Why companies need a digital transformation strategy – MuleSoft

The hottest trend in business. A recent survey by MuleSoft found that 97% of IT decision makers are involved in digital transformation initiatives at their respective organizations. But what exactly is digital transformation, what are the benefits and why is it so essential to so many businesses? The story of Netflix and the last Blockbuster shows that digital transformation can sometimes be the choice between becoming a business icon and becoming extinct.

Tourists from around the United States snap selfies in front of the BlockBuster store on N. Revere Avenue in Bend, Oregon. In March, after a Blockbuster in Perth, Australia closed, the Oregon store officially became the last of its breed.  “It’s a piece of history that I never got to experience,” Cole Stephens told CBS News reporter Jaime Yuccas, “so it’s kind of fun to come and check it out.” The owners say the store is still profitable, but joke that if DVD rentals decline, they can always turn the store into a museum.

The factors that led to Blockbuster’s disruption are driving business and technology leaders to embrace digital transformation in droves, even if it means overcoming a host of challenges. Ask a leader of these organizations what they want from their transformation, and they will say they want to become as agile as Amazon, as innovative as Google, and as iconic as Netflix. For many, this requires ambitious change initiatives, both technological and organizational. They must adopt not just one new technology, but many, and learn to see their business from the outside-in. Software must become a core competency, and they must develop the ability to use data as a differentiator.

No wonder most digital transformation strategies  end up being complex and messy. Many companies focus on the “what” rather than the “why” and “how.” They launch projects to accomplish everything from the digitization of paper records to sweeping reorganizations of global businesses. In doing so, they fail to grasp the essence of what makes digital transformations different from large-scale technology shifts they have undertaken in the past.

Adopt not just one new technology, but many

Unlike the move from mainframes to PCs, the Internet, and the cloud — digital transformation is not centered around one single disruptive technology. You cannot buy a digital transformation off the shelf or cobble together a best-of-breed solution. Expertise is hard to come by. Transformation requires a constellation of new skills. Just understanding the impact of new technologies on a particular line of business can be daunting.

And the rub of digital transformation is that learning the ins and outs of new technologies is not enough. To thrive in the digital age companies must realize that digital products are experienced as much as they are consumed and must reimagine these experiences from their customers’ viewpoint.

See your business from the outside-in

The lesson from the demise of Blockbuster is not that it chose the wrong application monitoring product or CRM. Perhaps Blockbuster’s biggest misstep was that it failed to recognize that it was no longer in the DVD rental business. From its customers’ perspective, Blockbuster was a provider of home movie viewing experiences. As broadband spread around the world, increasingly customers had new options for those experiences provided by web-enabled, software-savvy businesses.

In 2010, three years after the Netflix began introducing video on demand, Blockbuster declared bankruptcy. The next year, Marc Andreessen published his landmark op-ed in the Wall Street Journal, “Why Software is Eating the World.” Andreessen argued that “we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.” The gains from successive technological advances had compounded, and “all the technology required to transform industries through software finally works and can be widely delivered at global scale,” Andreessen wrote.

Develop software as a core competency

It was a core insight that many have failed to grasp. It isn’t enough for businesses to use digital solutions. Going forward, the most successful companies will be those who are able to produce and deliver software as a core competency. Even Netflix was initially slow to react. It was still sending out its trademark red envelopes when Amazon introduced video-on-demand in 2006, and Hulu launched its online streaming service. In January 2007, when Netflix finally unveiled “instant streaming,” it offered only 1,000 titles. Such a small selection had doomed the first generation of download services. But with Netflix, there was a crucial difference.

Reed Hastings, Netflix’s CEO, understood the fundamental opportunity and benefits offered by digital business. Better software didn’t just make companies more efficient; it allowed them to evolve. Starting with the company’s launch, Netflix had maniacally gathered customer input through focus groups, endless A-B testing, even observational visits to their homes. The data drove the design of the website and business decisions, everything from pricing to the location of distribution centers to support faster delivery. However, the innovation that made Netflix hardest to beat was its ability to help customers find movies they loved.

Make the most of your data

The Cinematch algorithm was the result of years of refinement. Initially based on customer rankings, it grew increasingly sophisticated over time. It clustered customers who liked similar movies together, analyzed that data and observed how a particular cluster reacted to a particular movie. The launch of the streaming service provided even more data for the algorithm. In addition to preference information gathered from a customer’s queue and ratings, there was now behavior information—when customers watched a movie, whether they quit after five minutes or forty, which scenes they watched repeatedly, which they skipped over, and more.

Netflix now boasts the world’s largest streaming service. At the end of 2018, it had more than 117 million subscribers, including 58% of all pay TV subscribers in the United States. It also offers one of the premier case studies for digital transformation. It’s no accident that Netflixed, a 2012 book written by Gina Keating, made it onto Fast Company’s list of 12 books business leaders should read in 2019.

Manage change one project at a time

Netflix transformed a traditional business of sending packaged goods in the mail into a digital experience. But they didn’t become a software company overnight. They moved forward one project at a time, gathering feedback that was then used for the next initiative. Business and IT leaders who are overwhelmed by the scope of their digital transformation initiatives can take heart. Like Netflix, they can create code and build competence and benefits incrementally, acquiring an understanding of how software and digital tools can help their lines of business through a series of successes based on feedback acquired over time.

A key ingredient in Netflix’s digital transformation strategy was their use of APIs within their software landscape, both as a gateway for third-party developers to develop applications for customer experience platforms, as well as components at the core of their internal service delivery systems. We will describe the different benefits APIs can bring in the next section, “How APIs can focus your digital transformation.”

Share your views/questions…

“Modern Grocery Retail” & the Emerging-market consumer : A complicated courtship | McKinsey

In some “Emerging Markets”, the response to “Modern Grocery” formats has been tepid. What’s a Modern-Grocer to do ??

20 years ago, Modern Grocery Retail appeared poised to conquer every consumer market in the world. Ambitious European grocers, having blanketed their home countries with Supermarkets and Hypermarkets, began setting their sights on growth both within and beyond the continent. They held particularly high hopes for China, India, and other emerging markets, where fast-rising consumer spending seemed to presage an unprecedented demand for gleaming new stores with large assortments, wide aisles, and bright lighting.

