Project Description

A few years ago, CNBC published an article1 which depicted a snapshot of the top retail companies in the 1970s versus the top retail companies of 2017. The article painted a very sobering picture—primarily that only a handful of the retailers on the list from the 70s were actually still in business today.

This unfortunate situation was attributed to the leaders of these companies failing to react to the world’s changing dynamics—and more importantly the consumer behavior and the resulting impacts to the retail industry. In parallel with aligning strategy to a changed world, companies must place high priority on implementing solid change management leadership skills.

Tony Rogers, Walmart’s Chief Marketing Officer, acknowledged this challenge, “Those retailers that are afraid of change are the ones that end up lagging behind.”

Their lack of agility and inability to stay relevant in our ever-changing socioeconomic climate led to the down-trend and ultimate demise of these once shining retail stars. Over the course of 2020 and as we enter a post-pandemic world, these weaknesses proved to be even more glaring.

Far Beyond the Technology

In recent years, retailers and consumer brands have come to understand that with the rapid advancement of technology and analytic applications, as well as the constant evolution of ecommerce and social media, they need to stay agile and adaptive. The seemingly easy answer is to prescribe new technology—and many companies will admit their foundational systems are in dire need of replacement. However, the answer to succeeding in an uber-competitive world goes much further than simply installing a new system. Along with redesigning business processes to take advantage of new technologies, companies must embrace a change management leadership mindset.

Particularly for established companies who have been around for several decades, we often see long-tenured executives and associates who hold deep knowledge of the traditional retail environment, as well as intimate familiarity with the inner workings of their company. While this level of aptitude can be invaluable in many aspects of running the business and crafting strategies, it can also prohibit the organization from being nimble and adaptive to true change.  The mindset we often encounter is “that’s the way we do things,” and many organizations believe their ‘secret sauce’ must not ever be touched or evolve.  It is this mentality that must change to embrace perpetual innovation in order to achieve true transformation.

For a company to continue to grow, adapt, and stay relevant over the long term, it is critical to build an effective and sustainable change environment.

While there may not have been as many resources related to change management 30 or 40 years ago, it has become a common phrase today, particularly in larger American organizations. Parker Avery regularly works with companies in providing change management leadership programs to support new system implementations and the associated process and organizational changes. This commitment to incorporating comprehensive change management to support well-defined business transformations is vital to a successful system implementation. However, for a company to continue to grow, adapt, and stay relevant over the long-term, it is critical to also build an effective and sustainable change environment. This may sound redundant or, to some, synonymous but these are very different things.

Transformation Starts with Change Management Leadership

Change management during major process redesigns, organizational realignments, or system implementations is a very prescriptive approach to supporting organizations through major transformations while trying to mitigate the impacts. Traditional change management consists of an expansive toolbox that covers impact assessments, communication plans, associate training programs, and other governance and mitigation protocols to ensure that projects stay controlled and manageable.

Change management leadership is about creating a positive climate for change by engaging the entire organization in a way that enables embracing a mindset of sustainable and ongoing innovation.

There is usually an established group of stakeholders and a leadership committee to make decisions and give direction throughout the project or to help course-correct if things go unexpectedly.  Several task force teams may even be created to work through particularly difficult problems.  These tools are common tactical components of a good change management program that should not be under-appreciated. However, long-term change leadership is a bit less contained and more difficult to master.

Change management leadership is about creating a positive climate for change by engaging the entire organization in a way that enables embracing a mindset of sustainable and ongoing innovation. This is much more open-ended and facilitates the generation of new ideas that will propel the company forward and continuously challenge the organization to think broadly about what can and needs to be done.

Applying Kotter’s Change Model

Many business management schools teach some form of Kotter’s2 8-step model for implementing change leadership successfully. Let’s explore how this proven approach can be a vital component in today’s dynamic environment of shifting business models and heightened consumer expectations.

Step 1

Create a Sense of Urgency

A strong change leader must first create a sense of urgency around the need for change. Company leadership teams must engage in meaningful conversations about real risks or business opportunities on the horizon. Facilitation of open and honest dialogue that empowers a company’s leaders to bring forth ideas and observations about the market or industry may lead to strategies to stay competitive or morph into true innovation.

Kotter suggests that it takes around 75% of a company’s management to buy in to a change and develop a sense of urgency, so companies should be prepared to spend some quality time and effort on this step. This doesn’t simply come from sharing the latest sales reports, but requires looking at the future of the industry and where innovation and technology are leading and then understanding the consequences of inaction.

