinvent the business and he has done this 2, 3 or maybe 4 times. The result of this repurposing and focus on the ‘why’ of customer value is what has driven our company”.
Currently it appears that the large traditional retail sector has been run for efficiency and not effectiveness. Articles from those better placed and informed than me have lamented the drift from retail experienced seniors in Boards to a further domination of experience from unrelated sectors such as finance, law, investment banking and government to name but a few.
It does seem to me that if the Board with the Exec Team are responsible for defining, deciding, advising, refining and supporting the strategy, then not having (enough) insightful retail people is, well, a bit remiss?
“Pennies Saved Helps the Share Price”, improves our efficiency and profitability seems to be the strapline that a lot of these businesses should use. The obsession with ‘shareholder value’ rather than satisfying customers with services and products they value and will buy again and again, has destroyed much shareholder value, maybe as much as 30, 40 or even 50%. It appears as though there is an obsession with senior Board members telling you about the change in share price multiplied by the shares at issue, as opposed to looking at metrics like repeat and returning customers, capture of their basket spend, referral by customers to others, reduction in returns, freshness after purchase.
The inability of Companies to spot the obvious, that they are run for shareholders in terms of returns and the Board are there to represent the shareholders. The Board achieve this value through the gentle handle on the tiller of vision and purpose. If the shareholders allow their representation to fall into the hands of the less knowledgeable, inexperienced and unperceptive, they can hardly scream ‘foul’ when the strategy goes badly wrong and the staff don’t understand!!
It’s about culture. We are very good at helping customers (FTSE 100 down) to achieve this type of change. But I’m not #holdingmybreathwaitingforthecall.