In the 1990s, the term “modern grocery retail” was essentially a proxy for a small group of multinational grocers including Ahold, Aldi, Auchan, Carrefour, Costco, Lidl, Metro, Tesco, and Walmart…It was widely presumed that these retailers’ entry into any market would lead to the demise of the traditional trade—the family-owned grocery chains, small independent stores, and informal merchants that at the time accounted for the vast majority of grocery sales in emerging markets. The prevailing expectation was that although there would be local differences due to cultural specificities, in every country the retail landscape would eventually consist of a combination of modern formats: full-line supermarkets and hypermarkets, convenience stores, and discounters..

These assumptions have been proved wrong. Global grocery giants are struggling to grow profitably in many emerging markets… whereas, Traditional trade has proved remarkably resilient…And the market and channel structures taking shape in individual emerging economies are distinct from one another, following no obvious pattern.

Why did this happen? What, if anything, did multinational grocers do wrong? And what does it mean for the future of modern retail in emerging markets?

The Hypermarket’s shortcomings:

To understand the disparity between early expectations and the current reality, it’s useful to examine the roots of the two quintessential modern-trade formats: the supermarket and the hypermarket. The hypermarket in particular—whether in its European form (in which food anchors a massive selection of nonfood items) or its North American one (the “supercenter,” which represents the successful injection of food and grocery into a general-merchandise discount store)—was widely regarded as unbeatable. By offering tens of thousands of products in an immense building just outside or on the edge of a town or city, a hypermarket could operate at a level of productivity that other grocery formats struggled to match. Hypermarket operators passed on these efficiency gains to consumers in the form of lower prices, which served to reinforce hypermarkets’ advantage.

In their first forays into other developed markets abroad, major retailers relied heavily on the hypermarket format. When French retailers Auchan, Carrefour, and Promodès opened hypermarkets in Spain during the first years of Spanish economic reform, they quickly captured a large fraction of that country’s overall grocery sales and dictated the market structure that remains in place to this day.

Expansion across Europe was an exciting growth prospect, but even more enticing to retail leaders and investors was the growth potential of emerging markets. Over the years, that potential has become even clearer: by 2025, we expect emerging markets to account for $30 trillion in consumer spending, or nearly half of global consumption.

When multinational grocers entered emerging markets, they again relied on the grocery formats that were working so well in the developed world. But, in retrospect, it’s clear that the countries in which the hypermarket prospered had several characteristics in common: good road networks and high or fast-rising car-ownership rates, a large middle class that enjoyed decent wages and stable employment, and a high proportion of rural and suburban households with enough room at home to store groceries bought in bulk. Also, those markets had grown to maturity at a time when many women didn’t return to work after having children and therefore had time during the day to drive to and from the store. The hypermarket format draws heavily on consumers’ time, ability to travel, and storage capacity…

In Emerging Markets, retailers encountered an entirely different context. Consumers were less affluent and lived in urban areas; many didn’t own a car, couldn’t afford to travel to and from a relatively far shopping destination, had no room at home to store purchases, or all of the above..

A new respect for localism:

Further complicating matters, emerging markets weren’t just different from developed markets; emerging markets also differed from one another in nontrivial ways. That was true in the 1990s and it remains true today. Based on our research—which involved in-depth study of the retail sector in ten developing countries in Asia, Eastern Europe, and Latin America, as well as interviews with more than 20 local retail and consumer experts and analysis of channel-growth data in these markets—we’ve developed a perspective on the factors that have hampered the growth of modern trade in emerging markets.

On both the demand side (what customers want from retailers) and the supply side (the means by which retailers can deliver what customers want), different factors shape the retail ecosystem in each country. Together, these factors produce wide variability in the level of modern-trade development in countries around the world (Exhibit 1).

On the demand side, for instance, food-shopping habits have turned out to be largely localized and deeply entrenched. Emerging-market consumers tend to prepare their own meals and cook more than their peers in developed markets do, and they are accustomed to shopping at open-air market stands or small neighborhood grocery stores that offer a familiar selection of fresh food and household staples. They don’t necessarily perceive customer service at modern retailers as superior to that of the traditional trade. Customers of India’s kirana stores—small, family-owned retail shops in or near residential areas—already benefit from personal service from the store owner, free home delivery, and credit and cash rebates if they remain loyal..

On the supply side, a big factor is the informality of traditional trade: many small retail businesses rely on unpaid labor from family and friends, pay no rent because they own their storefronts, and don’t pay corporate taxes. Modern retailers cite this informality as a major challenge when competing with local retailers. A European hypermarket chain found that its considerable operating-cost advantage from better sourcing and supply-chain processes was canceled out by the fact that it was paying taxes while local competitors were not..

Another major factor affecting modern trade is public policy. India’s restrictions on foreign direct investment have limited the growth of modern retail there; in China, by contrast, city governments are assessed on the level of economic activity and foreign investment they attract, which makes them biased toward supporting modern trade. As a result, modern-trade penetration in China’s largest cities has grown significantly over the past 15 years..

A further supply-side factor in emerging markets is the fragmented supplier base, which places a natural limit on the benefits of scale. A retailer can’t source products as efficiently as it would in a mature market because it must buy from a complex network of regional and local entities. And even retailers with a national buying team won’t easily find national manufacturers who are eager to partner with them—a point we pick up on later.

Incumbent advantage is yet another powerful factor shaping retail ecosystems. Today’s market dynamics tend to become tomorrow’s market structure—so, for example, in markets in which a highly efficient wholesale system serves the traditional trade, it becomes much harder for modern grocers to gain a foothold. That said, wholesalers can also be vanguards of modernization. In Turkey, for instance, some Bizim Toptan stores have developed a substantial retail business. These wholesalers-cum-retailers illustrate the fact that ecosystems in emerging markets are partly shaped by players that can concentrate and coordinate a critical mass of what otherwise is a complex set of routes to market..

“Seven” strategic levers for success:

In parts of the world where the market structure is itself still in a formative stage, retailers need a bespoke strategy. Our research and experience suggest seven strategic levers that lead to success in emerging markets. These levers—having to do with delivering what consumers want, working effectively with other players in the ecosystem, and generating lasting productivity advantages—reflect perennial concerns for retailers everywhere, but they are especially critical in helping retailers secure a profitable future in the world’s fastest-growing economies.

