Wanted: Leaders with New Perspectives
A new poll of 135 chief executives and presidents of retail
chains finds that 74 percent expect to look outside the industry for new leaders
over the next five years.
The survey conducted by Herbert Mines Associates
and Women’s Wear Daily found
that among those who plan to look outside the industry, 69 percent are looking
for "leaders with a new perspective." Fifty-two percent seek individuals "better
prepared for new ways business is conducted."
While not looking for a job
in retail (as far as we know), Arkadi Kuhlmann, chairman and president of ING
Direct USA, might be the type of leader that chains would be wise to recruit.
Mr.
Kuhlmann recently spoke with Adam Bryant of The New York Times.
Among his observations:
- "Leadership is about service, and you can’t lead if you can’t
follow."
- "I’m asking the employees again, would you vote for me to serve
with you another year… I’m willing to be accountable to them, not
because I work for them in a broader sense, but I’ve got to walk the
talk, right? So if I keep walking around saying all the time that our associates
are so important, then why don’t they have a say in terms of whether
or not I’m leading?"
- "You can’t be a rebel if you don’t have something to prove.
You can’t be an outlier unless you want to actually turn the tables
upside down."
- "The other thing I’ve learned is that a lot of times, things
work a lot better when I’m not there."
Discussion Questions: How do you think the current leadership in the retail
industry compares to other fields? What leadership attributes or expertise
would you like to see brought from outside retailing?
Seriously? We’re going to do THAT again? Bring in executives from other industries and spend years explaining to them why “retail’s different”?
Retail is changing without outside help. The customer is driving enormous change. Bringing in someone without experience in B-to-C industries is always a bad idea. The thinning of the herd and changing of the guard is bringing change at the top as well.
I have 2 words that summarize the risk: Bob Nardelli.
This is not meant to be a broad brush statement because there are indeed some excellent executives with good leadership skills in “retail,” however it’s disappointing that many retail executives lack imagination, creative problem solving capabilities, and the will to do anything truly different than their competitors.
SKU rationalization has made almost all retail chains identical in terms of product and SKU assortment and pricing which means that ultimately profits are compromised because all that is left for differentiation is the given price of any given item on any given day.
I find that many retail executives take the posture of trying “not to lose” rather than to be assertive and aggressive enough to play to win.
If executives are brought in from other industries, it might work out but it often takes a long time before outsiders understand enough about retail to be effective. On the other hand, maybe that’s a good thing!
I thought we already did that!
I was really surprised and disappointed to read this, especially in light of the fact that the retailers who are doing the best in the current environment are those that have grown up in retail. The brands run by Wexner, Lauren, and Drexler to name a few have weathered the great recession well and are poised to win big in the recovery because they know the business inside and out. These iconic retailers are not only experienced, they understand that their customers make their payrolls and they work hard to include them in the conversation which ultimately leads to their success.
Haven’t we had enough of the financial wizards running retail? What we need to do is propagate and promote the talented individuals who are not driven by Wall Street but by their love and passion for all things retail.
The old cliche “retail is detail” looms large in this consideration. Leaders who can do incredibly innovative things to create enterprise value in companies that run on software are not going to be well suited to a business that is “people powered” as most retail companies are. Certainly this is changing as we merge clicks with bricks — but there are still an awful lot of bricks out there.
Bringing in leaders from businesses that are similarly people driven (DSD companies or sales agencies for example) will have a better chance at success than the kid who founded the last Facebook.
This is a great trend if indeed it is one. A good 80% of what a business needs to know can be found only outside of that business. If the solutions we seek lie within our current mindset, wouldn’t we have solved our problems by now?
But look at what we seem to be saying and you’ll see the problem. We moan about how long it takes to get those ‘outsiders’ immersed into what ‘retail’ is all about. The whole idea is they NOT be immersed into old retail thinking! For goodness sakes what would be the point of bringing in people with new perspectives and then immediately beginning to program them out of those perspectives? The Buckminster Fuller insight that “you do not struggle to try and change the problematic model. You create a new model and make the old one obsolete” fits very well here.
And come on, let’s drop the old line about retail being “different.” I’ve worked in pretty well every industry you can name for 35 years and every one of them claims to be “different.” Sure the language and the acronyms change but fundamentally there’s not much different at all. Maybe retail needs to get over itself.