Step 2

Form a Powerful Coalition

To aid in creating this sense of urgency, companies need to create a guiding coalition of leaders to convince and drive this message. It is important to remember that change leaders can be found at all levels of an organization—a common mistake is to think that these resources should only come from the executive suite or mid-level management. Strong change agents and key influencers can, and should, consist of a balance of titles, experience, functional areas of expertise, and organizational influence.

This team will be the backbone of the project and the first line of support when things don’t go as expected. They will also be invaluable change ambassadors who can help the organization embrace change with more casual methods. These individuals should be supported through team-building activities, resources, and recognition to keep them motivated and energized. This team will be making a significant emotional commitment, so leaders must be on the lookout for early burnout, and not be afraid to trade out team members if areas of weakness are identified or the need to rebalance is discovered.

Step 3

Create a Vision for Change

One of the first activities to complete with a new change team is to define and document a vision for change. This vision statement must be concise but should embody expectations of how the company expects to drive future growth and change in the organization. A vision statement should also provide guidance and clarity as well as help inform direction and set priorities.

As the team evaluates each change strategy, this vision statement should stand as a barometer to help prioritize and evaluate the potential of ideas to deliver on that vision. Therefore, if a company’s vision is to grow by improving customers’ cross-channel experience and an idea for improving warehouse efficiency surfaces, measurable components of how this idea might improve customer experience, such as faster delivery times for online orders should be included. If this connection can’t be made, then the idea may need to be reworked or prioritized differently.

Establishing a Vision for Change

One of the largest issues facing retailers today is the growing number of touchpoints and engagement options required to stay relevant and-most importantly-competitive. This includes websites, online marketplace, mobile, social media, and of course brick-and-mortar experiences. Each of these channels is fraught with different capabilities, environment constraints, and logistical needs that can either leave a potential customer dazzled or disappointed. A fashion retailer focused on conquering this challenge, revised their vision statement to say,

“We are committed to providing a superior omnichannel experience where she can get the fashion she wants at the price she needs.”

The statement is short, easy to relate to and remember. It can be used to engage all areas of the business, such as ecommerce, supply chain, marketing, store management, visual execution, buying, planning, and so on. It allows everyone to find a way to engage in this vision and measure their priorities against it.

Step 4

Communicate the Vision

This type of evaluation necessitates careful planning and flawless execution of communicating the vision and does not mean simply announcing it at a special gathering or including it in the company newsletter. Effective communication is a consistent struggle for most companies to master and goes far beyond standard announcements at planned company meetings. It is crucial to find ways to engrain this message into daily conversation and keep it top of mind as normal business is conducted.

There are many ways this can be reinforced, such as:

  • Adding the vision statement into meeting presentation templates
  • Including it as a consistent image in internal newsletters or magazines
  • Incorporating it into the landing page of the company intranet site
  • Providing regular updates in normal business meetings

Effective communication involves continuous and repeated actions to ensure that the message sticks in associates’ minds, and they see change leaders ‘walking the walk’ and not just giving direction.

Step 5

Remove Obstacles

The next step is one of the more difficult to manage but also one of the most crucial: removing obstacles. The reason this is challenging is because obstacles to successful change can take many forms, and some of them come with a price tag for resolution.

  • First and foremost is the obstacle of time and focus. The most effective way to ensure the success of a change is to enable teams to focus on their projects without disruption or diffusion. Many times, companies expect project team leaders to run transformative change initiatives in their ‘extra’ time while still trying to complete their normal daily objectives. While this might be possible for someone who is primarily serving as a subject matter expert, it is nearly impossible for resources who have been chosen to lead and drive the detailed work related to major change initiatives. Companies should consider creating new change roles—or shifting existing responsibilities—and staffing according to need. This shows the organization the significance of making sure change projects are successful and have the necessary amount of focus and attention given to any other important business initiative.
  • There is also the need to identify people who are resisting change and either council them or remove them from the critical path of the change. It is best to be clear and upfront with the leadership team so that there are no surprises and expectations of change leadership are met.
  • To support this message, it is also constructive to review performance evaluation systems to ensure that they are in line with the company’s vision. Adding a cascading ‘change objective’ to the review process that can be translated to all levels of the organization is another great way to mitigate resistance and ensure that everyone understands their role in making change endeavors successful.
  • Another way to break down barriers is to create recognition and rewards for individuals or teams who embody change innovation and make meaningful improvements along the way. This tactic has the effect of holding teams accountable but also keeping them motivated by noticing the incremental movements they are making.