The levers are by no means comprehensive. For one, they don’t touch on digital technology, which may well be just as important in emerging markets as in developed ones; indeed, rapid adoption of smartphone technology may allow emerging markets to leapfrog more mature markets and reconfigure the value chain farther upstream (for example, by giving smaller suppliers direct access to national and even global markets). Rather, we draw attention to areas that we believe require deliberate action in emerging markets-

1. Prioritize proximity.

2. Keep prices low—and make sure consumers know.

3. Obsess over productivity.

4. Make the business case to manufacturers.

5. Educate policy makers on the benefits of modern trade.

6. Consider partnering with the traditional trade.

7. Adopt a city-based strategy.

For any modern retailer, success in emerging markets isn’t guaranteed. Our research confirms the complexity and local specificity of market development and the degree to which it depends on initiatives taken not just by retailers but also by governments, manufacturers, wholesalers, and others in the local retail ecosystem. International retailers thus need to become experts at local tailoring. That said, operating in emerging markets still unquestionably requires excellence in core retailing competencies: marketing, merchandising, supply-chain management, and talent development, to name just a few…

Modern Retailers that excel in all these areas in the context of markedly different emerging-market structures will, in a sense, have conquered the world..!!

“10 Powerful Ways to Inject Discipline” Into the “Revenue-Generation Process”| by: Dave Stannard| Chief-Executive

 

Many CEOs of middle market companies view sales and marketing functions as autonomous. When problems or inefficiencies arise in operations, finance, manufacturing or other areas of a company, CEOs zero in on well-established metrics and processes to pinpoint trouble spots and address them. However, that same kind of rigor and discipline is often absent in sales and marketing…!!

As a result, the CEO may be unsure of the underlying causes of disappointing revenue performance and often miss the real source of the problem. Is it the market, pricing, sales team, go-to-market strategy, or something else??

To improve performance, where should CEOs get involved ??… By analyzing multiple clients across several industries, we identified 10 common trouble spots that yield the greatest revenue improvement potential. By beginning with the three or four that resonate most strongly for their company, CEOs will see revenue expansion and establish a systematic approach for driving continued growth..

1. Segment the market and target High-priority customers – All customers are not created equal. Therefore, the time a company spends parsing new customers should not be evenly allocated among its prospects. Nor should it be left to individual reps to determine how to spend their time. They tend to gravitate to accounts that are most comfortable, the loyalists, and not necessarily those that will bring the most growth, such as customers where the company has a lower share of wallet. Nudge them to step out of their comfort zone..

2. Develop meaningful Account plans – Requiring clear action plans for each customer account with tasks, owners, and timing allows for a shared vision of what needs to happen. The account becomes a company asset, not just an individual salesperson’s asset. Many sales reps view account planning as unnecessary additional paperwork—a “homework assignment” more about checking boxes than creating something of value. But a good account plan is indispensable in proactively determining how to grow a customer..

Sales organizations lacking detailed and effective customer account plans will struggle to focus on the right actions to grow their business. They simply wind up reacting to requests. Good account plans allow for tracking of progress and building organizational learning on what works and doesn’t. Plans facilitate coaching conversations, giving sales managers a tool to measure progress and coach strategy. In short, meaningful account plans drive revenue growth..

3. Monitor progress via a simple set of metrics – There are two important elements in monitoring: metrics and simplicity. CEOs aiming to inject discipline into the revenue-generation process must establish and track a defined set of metrics that aligns with their growth initiatives. Metrics provide a fact base about a company’s revenue performance, reveal growth opportunities, help CEOs gauge progress and guide sound decision-making. They are fundamental and must measure activity as well as outcome. Without the right metrics, companies can only base decisions on assumptions, anecdotes and outdated information, perpetuating poor revenue performance..

Good metrics-tracking plans encompass only those data points most relevant to growth. To be effective, track only those metrics that relate directly to your growth aspirations and levers. Don’t track metrics simply because others track them or because it’s the way things have always been done..

4. Provide effective Coaching & Sales supervision – Putting effective sales management at the helm of sales teams has far greater impact on performance than upgrading the talent of individual reps. Great sales managers lift the performance of the entire team while a mediocre manager degrades team performance and often prompts top performers to leave..

“Great sales managers know the importance of good coaching and do it consistently”…In its 2014 Sales Management Optimization Study, CSO Insights found that of companies with a formal coaching process, 62.3% of reps meet or exceed quota and the organization hits 91.2% of revenue plan attainment—sharply higher than companies with informal coaching. Yet only 21% of companies have a formal coaching process identifying appropriate coaching activities (group meetings, individual meetings, ride-alongs, celebrating successes, etc.), appropriate activity cadence, and tracking across managers. About eight in 10 firms are missing out on a potent opportunity to drive revenue growth..

5. Document the “company way” of selling – Over time, every company builds knowledge about the most effective method of selling. A key to revenue growth is spreading this knowledge throughout the company so it becomes truly institutional, not just resident in the heads of a few senior people. The best way to codify and document the company way of selling is to create a manual of best practices that provides step-by-step instructions for accomplishing the key responsibilities of different sales roles..

6. Analyze pipeline data for a better understanding of flow rate and revenue forecasts – Tracking the pipeline of growth opportunities for both new and existing accounts is critical for the CEO and his team. It provides a leading indicator of sales performance, enables resource/ production planning and reveals the drivers of customer win rates. But many organizations lack a real-time window into the sales pipeline and a method of analyzing pipeline data that isn’t cumbersome and time-consuming. As a result, many mid-market companies are overly optimistic in estimating probabilities and forecasts.

7. Maximize selling time – How does a CEO know whether his company’s sales force is spending enough time on customer-facing activities? In almost every organization, sales teams complain of being overburdened with administrative activities, not having enough time to spend with customers. Most companies don’t have a factual basis for addressing this issue. By requiring a short study to identify how much time the sales force spends on different activities, the CEO can help the company better understand how sales people spend their days and discover opportunities to increase selling time..