There are several issues here. The first is leadership overall. Unfortunately, the American philosophy of corporate leadership is sorely lacking. It is not oriented to change, but to the status quo. It is not oriented to betting on the future but to maximize the present. It is not oriented to engaging and embracing employees but to build an office of elite privileges.
There are dramatic changes going on in retail that need new eyes. Yesterday I had a very surprising discussion with my MBA class in Management of Operations and Resources. The topic was inventory and I wanted to use brick and mortar versus delivery for supermarkets as a comparative example.
These 29 students are international students. They are aged 25 to 35. They have been in NYC from 3 months to 12 months. I opened the discussion with “You know D’Agostino’s?” (D’Ag’s is the ubiquitous supermarket in Manhattan.) I got blank faces. No one knew D’Ag’s. I asked what they knew. One student knew Gristedes. Two knew Whole Foods. One knew Trader Joe’s. Then I asked, “Who knows Fresh Direct?” Every student knew Fresh Direct.
Lastly, Kuhlman would make a great retail leader. He has done a great job with ING Direct USA and it is all based on knowing the customer and offering a unique experience.
Retail has some outstanding leaders and the industry should be proud. What the retail and consumer goods industry needs to work harder at is building a career path for up an comers and help attract the best talent out of college. Over the last decade, the “best” headed to Wall Street and before that the “best” went to Silicon Valley. Let’s make the next decade about the “best” going to retail and consumer goods.
If you are looking outside your industry for leadership it means you forgot to build a ladder for others to follow you. Great leaders from other industries might be able to organize the books, optimize the work force (cut jobs) and tweak profits short term, but they may not have the passion that leaders that grow up in retail have. Evan Anthony at Kroger is a great example of that quality and there are others. He does not like retail, he loves it. Passion is not taught in school. It comes from doing, living and learning about an industry you work in.
So retail and consumer goods executives, when you are in your next executive meeting and discussing budgets, be sure you add some resources to training and recruitment so we can build stronger and wider ladders to the top in our exciting industry.
I do not think Retail is “different” or needs outside leadership to make it better. Retail needs to listen to their customers, both internal and external, then deliver on their commitment. Much like politics; but with a different bottom line. In politics we get a voice and then watch as that “voice’ does not listen and then we get another “voice” who does not listen, etc, etc. In retail the “voice”, who we do not have a say in the selection of, has to listen or the bottom line suffers as competitors take the business from them. Then the “voice” listens.
With no federal bailouts required to save the retail industry, one might assume its current crop of leaders are at least acceptable. When you objectively study the various industry and political leaders today, how many–if any–would you be rated as a “statesman”? Forbes magazine publishes a list of the richest leaders, not those who lead with integrity and humility.
A true leader is a trusted person who always leads with integrity and clear-sighted courage; someone who finds his/her security in the earned affection of the people they serve and lead. There may be a few in the retail world.
There are some great retail leaders currently in retail…however, judging by the poor state of retail, and the lack of true change, it is clear that retail needs to go through some serious innovation to grow its business. There are still too many old-school dogs in place that hamper innovation, decrease growth, and all but stop their companies from adapting to the electronic age.
Where are the true customer-service, and price-focused retail innovators? What happened to the customer is king innovation that is changing the rest of the world? The old ways of retailing need to adapt or perish, and the old retailers should heed the same call.
Two more words: Edward Lampert.
The question is “Who has the vision to move to the future of retailing?” Whether that person is inside or outside the industry is not most important. The industry is continuing to change dynamically–who can best lead through the “whitewater?”
I agree with much of what’s been said above: retail’s not really the right industry to ‘go outside’ of and find top talent. You’re much better off finding someone who really ‘gets’ it and has spent their life living and breathing it (Mike Weiss). Or, has been/is a great merchant and really understands how to deliver the #1 P: Product (Mickey Drexler).
All you have to do is look to the founders and see how they did it: from the ground up.
I would like nothing better than to think that retailing is different, special or unique, and maybe it is in some respects. But the one thing any retailer needs is management with imagination and management who understands people. Motivating employees, listening to employees, listening to customers, and wanting to serve customers is what is critical. If management can be brought in from the outside that can do these things effectively, then I’m all for it.
I have been able to put my experience to work while working towards a graduate degree in management. I understand that one who is a king innovator holds the keys to success. At 62 I am aware of the importance of dealing with customers and see a change in the road for aspiring individuals to advance. The right mind-set that is able to direct sell through promotion of new and improved products can heighten retail establishments. The reality of increased sales that change buying habits can change traditional ways to “work it out.”