The operating model of the future

We recently hosted a breakfast seminar on the Operating Models of the future, led by Ralph Behnke

A clear takeaway was that we are still on our own journey to understanding the journey of our customers. As employees of an “omni-channel” retailer, but as customers of other retailers, we are far more likely to adopt new technology outside of the workplace than we are to implement them within our organisation.

Operating models

The operating model of the future is an unknown. Customer data analytics and developments in the technology space will help us to develop an optimal proposition; however, the path is fraught with challenges – most of which we have not managed to overcome.

During the round table we talked about a number of these challenges & about the opportunities they provide. We broke these down under the layers of Customer Strategy, Process, People, Technology/Data, and KPIs.


Customer strategy

  • Do you have an updated customer segmentation, and how “hyper-polarised” are these segments? If you don’t, re-do it. Being average means nothing: you can’t be all things to all customers.
  • We still don’t really understand our customers’ journeys. What is their need at each point in this journey? This has helped a grocer to develop their proposition.
  • Who owns this? It should be everyone: from shop floor to top floor, but how can we do that? See below…


Process

  • It’s very difficult to unite channel-specific processes, unless you are an online business moving into stores (like a luxury .com furniture retailer moving into showrooms).
  • You all need to walk the customer journey and act the customer persona. Walk the map, end-to-end, looking into your customers’ futures.
  • We need our colleagues to own the output of the process, not the process itself. What is the point of a BPO; how can you measure that?
  • You have to tear up processes and rebuild them. It’s about being honest and brave. If you don’t push hard enough and you aren’t brave enough, it’s not going to work.
  • Pilot a process to show impact. Start small and show the end-to-end value map. Use change agents here.


People

  • Your store colleagues are customers and consumers. Leverage that. They know what good looks like, and they know your customers more than we do!
  • Using social media (e.g. store colleague Whatsapp groups) to communicate change.
  • Realise how hard it is for store colleagues to adapt, especially to an 80% complete solution. Empathise, and take them with you. Is the training really good enough?
  • Our Board & Management Team need to back the new solution. One “gremlin” can ruin everything. This gremlin often sits in the Retail department. Manage them well.
  • Middle Management need to be taken on their own journey; explain that this is not about cost-cutting. As Rowan Gormley of Majestic said: "the management need an investment mind-set, not a cost reduction mindset."
  • Honour influential/potential blockers as change agents: they will take people with you. Don’t just do a cascade and expect that people will go on the journey with you. They won’t.

Technology

  • Ensure all programmes start with the customer value, not the tech. Tech solutions can get out of date quickly. Innovate: take on smaller pieces of tech work and pilot this with certain functions. 
  • Your technology team is integral to your transformation. Their reporting line and KPIs should reflect this fact.
  • The back-end needs to be flexible enough (e.g. Honeybee managing hyper-polarised customer segments – you can build a brand around this).

KPIs

  • Cannot be channel-specific. Everyone needs to know which part of the journey they are accountable for, and what outcomes their actions have.
  • Measure everything. Hire those teams of BAs. Invest in understanding your customer and predicting their future purchasing behaviour. 

 

Georgia Hartley-Brewer and Stuart Hogg manage the Retail practice at Interim Partners

Comments

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Frans van de Schootbrugge

07 Nov 2017 17:30 PM

Looks great, shame I had to cancel, I would have really enjoyed this.
What I miss a bit is the power of data. For instance I have been working on NPD from a technology perspective with customers in mind. Only a small percentage of products make it to launch. However, a year later you may have another go. Most retailers have not kept the testing data, etc. So lessons learned are very costly. But if a product makes it to launch, many retailers do not have Product Lifecycle Management in place, duplicating data.
Anyway, this is why I would have liked to be there! I look forward to the next one. Frans