8. Track sales activity with a Customer Relationship Management (CRM) system – CEOs and sales leaders of companies without CRM systems suffer from a lack of visibility into customers and sales activities needed to systematically drive growth. Many middle-market companies may see these systems as too costly and complex to use and may not understand the value they provide. For instance, CRM systems enables increased sales productivity through contact management, tasks, calendars, etc.; better customer profile information; greater visibility into buying behavior; and, a more complete understanding of market penetration. For marketing, an automated CRM system provides a more complete contact database for marketing activities as well as a source for measuring the relative value of content, channels, cost per lead, etc. And for sales managers, the systems provide visibility into sales time allocation and more accurate measurement of activity and performance in sales and marketing..

9. Optimize pricing effectiveness – Pricing is one of the most effective profit-generating levers available to the CEO. On average, a 1% increase in price yields a double-digit increase in operating profit. However, effective pricing isn’t about simply raising prices—it is a complex area that encompasses many elements including base pricing, discounts, recouping cost-to-serve elements, charging for ancillary services and more. For most middle-market companies, the initial goals for pricing effectiveness should be to reign in unwarranted discounts and to get paid for customer practices that increase the cost-to-serve. Such costs include inventory carrying costs, rush orders, freight costs, customer delivery rules, technical support services and other special efforts..

10. Align incentives with specific growth aspirations – As CEOs evolve their growth and go-to-market strategies, they need to ensure the compensation plans for the sales force remain aligned with those changes. If not reviewed and aligned, companies risk failing to incent new growth behaviors, or worse—incenting the wrong behaviors. This puts their revenue goals at risk…!!

The most effective incentive plans disproportionately reward the top performers; pay explicitly for growth year on year; balance the amount of base pay vs. variable pay based on the control, responsibilities and risk inherent in different roles; are simple enough for employees to directly connect their actions to their pay; and are made up of both financial and non-financial components. Like pricing, compensation is a complex area…However, by ensuring these basic elements are followed, mid-market organizations will drive the sales behaviors necessary for increasing revenues..

Making Brick & Mortar Stores ” matter in a multi-channel world ” | McKinsey

As the role of the brick-and-mortar store evolves, retailers will continually have to refine how they use their real estate…!!

For decades, the retail industry has followed the same straight forward formula for growth: open new stores. By replicating a proven store format in a new catchment area, retailers could reliably enlarge their customer base and count on healthy increases in sales.

But the world has changed. More than half of consumers now research their retail purchases online, making purely in-store purchase decisions the shrinking minority. In many categories, e-commerce has dramatically lessened the need for physical stores. “Virtual space”—which we define as the floor space that would be required to generate the sales volume that online retail now accounts for, at a sales density equivalent to the industry average—is expanding at a staggering rate. In this new world, what is the role of the brick-and-mortar store?

Many retailers find themselves struggling with the question and saddled with more real estate than they know what to do with. After all, their property departments are geared up for expansion and acquisition. Their finance departments have traditionally focused on reaping investment returns from stores and tend to be jittery about investing in new and unproven technologies. On the flip side, their e-commerce directors are frustrated by this lack of understanding of the pace and mind-set such companies need to become digital winners.

To position themselves for success in a multi-channel world, retailers would do well to take a disciplined approach that begins with a reassessment of the role of the physical store. We recommend a FIVE-step approach we call STORE : starting with a clear vision for the future role of the store, tailoring categories and formats accordingly, optimizing the store portfolio using forward-looking analytics, reinventing the in-store shopping experience, and executing systematically across channels…

The incredible shrinking footprint: 

The effects of online migration in the retail industry are evident in every category. In the United States, apparel retailer Gap closed more than 250 stores in 2013; department-store chain Sears closed almost 200. Walmart’s new stores are about a third smaller than they were five years ago…!!

Online retail has affected more than just physical floor space. Amazon, for one, has put intense pressure on retailers’ top and bottom lines by having key items priced 13 to 20 percent lower than average, an assortment 17 times larger than the average retailer’s, and a cost base that is 3 to 4 percent lower than brick-and-mortar competitors’, all while achieving the highest customer-satisfaction scores in the industry. The combined effects of Amazon and other online retailers have rapidly hurt traditional retailers’ return on invested capital, as fewer sales flow through existing physical assets.

Many retailers’ instinctive response to these headwinds has been to close under-performing stores and to look for operational efficiencies, but these moves only buy time—they can’t fully close the performance gap…“Shrinking to greatness” is not the answer.

A framework for change: 

Shifting from a store-focused approach to a multi-channel mind-set requires retailers to change their traditional frames of reference and ways of working. As consumers increasingly shop across channels, terms like “convenience” and “efficiency” take on new meanings. Customer expectations are rising: for instance, customers now expect price consistency across channels, the ability to buy online and pick up or return in store, and a range of payment options. Price transparency puts pressure on retailers to develop ultra-efficient operating models. The wealth of online information available to consumers raises the bar for in-store service and expertise.

But let’s be clear: the brick-and-mortar store is not dead; it just plays a different role now. In fact, in a multi-channel world, physical stores can provide a competitive advantage… Some multi-channel retailers have seen growth in their online sales and penetration among consumers who live near their stores. In several sectors, “click and collect” is proving a popular and increasingly efficient means of serving the customer. More than 50 percent of Walmart’s online sales and around 40 percent of Best Buy’s already are picked up in stores. Best Buy’s store-within-a-store partnerships with Microsoft, Samsung, and other suppliers capitalize on manufacturers’ need to show off their products in a physical retail environment. Former online pure plays such as Oak Furniture Land and sofa.com have opened physical stores that now generate as much as 60 percent of sales.

Some retailers are now reshaping their store networks in response. One approach is to lead with a handful of flagship stores—which essentially become a marketing and service channel for the online business—supported by numerous smaller outlets that offer convenience and a curated product offering.

In light of rapidly evolving technology and consumer behavior, we believe retailers that take a forward-looking view and heed the following five imperatives can position themselves for multi-channel success.

Start by Redefining the role of the store:

The first question that retailers should ask themselves at the beginning of their store-network transformation journey is, “What role will my brick-and-mortar stores play in a multichannel world?” To answer the question, retailers must find out what their customers truly care about. They need to know which aspects of a store matter most to customers and what purpose a store serves for them:

• Convenience and proximity.
• Efficiency
• Inspiration
• Instant gratification.
• Discovery of a solution, information, or service.
• Entertainment and social interaction.
• Experiencing brands and products.