Step 6

Create Short-Term Wins

Speaking of incremental movements, creating short-term wins is the best way to give teams a taste of what success can look like and keep their sense of urgency and energy high as a company moves through their roadmap of changes. While building the change roadmap, it is important to identify early where small improvements may be realized that can help reinforce the long-term objectives and future opportunities.

Change can be difficult, and it can take a lot of energy from your entire organization, resulting in burn-out or disillusionment. Even small short-term wins can go a very long way to maintaining forward momentum—these should be low-investment and high-yield where possible and stand to support a longer-term goal; for example, a new process that is rolled out early in order to begin achieving benefits but is planned to be automated later. This step could also consist of a smaller ‘pilot’ group who adopts early to test and demonstrate results prior to the full organization implementation later. Again, change leaders must remember to acknowledge and celebrate these wins as a company or group when and where they occur, as different teams in the organization may experience them at varying times along the roadmap.

Step 7

Build on the Change

However, once a project or a major phase is complete, organizations must be careful not to declare victory too quickly. While it’s a good idea to celebrate accomplishments and quick wins, the next step is to build on the change by creating an atmosphere of constant improvement. To illustrate, simply because a new system has been successfully installed that optimizes outputs, a company should look for ways to improve the inputs as well.

Particularly for a system implementation project, teams should be allowed to utilize the new capabilities initially and then reexamine the process to gauge learnings by carefully identifying any new pain points and opportunities and then building a list of enhancements and refinements. These can materialize in terms of business process, organizational design, and system configuration changes. The organization must embrace the fact that success truly is an ongoing journey and not a destination.

Building on the Change

The Parker Avery Group recently helped implement a state-of-the-art analytics solution to support a client’s size and pack optimization.  With the objectives of reducing store-level stock outs and improving profitability, the effort extended from purchasing through allocation to the stores.

While the project was a great success and added a new major capability, it also added new steps into the end-to-end process that were not present before the implementation. These steps extended the time it took to write purchase orders as well as review and execute allocations.  While the new solution was delivering improved precision as promised, the ‘throughput’ of orders was slowing down.

After go-live, Parker Avery and the client conducted time studies and reviewed the newly enhanced processes to look for areas where simplification and/or automation could be introduced. After a few months of working closely with the client’s business partners and IT, the team was able to not only recoup the extra time, but actually reduce it below the timings prior to the analytics system implementation.

Step 8

Institutionalize the Change

Lastly companies must institutionalize the change—or ‘make it stick.’ One of the most common points of feedback we receive when conducting change readiness surveys is that previous changes have eventually fizzled out or that the organizational leaders no longer gather feedback or assess the progress to ensure that it is still in place and working. When this happens, people tend to lose confidence when the next change idea is presented, as they believe it will mean a lot of work and effort that may not have a long-lasting impact on the company.

We recommend several tactics to help institutionalize change and drive the organization towards a constant and innovative change environment:

  • Continuously communicate progress made and create self-sustaining ways to perpetuate this progress into the corporate culture.
  • Incorporate traits and skills that support continuous change management leadership into hiring and recruiting efforts to ensure the organization is routinely enriched with the right talent.
  • Build checks and balances into any new processes to ensure that there is no ‘back-sliding.’
  • Create a succession plan to replace change leaders as they move on to other roles, and ensure the plan includes effective knowledge transfer and onboarding protocols.

Employing these methods will help ensure the right change environment is in place to keep progressing and improving without losing key learnings from previous projects.

2 John Kotter, Konosuke Matsushita Professor of Leadership, Emeritus, at the Harvard Business School and author of “Leading Change” and other publications focused on leadership and change.

Final Word

Perpetual dynamics in the global landscape are shifting the retail and consumer goods industries faster every day. Simply utilizing the change management ‘tool box’ is not enough, as it typically only comes into play after a change has been accepted and is in the process of implementation. The real trick is to foster true change management leadership starting at the very top to create an ongoing environment where change is not only accepted, but expected.

Without a doubt, true, sustainable change leadership is difficult and takes a lot of energy, determination, and commitment—from all levels in the organization. It also takes creative and innovative leadership to identify opportunities, craft strategic initiatives, make tough decisions, move past old behaviors, and ultimately have the courage to take the leap and support a continuous improvement model that will bring meaningful and sustainable change to the organization.

About Parker Avery

The Parker Avery Group is a leading retail and consumer goods consulting firm that specializes in transforming organizations and optimizing operational execution through the development of competitive strategies, business process design, deep analytics expertise, change management leadership, and implementation of solutions that enable key capabilities.

For more details, contact:

Clay Parnell
President & Managing Partner

Marty Anderson


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