It takes a special leadership team to sustain success in an omni-channel environment.
We all know about the impact the new digital organisations are making. We’ve heard it many times – Airbnb is the largest hotel chain without owning any hotels; Uber the largest taxi firm without taxis; Amazon and Alibaba are the largest retailers with no shops and Facebook the most popular media company with no content.
But spare a thought for those traditional retail organisations trying to compete in the digital world. But further to that, trying to build a competitive advantage by maintaining the bricks and mortar as their shop window but at the same time trying, by necessity, to provide the customer with a seamless shopping experience across the physical and on-line channels. The omni-channel world provides a clash of old world and new world: different value chains co-existing; legacy ERP systems working alongside new digital technologies.
If it can be made to work the consumer wins.but can the retailer win?
Traditional business models have different internal systems, governance, cultures and approaches to doing business – compared to digital firms. There has been a transformation of customer relationships with digitalisation. The question remains, can any traditional firm combine what is best about their bricks and mortar model with an on-line world, where prices are being forced down and automated customer centric processes take the place of human interaction and intervention. Even returns and solving customer disputes is replaced by a no quibble returns policy. Technology in the old world was about operating the business model more efficiently. Today it enables the relationship with customer.
So, a model that combines the ‘old world’ and ‘new world’ through what has become known as omni channel provides enormous challenges for leaders. I’m not about to solve all of these leadership challenges but it is a good start to recognise them.
1. How many CEOs and Directors out there can create a unifying vision across the channels – across traditional channels and digital channels. Mark Lewis, Retail Director at John Lewis (no family connection) had been MD of Ebay UK and has in the last week been appointed as the CEO of Moneysupermarket.com. Aside from possibly being disappointed at not being offered the vacant position of John Lewis MD, could his return to the on-line world send a message out about the challenge of setting a sustainable direction for omni-channel?
2. Managing the current legacy business effectively whilst creating the conditions to meet the challenge of on-line operations requires a special sort of leader. Do these leaders exist?
3. How do leaders measure performance across different channels?
4. What people processes are put in place – how do we pay and incentivise; how is talent identified, allocated, developed and retained?
5. Collaborative models and ‘partnership working’ are not the traditional ways of working for large self-sufficient organisations – can they adapt and thrive in this slightly alien world?
6. Traditional organisations rarely lead the market – they follow, often by observing the new trends then buying up the new start innovators. But the respective mentalities are different and if an attempt is made to integrate an innovative digital company in a way that demotivates the very people who it relies on to stimulate innovation, then staff leave and the value in the acquisition is lost.
7. Setting the strategic direction and aligning the organisation to the strategy will be a tough ask. Vodafone and other mobile phone companies, the banks and the retailers all have a mountain to climb in moving to the inevitable goal that is consistency across the multiple channels to create a seamless experience.
I apologise for not providing some answers, but I think more work needs to be done. We can either bury our head in the sand, cross our fingers or search for new operating models and organisation designs that enable leaders to create a new dashboard. More Tesla than Mondeo, or perhaps one of the new breeds of hybrid.