 

Economic considerations are important as well. For each of the purposes above, retailers should ask, “How can stores do this profitably?” There may be more than one answer and therefore more than one winning store format. In any case, the agreed-upon role (or roles) of the store should dictate every decision about the store operating model: location, assortment, staffing, supplier funding, employee training, and so on.

Tailor categories and formats accordingly:

Customer priorities and store economics should next become critical inputs into ongoing category reviews, to ensure that assortments and space allocations are continually optimized for a multichannel world.

Format decisions should also be driven by customer needs and priorities. Some retailers are adapting their store formats to the tastes and preferences of certain customer segments. Macy’s, for example, has embarked on a major effort to court millennials: it has launched more than a dozen segment-specific brands and created “destination zones” for millennials in its stores.

Optimize the portfolio using forward-looking analytics:

The next step is to re-evaluate the store portfolio through a multichannel lens. Leading retailers regularly analyze correlations between sales performance and catchment data to identify promising locations for new stores and to figure out the winning formula for top-performing stores; they examine factors such as population density, income, competitor presence, and average tenure of the sales staff. This is a valuable exercise, but in a fast-changing business environment, it’s not enough. Retailers must look ahead: they must extrapolate the impact of macro and industry-wide trends on the store network’s economics and operating model. And they must understand the impact that channels have on one another. One retailer that already had 100 unprofitable stores in its network found that another 100 would be in the red within three years given competitor trends and the shift to e-commerce.

The most forward-thinking retailers use analytical tools and techniques to reshape their entire store networks. They use financial and geospatial modeling to highlight not only where stores should be opened but also which should be closed, resized, or reformatted.

Re-invent the in-store shopping experience:

Creating the store of the future will mean overhauling the in-store customer journey, in part by using new technology to make the shopping experience as seamless and easy as possible. Some retailers simply copy the in-store moves of multichannel champions such as Apple and Burberry or equip sales staff with iPads to give their stores an updated, high-tech look. But cosmetic changes alone won’t result in lasting impact. A multichannel mind-set must be embedded in the store design and in employees’ new ways of working.

Retailers should prioritize the basics: again, focusing on what matters most to their customers and enabling multichannel shopping (for instance, by establishing fast-pickup counters for online orders) while being ruthless about taking costs out of the things that customers don’t care about.

Execute systematically across channels:

Change of this scale is not easy and affects many functions across the organization. Some retailers make the mistake of developing a store-network transformation plan that extends past 2020, by which time parts of the plan will probably be obsolete, or else they embark on a massive change program that will take so long to roll out that it will be out of date before it is halfway done. Retailers are typically better served by developing a detailed plan for the next 12 months and a high-level road map for the next three years.

Pace and flexibility are critical. “Gold plating” an entire store takes too long and tends to be expensive. Retailers should instead test new ideas quickly, and they should pilot individual aspects of store design to figure out specifically what is working and what isn’t.

Of course, capabilities and organizational design, both at headquarters and in individual stores, must evolve as the network evolves. Retailers should ask themselves: Does the organizational structure support the new network size and role? What would it take to shift the mind-sets of the property team away from a focus on opening new stores and toward making better use of existing space, introducing and refreshing store concepts quickly, and even scaling back on real estate? the store of the future should allow shoppers to move seamlessly across channels…Store staff should be well trained and comfortable in directing customers to the right products, both offline and online.

The logistics and store teams should work hand in glove with the online team to ensure that orders are fulfilled efficiently and to get products to consumers quickly….!!

“One Branding” : “Uniting the Employer, Corporate & Product Experience” | BCG

Every day, the Digital-World shines a spotlight on Brand inconsistencies…Employees & potential recruits might get one impression online, customers and partners might have another experience, while investors and influencers might see an altogether different picture…The result is brand confusion or worse : “Brand Conflict ” !!

Consumers today, led by the digitally native Millennial generation (ages 18 to 34), expect much more from brands. They increasingly require a holistic and authentic experience across all the online and offline ways they interact with a company. When we surveyed them, Millennials reported that the number one way that brands can engage them is to have an “authentic purpose.” Many consumers expect to engage more actively in a two-way dialogue with brands—and the Internet gives them a megaphone to express their positive and negative opinions loudly..

The global business environment also demands more from brands. The service sector now makes up approximately 70 percent of most developed economies, and that share is even higher when it includes the many products that have a service component. People have become a critical resource for service-based industries: labor costs are higher than capital costs in many service companies..

Likewise, people have also become an essential component of branding, a field that was once highly product oriented. Brand experiences are now largely shaped by the people on the front lines who interact daily with customers and must meet their rising expectations. Employees have become, in effect, brand ambassadors. Brand management of the future requires, therefore, even fuller and more consistent engagement among the people inside and outside the company—both those who experience the brand and those who represent it..

The problem is that companies too often focus on only one or two aspects of their brand image. Many ignore employees as brand advocates or else narrowly relegate marketing communications for employees and recruits to the human resources department. People often assume that a strong product or corporate brand alone will attract candidates and customers. To become part of its customers’ lives, however, a company’s product and brands will first have to be “lived” by its employees.

To succeed, companies today must elevate employer branding to its rightful place among the other major pillars of corporate, product, and service brand management. At the same time, they must create harmony among customer experiences with the product, the company, and employees. We call this new concept of integrated, employee-powered marketing One Branding...A tight linking of all the aspects of brand management ensures that brands leverage their most significant asset—employees—to create more powerful and relevant brands for today’s changing world. One branding also significantly boosts performance..

THE REWARDS OF ONE BRANDING:

Only the harmonization of corporate, product, and employer branding ensures that everyone involved “pays into” the one-brand account, together raising the brand’s value. We have found that, in many cases, behind this success lies strong employer branding..

Companies that have strong employer brands tend to outperform those that do not. To measure the strength of employer brands, we asked students in MBA programs to rate the attractiveness of prospective employers. A BCG analysis of 39 global companies over the ten-year period from 2003 through 2012 found a positive correlation between the strength of employer brands and the average growth in total shareholder return (TSR)..

We found that the correlation between an employer’s brand and TSR was stronger at companies with a strong employer brand than at those with average or poor ratings. Moving into the top leagues of employer branding is, therefore, worthwhile not only from an HR perspective but also for its medium- to long-term impact on company value..

