It has been well documented that businesses with strong leadership are 13 times more likely to outperform their competition, and 3 times more likely to retain their most talented employees (DDI Global Leadership Forecast) but what does this mean for companies in the retail industry and the specific leadership challenges they face?
Retail is characterised by its fast-paced environment, which often is the lure to many individuals who thrive in that type of culture. However, the need for agility and the ability to respond quickly to customer needs in fast paced, a change-hungry environment is stronger than ever before. This has created a faster decision-making need for leadership and a case for streamlining management to empower individuals under the leadership of fewer, bigger leadership roles. This allows for decision-making responsibility to be more devolved across the organisation but relies on a collaborative culture, awareness of collective bias and a high degree of trust and competency. Leaders must be able to navigate the dichotomy of a collaborative culture with a new level of simplicity.
Who’s the next in line?
Retail has been characterised by a high degree of sustained turnover at the top. Fifty-nine percent of retail companies studied experienced a change in CEO leadership during a five-year period and almost a third left the role within 3 years (Russell Reynolds.) Added to this, retail companies seeking a new CEO tend to seek a successor from a circle of immediate competitors rather than casting a wider net. This means that, as CEOs retire, the net is getting smaller and smaller and not enough retail companies are investing in proactive succession planning. Combine this with the consolidation of fewer, bigger leadership roles and the opportunities for the planned development of successors become smaller. Early identification of potentials, with clear career plans, development and exposure to a multitude of roles will help to retain the talent needed to lead in the future.
Motivate, motivate, motivate
From our experience in retail, leader behaviour tends to favour the more traditional rousing motivational style which is effective particularly in groups. High preferences are shown to be colourful, passionate, fun personalities. This is needed when dealing with store and area teams and cascading messages from the top in a traditional hierarchical structure. However, there are blind spots and development needs when it comes down to treating individuals differently and maximising their individual strengths. The preference is to ‘tell’ rather than to ‘ask’ and unlock the power of the group through creating the environment where ideas are generated and creativity is encouraged. The opportunity here is to build on the innate strengths of the leadership community and to develop on a group and personal level their ability to coach, to adapt their style to the situation and the individual while still keeping pace with the environment.
Changing customer behaviour
At the end of February, the British Retail Consortium warned that the move to internet shopping is putting hundreds of thousands of jobs at risk. Customer needs are changing. Digital and multi-channel solutions will mean that store presence is reduced, diversified or altered in coming years. This presents leadership challenges in terms of keeping productivity and morale high during such significant change, as well as keeping ahead of the game in terms of making their inventory visible across channels with an integrated fulfilment strategy. The customer now wants multiple delivery choices, short lead times, and convenience with a consistent brand experience and a consistent returns policy, all with cross-border repeatability. It’s not an easy journey. The mix of transformation needed will be a test for all retail leaders.
Collingwood is a trusted advisor in acquiring, aligning and enabling leadership for growth. Jennifer Jones is a qualified executive coach with 15 years consultancy experience in leadership and business transformation.