When it comes to CEOs, is the ‘digital guy’ the best guy?

Discussion
Dec 15, 2014

No industry has gone untouched by the rapid technological growth of the past decade, but journalism and retailing certainly number among those that have changed the most.

In early December, staff at The New Republic made their feelings known about the tech-minded direction Facebook co-founder and TNR owner Chris Hughes sought to take the publication: they walked out. So great was the enmity in some segments of the journalism world that an op-ed in The Washington Post referred to Mr. Hughes, who bought The New Republic in 2012, as a "dilettante and a fraud."

With Art Peck, Gap’s "digital guy," taking the helm as the retailer’s CEO in October, one wonders if there isn’t something in Mr. Hughes’ story to which he, and retail c-suiters nationwide, should pay attention.

Of Mr. Hughes’ transgressions at The New Republic, the ones that inspired the most ire were his doing exactly what one would expect of such a Silicon Valley-steeped figure — in a word, "disrupting." Mr. Hughes had given his word to keep The New Republic’s long-form journalism tradition in place, but after two years was investing resources into apps and demanding "snackable" content.

Mr. Peck’s decade at Gap leading up to his CEO status show that he’s no dilettante, but he is leaning heavily on digital. Discussing his strategy with Buzzfeed, Mr. Peck stated that, "The numbers are going in a way where, very quickly, the majority of traffic will be digital as opposed to people walking into our stores."

It goes without saying that omni-channel initiatives are important, but it’s also important to recognize that not every retail tech gamble has pointed to the inevitable rise of the robots.

This can be seen at Barnes & Noble, another company with a CEO with digital experience. Michael Huseby, who helmed Nook Media before his promotion, has been falling back on his finance background and working to spin off the imperiled division. Discussing the company’s most recent earnings report, Huseby said, "Retail sales continued to benefit from improving physical book industry trends … while our college bookstores comparable sales improved on favorable textbook sales trends and higher merchandise sales."

This good news seems to offer yet another argument that new technology doesn’t spell the absolute end of all that came before it.

Do you see heavy experience with digital tech as a bonus for retail CEOs in this era? What lessons should tech-savvy retail CEOs take from the struggles of Chris Hughes at The New Republic?

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16 Comments on "When it comes to CEOs, is the ‘digital guy’ the best guy?"


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Chris Petersen, PhD
Guest
7 years 5 months ago

In this current age of disruption, digital tech experience is a definite bonus for CEOs in almost any industry.

The struggles of Chris Hughes at The New Republic would suggest that the most critical skills of a CEO are strategic change, and how to manage it within a corporate culture.

If a current CEO lacks digital tech experience, they would be wise to recruit some of that talent for their board. And better yet make sure that someone on the board is under 40 years old.

Ian Percy
Guest
7 years 5 months ago
The question is a little vague. Are we being asked “Should retail make digital its primary (if not only) sales channel?” or is the question “Do digital technology experts make good CEOs?” Since I prefer the latter question, that’s the one I’ll answer. Expertise in any specific area of an operation (whether that be technology, manufacturing, sales, marketing, etc.) seldom leads to great corporate leadership. Be honest, does the announcement that your company’s CFO has been made CEO make you gasp in excitement? And if the IT guy is made CEO you know you can kiss customer engagement and relations goodbye. The more brilliant they are in their expertise, the more catastrophic the eventual failure. Look, we need to redefine leadership. Today’s leader has ONE job and that’s to align all the energies within the organization and focus them on the organization’s highest possibilities. Defining those possibilities is the first deliverable from that aligned energy. Chris Hughes made many novice mistakes. He didn’t take the time to understand the energies of The New Republic so… Read more »
J. Peter Deeb
Guest
7 years 5 months ago

A CEO needs to be digital tech savvy or have a senior marketing person who is ahead of the curve to guide a retail company into the next 10 years. The speed at which the consumer is moving must be at least matched by a retailer to prosper going forward. A CEO needs to be able to manage change, be open to “disruptions” that contribute to market leadership and most importantly be able to steer a company’s culture (employee attitudes and morale) through the minefield that is progress.