Not every company must be a leader in all THREE Brand-management disciplines…But all companies must gain a basic command of each, as they discover how to differentiate themselves in the areas important to their business. Only then will they achieve more integrated and consistent brands..

The Power of Employer Branding:

Even though it has become central to how a brand is experienced, employer branding is frequently the missing ingredient in achieving the promise of one branding. Employer branding represents a company’s brand promise to the people who work there, the people who want to work there, and the people the company wants to recruit. HR leaders cite employer branding as a high priority, but not even 10 percent of prospective employees during job interviews know the key elements of an employer’s brand, according to one European survey.

To succeed in today’s complex business environment and deliver a unified experience across all the brand dimensions that are important to future success—especially through its people—every company needs to define its unique advantages for employer branding and then work hard to cultivate these differentiating factors more effectively. (See Exhibit 1.)

To discern how companies are giving employer branding an equal place inside a unified brand, we interviewed executives in the European operations of ten global companies with leading brands. In our work with companies around the world, we have found these leaders’ insights to be broadly applicable to many other regions.

Consider the success of the employer-branding campaign recently launched by the adidas Group, the world’s second-largest manufacturer of sporting goods, with €14.5 billion in sales; 50,700 employees worldwide; and a brand valued at $7.5 billion by Interbrand as of 2013.

In 1998, Matthias Malessa, chief HR officer of the adidas Group, established an HR marketing department that focused on its external presentation as an employer. “Today, employer branding is a perception index of people inside the company that projects to the outside and says, ‘Check this out. This is how it looks here. If you think it looks good, join us. If not, we’re not for you”..

For the first time, the features of the campaign were developed with employees on the basis of their experiences working for adidas. The company surveyed employees of all its brands worldwide. Five main branding messages resulted…Each country has the flexibility to highlight the message that has priority for the employees there..

“More and more young employees are demanding that their voices be heard,” says Malessa. “I ask my people, ‘How do you perceive this company?’ Then I build my employer-branding story based on what they say.” For instance, one message involves social and environmental responsibility. The motto “to make the world a better place” connects this message into a unified product-, corporate-, and employer-brand strategy..

The success factor is that employees are free to share their experiences with the adidas culture online. “In the digital age, it’s important to win over your employees as brand ambassadors, but for it to function, there also have to be rules,” says Simone Lendzian, corporate communications manager. Social-media guidelines orient employees to their rights and responsibilities when communicating as brand ambassadors during work hours..

The company had a lot of discussions about whether each brand in the adidas family—which includes Reebok and Rockport in addition to adidas—needed its own employer branding. “We believe it all has to flow into one employer brand that is all-inclusive and covers the entire company,” says Malessa..

Six Guiding Principles for One Branding:

To put one branding into practice, a company must keep in mind six overarching principles about how employer branding relates to its overall brand portfolio.

Credible positioning starts with a well-defined process. At the heart of employer branding lies a convincing employer value proposition (EVP): the promise of value that employers make to their current and future employees. The emphasis should be on the uniqueness of the company. Only with a differentiated strategy can a company achieve competitive advantage.

To ensure that the EVP is relevant and differentiating, it must be based on solid data and integrated into the overall HR strategy process. First, market research compares the internal understanding of the company’s current positioning with the motivations and needs of external target segments. This is translated into a credible brand position and concrete actions and then anchored in the company’s organization structures, roles, and responsibilities. (See Exhibit 2.)

Employee motivations guide Employer Branding – to attract and retain good people, a company must appeal to both logic and emotion. Effective employer branding uses a “double perspective” of internal and external views to discover the elements of the brand experience that drive engagement among existing and prospective employees…Qualitative and quantitative market research can identify motivations that fit the brand, whereas creative techniques can uncover even deeper insights. Rather than simply delegating market research to an outside organization, all internal and external stakeholders should be invited to speak their minds through an active dialogue with the marketing, HR, and strategy departments..

Only a brand that is lived every day can be experienced – Employer branding can be only as strong as the health of the company’s culture.A true standout is the culture of Google, the world’s largest Internet company by market capitalization, with $50.8 billion in revenues; 45,000 employees worldwide; and a brand valued at $93.3 billion by Interbrand as of 2013. “Our employer value proposition is the result of our company culture as we live and experience it,” says Frank Kohl­-Boas, Google’s head of HR in northern Europe. “As our motto says, ‘Do cool things that matter.’ I am convinced that you can recruit and retain knowledge workers only if you give them the room they need to think freely and you offer them interesting work. If you do this, candidates and employees will say, ‘I can earn money elsewhere, but where else can I be a part of things, be myself, and grow ? ’”

At Google, responsibility for employer branding resides in HR, because it is understood less as a marketing task than as the management of corporate culture. A core team, under the leadership of a chief culture officer, works with local culture ambassadors who support the topic voluntarily in addition to their core jobs. The goals are to find the right people to hire, to ensure the internal multiplication of knowledge, and to provide the freedom for product discovery and invention..

“We don’t do any big marketing campaigns—neither for recruiting nor for Google as a brand,” says Kohl­-Boas. “Instead, we invest in employees who develop the brand. We trust that a lot of people will come into contact with our products and associate the company with the quality of our products. If users like our products, the customers and shareholders will come.”

Employees are the best brand ambassadors – The most authentic sources of employer branding are employees who can communicate credibly about the company and make its culture tangible..

Consider eBay, well-known as a global leader in online retailing and payments, with $16 billion in revenues; 30,000 employees worldwide; and a brand valued at $13.2 billion by Interbrand as of 2013. At eBay, employee referrals are the most important recruiting component by far. “When you shape your employer branding out of the culture and put your people at the center of it, the advantage is that you can motivate them to channel their pride by recommending the company,” says Tobias Hübscher, eBay’s senior manager, European employee communications.

“Referral campaigns save headhunter fees and ad campaign costs and helped us get budget for employer branding and resources for talent acquisition,” he adds. “Basically, we see referrals as being a lot more effective and working better in the recruiting process.”

Social media is only one tool in the toolbox –  Despite all the hype about social-media platforms such as Facebook, YouTube, and Twitter, every channel must be closely analyzed for its benefits and risks. If a company does not have confidence that it can present itself authentically and engage in open dialogue with consumers through certain mediums, it should not use them until the advantages outweigh any potential damage.

