Tag Archives: Hedgehog

The Retail Technology Trap

Never Succumb To the Technology Trap

The experience most consumers will have with a digital retail service is a self-service check-out (like many major supermarkets); however, over the past couple of years, there have been a number of amazing technologies for retail businesses. This could include anything from the collaboration of Myer and eBay to launch the first virtual reality department store, Neiman Marcus’ “Memory Mirror”, Afterpay’s online payment instalments or Temando’s intelligent fulfilment solutions.

hand holding the phone with mobile wallet online  to shopping on the store

 

That said, when you hear about a new technology that claims to be the latest and greatest ever made, do you rush out and invest in it in the hope that it may add value to your retail business? If you’re the type of company with a habit of investing in technology for the sake of it, then you need a reality check. It’s time to turn your back on the technology trap and start using your common sense.

In his book Good to Great, Jim Collins it wasn’t a surprise that more than 80% of great companies do not rank technology as one of their top five reasons for making a great company. So, unless a technology fits squarely in with your Hedgehog Concept, you should ignore it.

Does the technology you use fit in with your Hedgehog concept?

Good retail companies often look to technologies to help take them to the next level, whereas great companies always use technologies as an accelerator to enhance their Hedgehog Concept. When a technology aligns with your Hedgehog Concept, you need to act like a great company and become a pioneer of it. If your Hedgehog Concept doesn’t drive the use of a technology, you either have to settle for parity or ignore it completely.

I’ve seen leading edge technologies that have been pioneered by great companies. However, I’ve also seen the same technologies in “comparison organisations” and witnessed them fail to produce the same results.

Before jumping on the technology bandwagon, you need to ask yourself:

  • How does this technology connect with our Hedgehog Concept?
  • Can we be pioneers in the technology?

If you answered no to both questions, just forget the bloody technology and move on. It’s so easy to panic in fear of being left behind, but you need to stop worrying about what technologies your competitors may or may not be using, as they will never be the answer to making you great.

The bottom line

Technology should only be used as an accelerator, rather than a creator of momentum. While I understand that it can be hard to dismiss the hype of current technologies, you need to have absolute discipline and steer clear of any technology trends that don’t support your Hedgehog Concept.

As Norwegian politician, Christian Lous Lange once said, “Technology is a useful servant, but a dangerous master.” Never use technology as a primary means of igniting transformation – but if you can, always become a pioneer in the application of carefully selected technologies.

A Culture of Discipline

Why You Should Create A Strong Culture Of Discipline

Have you ever worked for an organisation and wondered if it’s the lack of leader and worker discipline that has prevented it from rising to the next level? I have – and I’m not alone in my thoughts. Business expert and author of Good to Great, Jim Collins has stated: “a culture of discipline is not a principle of business; it is a principle of greatness.” After all, great retail companies that grow and continue to succeed are led by self-disciplined leaders who encourage a deeper culture of discipline.

businessman thinking and looking in night city

 

I’m not talking about dictatorship or forcing behaviours and rules. No one likes a tyrant. It’s about creating processes and systems within your company that keep your workers motivated and focussed on ensuring you build a strong foundation of discipline as a team.

However, the breakthrough point can only be reached when you achieve a seamless culture of disciplined people, disciplined thought, and disciplined action.

Disciplined people

Regardless of how small or large your organisation and your management structure, discipline must start at the top of your retail chain. If there’s a lack of discipline at the head of your team, problems among staff can easily escalate. It’s always up to leaders and CEOs to set the right tone and culture of a business – which is why it’s crucial for you to adopt Level 5 leadership qualities.

Level 5 leaders are humble with huge ambition for their organisation rather than themselves. Not only are great leaders proven to be better at creating a culture of discipline, but they also praise their workers and take personal responsibility when the shit hits the fan.

As a leader, it’s up to you to build discipline in both thought and action by setting clear expectations, reviewing performance, and rewarding disciplined behaviour. You also need to provide those who are unwilling or even unable to help you sustain such a culture of discipline with a one-way ticket off your bus.

Disciplined thought

In my last article, I talked about the Hedgehog Concept – and how retail businesses who are like hedgehogs are able to transform the complexities of a business into simple and profound solutions. The Hedgehog Concept also involves setting a simple business strategy to ensure accelerated growth through three key questions including:

  • What can you be the best at?
  • What drives your economic engine?
  • What are you deeply passionate about?