Max Goldberg
Guest
7 years 5 months ago

Retail CEOs need to be comfortable with digital technology. They don’t need to have come from it. Online plays a key role for retailers, but CEOs of these companies can’t take their eye off the physical stores. Omni-channel is the way to go. Customers expect a seamless shopping experience. Macy’s is setting the pace in this regard.

CEOs who push too much technology, or who don’t explore it enough, will find their businesses suffering. It’s hard to strike a balance, and the point of balance is different for every retailer.

Being a successful CEO not only means having vision. It mean communicating that vision in a way that motivates employees.

James Tenser
Guest
7 years 5 months ago

One: Stunning financial success in the world of emerging tech does not automatically qualify an individual to lead other dissimilar businesses. Smart comes in more than one type and multiples seldom appear in the same individual.

Two: Journalists tend to be conservative about their craft and their institutions, even when both may be subject to transformative change. This is especially true when the apparent value of content creation is under threat. No wonder the New Republic writers are ticked off. It’s their livelihood at stake (and some serious principles too).

Three: Retail is certainly undergoing its own radical transformation due to digital technology. That doesn’t necessarily mean a tech wizard can step in as savior of a business with poor fundamentals or collapsing relevance. This is known as the “Ron Johnson couldn’t fix J.C. Penney principle.

Four: If both retail and journalism are experiencing profound and rapid change due to the influence of digital technology, that spells immense impact upon those of us who are retail industry journalists. It can’t possibly get much more fun than this.

Todd Sherman
Guest
Todd Sherman
7 years 5 months ago

Yes, digital savvy will be critical. Although it’s not just experience with technology but—more importantly—a keen understanding of shoppers’ increasing use of digital channels/technologies on their paths to purchase. To be clear, this is not just online/e-commerce but also includes in-store, social, shopping lists, etc. (Where doesn’t the smartphone change our behaviors?)

But the “make or break” skillset will be as an effective change agent. All retailers will need to reinvent themselves to meet the new and fast-evolving shopper expectations (read: demands). Being able to lead and transform their companies in every way will be the linchpin.

Cathy Hotka
Guest
7 years 5 months ago

I’m reminded of the fact that, on two separate occasions, Borders decided to eliminate the position of CIO. How ironic that their undoing was a technology product from another company.

Digital experience may not be a prerequisite for the CEO job, but awareness and acceptance are.

Doug Garnett
Guest
Doug Garnett
7 years 5 months ago

While the PR and hype right now is all about tech, tech remains a tiny part of the business of any retailer and there’s no indication of it becoming more than 10 percent unless the retailer gives up huge sales in brick-and-mortar (i.e., collapses).

Comfort with digital? Absolutely necessary. A full digital strategy to convert? Absolutely the way to disaster.

This question should be treated like the question, “should a retail CEO be from the merchandizing side of the house?” or “should a retail CEO be from the accounting side of the house?”

Of course they should or can. But in becoming CEO they need to rise above the one dimension of their more recent experience.

Gordon Arnold
Guest
7 years 5 months ago
As a community, retailers of all types are struggling with 21st century sales and marketing methods and means. It is no secret that there are glaring digital deficiencies among our present-day top executives. What is not discussed is the lack of awareness of what has changed in traditional retail platforms, how to get the most from them now and what to expect in return for the investments. A digital guru will perform just as poorly as a brick-and-mortar guru in head-to-head competition against their peers and parallels. The persons best equipped for today’s retail market is the designer, implementer and leader of an omni-channel market plan. Today’s CEO must understand this and have enough knowledge to take input from the company’s experts to sell the board and the public. In a transitional company of any size compiling and using a group of third-party specialty consulting firms is a highly recommended priority for a means to get started with minimum financial outlay and assured maximum return. What we see as the largest stumbling block in the… Read more »
Bill Davis
Guest
7 years 5 months ago
In general, a retail CEO absolutely should have more of a technological background than in the past. That’s not saying some won’t succeed without it and those with it won’t have setbacks, but technology is becoming much more important in retail so having someone with that experience would seem to be of greater benefit in the CEO role. As long as Amazon and Alibaba et. al continue their rise, this will continue to grow in importance. Barnes & Noble is an interesting example as its Chairman, Leonard Riggio, doesn’t have a tech orientation or has had a change of heart since William Lynch resigned last summer. While B&N shouldn’t have been building its own hardware, not its core competency, they do need to be involved in the e-books space. Its recent buy-back of its Nook shares from Microsoft, at a significant discount shows this wasn’t a good investment for anyone. The company is in a tough position due to Amazon as Borders has already closed its doors and B&N hasn’t had an easy time over… Read more »
Naomi K. Shapiro
Guest
Naomi K. Shapiro
7 years 5 months ago