The social-media strategy is well defined at Heineken International, the world’s third-largest brewing company, with €19.2 billion in revenues; 85,000 employees worldwide; and a brand valued at $4.3 billion by Interbrand as of 2013. “When it comes to social media, you have to know exactly what you want,” says Dario Gargiulo, global social-media manager at Heineken International. “A lot of companies do social media only because they think it’s good to have a presence everywhere. Instead, you have to use every social channel differently and with a specific aim. You must take the time to find out which channel should be used for which message.”

Gargiulo recommends focusing on the brand message and consumer attitudes on social media rather than communicating all of the company’s activities. “In social media, you immediately get consumer reactions about what’s important and what’s not,” he says. “It’s about the connection with real life.”

To integrate brand management disciplines tightly, stay loose – The players in one branding are less like a conductor-led orchestra than a leaderless jazz band. In the latter, the optimal combination of players is more important than who leads at any point in time. Well-executed examples of one branding show that there is no universal solution: although HR is often in charge—for instance, at BMW and adidas—several companies we studied maintain an ongoing, constructive conversation among the different components of branding, including marketing, communications, strategy, and HR. The corporate brand often takes the lead when the path forward is not clear.

At eBay, employer branding is jointly managed by the HR, talent acquisition, communications, and marketing departments and covers all eBay brands. Both internal employer culture and external campaigns are steered by communications in the local country unit.

Regardless of the organization design, marketing and HR must work together as equals. Each of the functions has plenty to contribute: HR has the competencies needed for strategic personnel planning and the ongoing development of company culture. And marketing can bring its “detective skills” to the table—by feeling out and establishing a unique positioning for employees and job applicants..

The era of one branding is dawning. Employer, corporate, and product branding will only grow more closely integrated..

Although we see no one-size-fits-all strategy that can address all the challenges ahead, we have observed this about the leaders: one branding works only if executives in charge of HR and the brand disciplines make it their common goal and have the courage and flexibility to work together.

Companies that are willing to cross organization boundaries and experiment with this new approach now will discover the proven benefits of one branding. Those that do not move in this direction risk falling behind their more integrated and nimble competitors..!!

How “Indian QSRs are going social ? ” | by: Nusra | Restaurant India

Indian Quick Service Restaurant (QSR) segment has seen many New Brands making inroads into the market…Indian QSR market has remained largely unaffected by the economic slowdown and touched nearly around $50 billion from Rs $35 billion in 2013. The segment is growing at a very fast pace…!!

Brands on demand:

Indian fast food majors like Cafe Coffee Day, Yo! China, Haldiram’s, Nirulas, Sagar Ratna and Bikanervala have met all the global necessities to meet the demands of the local customers, who are becoming an adaptor of global QSR outlets. Not only this, the regional QSR chains like Shiv Sagar, Bangs and Ammi’s Biryani created a milestone in competing to their foreign counterparts, but have also adapted their strategies on how to target the over growing demands of their customers..

Meanwhile, we have seen that, global players have tweaked their menu keeping in mind the taste and preferences of Indian customers. We have seen that major global QSR chains, which are entering India, have to localise their offerings before establishing themselves here..

Indian chains have now realised that people here are rushing towards convenience and value that these QSR chains offer and there is a wide gap in the market in terms of authentic Indian Cuisine being served in a quick service format and thus, they ventured into Indian QSR segment to address the local customers with its Innovative concept.

“The Usp of Hello Curry is ‘Indian Food with western quick service efficiency’, many of the QSRs present nationwide today are catering a niche with western products. Hello Curry will be unique with its positioning as the first QSR with complete range of Indian cuisine,” says P Sandeep, Co-Founder, Hello Curry..

Placing it Right :

Quick service is one of the challenges Indian QSR players are facing with Indian food, as the main preparation itself takes 15 to 20 minutes for preparing a dish. The restaurants have to innovate on processes and technology to develop ways to serve a customer flat in 2 minutes across the counter or 30 minutes in case of a home delivery.

After years of learning from global players, Indian QSRs are now quick to adapt to social media. They are now trying their hands at cracking the social recipe to success by posting new recipes on Facebook and Twitter or promoting it through Instagram and they are becoming quite close to cracking the code of the social marketing strategy which entered India via global route.

“As we are all young entrepreneurs, we are from the tech world of today. Hence, social media is one of the biggest assets of marketing. We are available on Facebook, Instagram, Zomato and we are connecting our consumers through WhatsApp. We are also doing PR and media activities, but I am not in the mainline PR advertising because I believe that word-of mouth is the best tool for advertising, where food works as a marketing tool itself,” says Sachet Shah, Go Panda (one of the partner).

While many international chains have set its footprint across the country, the Indian home grown chains have fought bravely to catch up with them. Cafe Coffe Day, Yo! China and Haldiram’s have set the traditional scene in India and are also leveraging social media by rightly placing themselves in the social gathering.

“There are many reasons for the success of our restaurant. But the major reason is that we operate in the Chinese food segment, which is the most desired cuisine among youth as they are the main consumers today. When we talk about eating out trend, I think we are operating in a segment which is massively catering to the youth. We create fun at our restaurant, we are value for money restaurant, our restaurants are trendy, we offer innovation and are present at the right location. The strategies help us gain an edge over others. We are here for 11 years building brand because brand brings consistency and the ability to stay requires time,” shares Ashish, MD & Co-Founder, Yo! China.

Thus, we can say that the growing trend in the QSR segment is becoming more of a social engagement rather than restaurants coming up with new products and keeping it to their specific target group…!! 

The “State of Strategy Today” : Good strategy is worth doing well | A.T. Kearney

In a study performed, we found a strong correlation between a company’s total shareholder returns (TSR) and its planning horizon…Those with longer horizons saw stronger returns than those with shorter…!!

