Think Tank: What It Takes to Create a Digital-First C-suite
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So, you want to be a modern, successful retailer? Then get with the tech program.
From the c-suite to the sales force and through the back office, there is no hiding place. Driven by the need for connectivity in the use of big data, the new “tech skills” in retail are necessarily impacting everyone across every role and every function.
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This sense of challenging and even scary brave new world — allied to often successful disruption of the traditional retailers — has led some to feel that we are somehow in the midst of a retail apocalypse.
We are not, in fact, experiencing the slow death of an industry but simply a reinvention — where current upheavals, competition and disruption will result in a better, more agile and frankly more exciting consumer-centric landscape, with technology at its core.
Consumer Changes Shake Old Ways
People are still going to be buying stuff. The stuff will be smarter, and the buying smarter, too.
In fact, technology innovations — both to products and the whole process of buying — drive and are driven by customer behavior and requirements. This dynamic at the heart of retail has not changed: when to nudge and lead your customers, and when to be nudged or led by them.
As a result, new business models are creating waves that are shaking the foundations of retail. It feels disconcerting. At its most basic level, this obviously requires new functional technology leaders to bring much valued digital skills to shape and to operate the business systems of these new business models.
But how do we assess the impact this has on the rest of the c-suite whose roles have traditionally not required a high level of engagement with technology, the previous applications of which were often largely operational?
C-suite at Its Inflection
It is fundamental that all c-suite executives now should have a sufficiently substantial working knowledge of technology that will enable them to identify and communicate priorities, and to make better quality decisions that will likely enhance competitive edge.
To be clear, there is no need for everyone to reinvent themselves as a “tech expert” but knowing what is possible and achievable with new technologies — especially, whether and when to invest — is paramount. As a result, all c-suite executives need at the very least to attune themselves to the key drivers, and building blocks, skills and competencies that matter within their sphere of influence.
You don’t actually need to know all of these in fantastic depth, but you will need to know what they are, how they can help you achieve goals, and why and if they are relevant to your colleagues’ roles, too. Importantly, this will teach you how to talk to peers who already act like they “own” this. They really don’t: you all do! The very connectivity referenced above means no one person or function gets to “own” anything by themselves anymore.
Introducing a chief digital officer as the digital champion is one way to try to drive a digital-first culture, but unless digital belongs to everyone, not least the chief executive officer, this will fail to meet the need.
Digital Culture
Perhaps the most significant challenge this highlights is cultural. “Digital” is not a single issue or a set of discrete problems to solve before reverting to do as you have always done. Digital is the new normal, here to stay, and in many ways is as much about people, mind-set and therefore culture as it is about the technology. Getting with the tech program is not just about the tech.
Culture change starts with, and at, the top. A ceo must now be comfortable with being out of their comfort zone; must be able to deal with change and some ambiguity, and must be able to evolve and refine strategy in a volatile world.
Walking the walk as well as talking the talk remains crucial. So the generic skills of listening and learning remain paramount, even — especially — when you might feel out of your depth, or at least outside of your comfort zone.
Defining Success
Successful ceo’s will need the change management skills and global orientation the industry is demanding, but they will also be sufficiently fluent in technology to enable them to create an integrated strategy that harnesses the collective abilities of the c-suite and integrates all business skills.
Seeing and using technology as an enabler is crucial. Investment in innovation hopes to create insight-driven organizations that should then be central to the core strategy of the business. But in order to turn this data into insights and on to action it is essential these new processes are connected into the business and not detached from the organization. It is important to appreciate that technology advances not only affect all roles within the c-suite but also that they are not confined to “what the customer sees.”
Digitization of the supply chain, in particular, means a fully integrated and transparent ecosystem that is agile, efficient and customer-focused.
Hiring for a New Culture
Likewise, the new digital ecosystem is being created in a digital workplace that alters the role of the chief human resources officer.
Hiring new technology and digital skills to the organization requires new assessment criteria in understanding what good looks like and how to onboard and retain a new type of employee successfully. Key to this is understanding the different motivators and drivers of a new Millennial and Gen Z workforce and how they measure their own success, impact and engagement.
Not only are h.r. personnel implementing deep transformational organizational change and changing operational h.r. processes to become automated and data-driven, but they are also having to navigate the complexities of a new kind of workforce who will drive this change.
Collaboration for Innovative Change
Equally central to success is the evolution in the relationship between the chief innovation officer and chief marketing officer who are now critical partners in the new digital customer experience.
The chief marketing officer must learn to speak the language of the chief innovation officer — and vice-versa — and to recognize that technology is both a strategic partner in designing the digital experience and a facilitator of business revenue generation. Our all-new chief marketing officer must be adroit at using mobile, customer metrics, social media and even sensor technology to understand the customer journey and should build teams that combine the best in technical and analytical skills with creativity and intuition. Big Data is changing the skill set of merchandisers, too, whose roles are evolving as consumers seek a more interconnected shopping experience.
Decisions are increasingly driven by analytics over retail instincts, with systems and tools now accounting for many day-to-day tasks. This has placed a higher premium on analytics and the commercial ability to interpret the insights which flow from this, allowing adaptation and even prediction of consumer trends. These are essentially market research disciplines for the modern age.
Precisely because many retailers are reducing their physical footprint with store numbers dwindling, it is ever more important that the front line sales employees left on the shop floor should engage more immediately with the customers in the store. They need to be tech-savvy but also trained to be multichannel in thinking, recognizing the interrelationship between online and off-line, and the part that digital plays in physical sales.
Once the bedrock of a retail business, these sales roles are on the decline and in an industry that is still one of the biggest economic employers this is having a huge impact on the employment retail demographic.
Those same retailers are now hiring more data engineers, software developers, digital marketers and artificial intelligence experts than ever before.
Ultimately every aspect of retail is being transformed by digitization as companies strive for the nirvana of seamlessness between online and off-line sales. But even as technology plays an increasingly important role, our best retailers know that investing in their employees and their skills, from the c-suite to the shop floor, is still the secret of success.
Melissa Reed is a partner, retail and consumer at H.I. Executive Consulting.
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