Ian Percy knocked it out of the park with his statements, “… we need to redefine leadership … Today’s leader has ONE job and that’s to align all the energies within the organization and focus them on the organization’s highest possibilities.”

I have one quibble: Ian said, “Failure inevitably points to the lack of energy alignment and/or declaring ambiguous and far-too-low goals.” I believe in the case of digital tech CEOs it sounds like we may be seeing far-too-high (or unrealistic) goals.

James Tenser also knocked it out of the park, but I have one quibble: James said, “[The challenges] can’t possibly get much more fun than this.” Perhaps James was being facetious. I’m up for the challenges and excitement, but I don’t think of it as fun.

Gene Detroyer
Guest
7 years 5 months ago

Heavy experience with digital tech is absolutely a bonus for retail CEOs. CEOs are all about the future direction of the company and at retail, it is digital. As Jack Welch said in 2000, referencing the kind of CEO GE should have, “The Jack Welch of the future cannot be like me. I spent my entire career in the United States. The next head of General Electric will be somebody who spent time in Bombay, in Hong Kong, in Buenos Aires. We have to send our best and brightest overseas and make sure they have the training that will allow them to be the global leaders who will make GE flourish in the future.”

Similarly, the retail CEO of the future can’t have spent their entire career as a brick-and-mortar merchant. They need to experience all sides of the business, especially those which will make the company flourish in the future.

Bill Bittner
Guest
Bill Bittner
7 years 5 months ago

There are three broad applications of technology to retail: logistics (including returns), promotion, and acquisition (purchasing). The CEO has to support technology but retail remains a “people business.” Whether it is motivating the warehouse to push through the holidays, encouraging the store personnel to get those window displays in place, or convincing a supplier that their best deal should go through his channels, the CEO must encourage everyone to give the his organization their best.

I always remember a warning I received during a course on advertising. A very big mistake advertisers make is looking at the world as if everyone is like them. Where RetailWire readers may be more advanced on payment systems and logistics, there are still plenty of people shopping with cash. It is premature to think everyone is switching to Apple Pay. It is important to understand who your customers are before you begin changing.

Lee Peterson
Guest
7 years 5 months ago

Digital experience is good, but that’s still only a tactic. Companies like the Gap need merchants in charge, and visionary merchants to boot. Without the right product—product that resonates with core customers—it really doesn’t matter where or how you sell it. The customer will find it. How have they been doing since the “Merchant Prince” left? I rest my case, your honor.

Now, should the “visionary merchant” have a digital person at his or her right hand? Sure, but he or she should also have a great store experience person there as well. As Howard Schultze just said in a video about his new “Willy Wonka Coffee Store,” “with more and more people shopping online, the stores need to become someplace very special.” Right on, visionary merchant.

Phil Rubin
Guest
Phil Rubin
7 years 5 months ago

Of course having digital tech experience is a bonus but that alone means nothing in terms of c-level or even retail success. Retail, even at Amazon, is not purely a digital world, and certainly not the way it is at a Facebook or a Google, who don’t sell physical products.

Retail is and will always be a business where there needs to be broad understanding, expertise in leadership, sound judgement on people and merchandise, financial and analytical acumen, and a sense of where to guide the business for tomorrow. This is where digital will have real impact, but by itself it’s entirely inadequate.

Shilpa Rao
Guest
7 years 5 months ago

A CEO has responsibilities beyond digital, and while digital background is a bonus, a well rounded experience can go a long way. It is necessary to digitally reimagine the organization, but managing the change and getting the organization to adopt the new culture is crucial.

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