You need to be honest and disciplined in answering all three questions without being distracted by outside opportunities to find your Hedgehog Concept and stay within the three circles. It takes disciplined thought to understand the three circles and say no to anything that doesn’t fit within them. Without disciplined thought, you won’t create anything great at all.

Disciplined action

To ensure you successfully execute your main business focus and strategy, it’s essential that you take disciplined action. Be sure not to confuse reactive action for proactive action, though, or you’ll end up like many good and average companies that struggle to see long-term growth plans succeed. Start with a ‘to do’ list and a ‘stop doing’ list.

Ask yourself – which actions best support the Hedgehog Concept and which ones don’t? It’s up to you to figure out and strengthen the discipline to do the right things and eliminate anything that falls outside of the Hedgehog Concept’s three intersecting circles.

Essentially, you need to stop:

  • Making rash decisions
  • Trying to expand your business without the right strategy
  • Trying to rival your competitors for the sake of it
  • Hiring people that don’t fit with your disciplined culture
  • Undertaking anything that doesn’t meet your long-term growth plan

You’ll initially need to do some experimenting to build a culture of discipline and responsibility, as well as define specific goals. On-going analysis of your strategy is also key to ensuring your retail business stays on track and you can establish any minor problems before they become too big to rectify.

Ultimately, in order for your business to work, all three concepts must pull in the same direction. But remember – a culture of discipline is not just about action. It’s about building a culture and team of self-disciplined and passionate individuals who engage in disciplined thought and ignore opportunities that fall outside the three circles. Only then can you take disciplined action to ensure the flywheel (your retail business) can really take off.

Retail Concepts Using “Good to Great”

Here is a simple take away cheat sheet that I use when presenting the six concepts of “Good to Great” by Jim Collins and how they relate to the Retail Industry. It is not meant to be a deep dive into the book (some of my upcoming blogs will dig deeper into each concept), but rather a quick reference on the six concepts and a few important points.

Remember the Fly Wheel Effect – all of the concepts work together to achieve the results – there is no miracle moment – it is an evolution. We implemented these concepts at OrotonGroup prior to the major turnaround in the business 10 years ago.

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Level 5 Leadership

Personal humility and professional will. They channel ambition into the organisation, not the self. Not a high flyer or larger than life. They look in the mirror when something goes wrong and look out the window when giving credit. Comfortable that they may not get credit for success. Many Australian Retailers achieve Level 4, but few achieve level 5.

First who, then what!

Get the right people on the bus and the wrong people off the bus. Begin with who, rather than what and the transformation will be easier. Great vision without great people is irrelevant. When you need to make a change, make it quickly. Retailers need to have the correct structure with the right people. Nepotism has created issues within several Australian retailers. Only hire friends or relatives if you can separate business with personal.

Confront the Brutal facts (The Stockdale Paradox)

Admiral James Stockdale survived 7 years in a Viet Cong POW camp by hanging onto two contrary beliefs – His Life couldn’t be worse at the moment (the brutal fact) and his life would someday be better than ever (unwavering faith). Be brutally honest about your current situation, but never give up. There are several retail examples in the past few years that demonstrate what happens when you wait too long to confront the brutal facts.

Hedgehog Concept

You need to be the best at your clearly defined niche. You cannot be all things to all people. The intersection between – what you are passionate about, what drives your economic engine and what you can be best at. A Fox knows a little about many things. A Fox is complex. A hedgehog knows only one thing very well. A hedgehog is simple. Department stores struggle with this whereas specialty stores often find this niche and thrive.

Culture of Discipline

Companies build rules to manage a small % of the wrong people which in turns frustrates the right people. A great organisation is high in entrepreneurship and high in discipline (a blend of magic and science). Get everyone going in the same direction with the same goals – communicate.

Technology Accelerators

Technology is not a fix to problems. It helps you achieve a great strategy, but it isn’t a strategy in itself. Use technology to truly differentiate yourself with competitors if warranted. Get the basics right with technology, but don’t get caught up in the hype. Aussie retailers love the concept of technology, but few do it well. If you choose to spend on new technology, make sure that you use it completely – if you collect data – analyse it and adapt your behaviour.

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