We were not surprised then when our latest strategy study found a similar correlation. Only this time, the comparisons are between successful and unsuccessful strategies. Of companies with longer strategy cycles—five years or more—85 percent see beneficial results. For companies whose strategy cycles are less than five years, 53 percent are successful. Interestingly, there is little difference between companies that take an ad-hoc approach to strategy (46 percent) and those with planned strategy cycles of less than five years (47 percent)…

This last point is reassuring, as it suggests that a properly executed strategy is worth pursuing. Just 6 percent of companies have strategy cycles of more than 5 years. It can be argued that strategy cycles are more important in today’s competitive environment or, as one study participant says, “To succeed today, we need to innovate, and innovation requires strategy and commitment. So it makes sense that committing to a strategy over time results in success over time”…

Strategy is more difficult now..When working on consulting engagements, our clients sometimes complain that it’s much harder now to craft powerful and easy-to-communicate strategies. “Strategy formulation and deployment is a complex, moving target,” explains one CEO. Another blames the difficulties on what she calls “an ever-changing business environment that requires spending more resources on strategy.” Our study findings reflect the same frustrations: 62 percent of business executives say strategy has become more complicated over the past decade, and 74 percent say complexity forces them to spend more time and effort on strategy formulation. Yet, despite these increased efforts, 46 percent of strategies fail to meet expectations..

Interestingly, C-suite executives are much more optimistic about the effectiveness of their companies’ strategies than those in management…Indeed, 81 percent of executives believe their strategies are meeting or exceeding expectations, while 48 percent of those at the management level are less optimistic (see figure 3). Further, this C-Suite misconception is even greater for companies that are lagging their peers as almost 100 percent of executives believe their strategies are working just fine, while management is much more skeptical..

Agility to the rescue – maybe It is commonly accepted that today’s business environments are fast changing and dynamic, and much more so than just a few decades ago. These tumultuous conditions have caused some executives to question whether strategy is even possible anymore. Isn’t a strategy outdated before it can be implemented? Aren’t we better off to focus on agility in order to capitalize on emerging trends faster than peers? These are some of the questions we heard. We put this thinking to the test with surprising results: More than 80 percent of global executives consider agility as important, or more important, than strategy when it comes to securing a company’s future success. And only a slim 19 percent believe a strategy-induced competitive advantage is still possible (see figure 4). In the minds of business leaders, it appears that strategy is failing…

However, a deeper dive into the survey data finds that “agility as a substitute for strategy” notion is flawed. We wonder if it isn’t simply a self-fulfilling prophesy :  Those who believe agility is the foundation for success have failing strategies, while those who believe strategy is a source of competitive advantage, have exceptionally successful strategies. The more interesting question, which begs further investigation, is in which direction the causality flows: Do companies have trouble formulating and deploying strategies and so turn to agility? Or, does a focus on agility as the answer to today’s challenges lead to the demise of strategy? Does a string of successful strategies mean strategy is the answer to all that ails an organization ??

What’s to blame for strategy failure?

Judging by the responses of our study participants, strategy failure is an emotional topic. One participant puts it this way : “In large organizations, strategy formulation is too complex and too top-down, leaving the rest of the organization to play catch up. And before they can do so, the next strategy is being rolled out.” Another says: “Strategic planning often takes place in an ivory tower by individuals who haven’t a clue what happens at the implementation level.” These and other comments suggest that the interface—the handover—between strategy formulation and deployment is to blame for failed strategies. Our findings confirm this. When asked to identify the trigger of a failed strategy, 7 percent of executives point to formulation, 6 percent point to deployment, and 86 percent say it is a mix of the two (see figure 5)..

Strategy formulation: What goes wrong?

If there is ever a need for knowledge, experience, and preparation, it is during strategy formulation. When asked about their strategy formulation failures, most executives complain that it is an insufficiently inspired, unrealistic, impractical, and detached process :

• Lack of understanding of future trends (88%)
• Little understanding of internal capabilities (87%)
• Too much top-down approach (84%)
• Not enough logical thinking (84%)

One interesting finding is the conflicting perspectives about the role data analysis plays in a failed strategy formulation process. Some blame “too much data analyses” while others say there is “not enough data analyses.” The reasons for the different views depends on the participants’ backgrounds. For example, many in the too-much-data group have firsthand experience in data analyses of the “boiling the ocean” type—in which substantial efforts yield few real insights. The other group is accustomed to formulating strategy using strategy statements that are not backed by sound financial justification or based on quantifiable competitive opportunities..

Several study participants consider secrecy an issue…“The C-suite is afraid competitors will learn our strategy and so do not involve middle-level managers as much as they should in developing the strategy,” explains a manager. “Clearly, keeping our organization as much in the dark as our competitors about our strategy is not a fast lane to success”..

Strategy deployment: What goes wrong?

Many of the reasons for failed strategy formulation are also attributed to failed deployments. For example, a strategy might be too ambitious and broad for the organization, too narrow to cope with the full breadth of changing market conditions, or deployed from an impractical top-down perspective. “Strategy deployment is now our greatest challenge,” explains a CEO. “Market conditions require a more aggressive strategy, but execution has not changed.”

Not surprisingly, reasons for failed deployments have more to do with the handover between strategy formulation and deployment:

• Lack of internal understanding of the strategy (90%)
• Lack of internal capabilities to execute the strategy (90%)
• Lack of ownership (86%)

This makes for bewildered, disenfranchised, overwhelmed, and under-supported deployments. As one manager admits, “We underestimate the combined effects of overlapping initiatives on the same group of people”..

Gauging the future –

Study participants largely agree that a better understanding of future trends is a prerequisite for sound strategy formulation: “Our strategies fail at the development stage because we do not accurately determine where the market is heading in the next three to five years.”

Not surprisingly, over the last decade many companies have increased use of future-focused tools such as fore-sighting, trend analyses, and scenario planning (see figure 6)..

Organizational inclusiveness –

Involving the organization in strategy formulation resolves the handover issue between formulation and deployment. “Strategy that doesn’t make it out of the boardroom isn’t really strategy,” admits an executive. “Attempting to make it purely process-driven overlooks the importance of the ‘goodwill’ factor—the people who actually deploy the strategy because they buy into it, and not just because it is their job to deliver it.” Our findings break down this thinking into a number of distinct points. At the base, is the conviction that involving more people with firsthand experience in dealing with markets, customers, competitors, processes, and suppliers makes for better and more practical strategies.

“Bringing in a general workforce opinion helps management make more informed decisions,” says a manager. “All levels of the organization can contribute to strategy formulation and implementation. Middle management and the workforce provide practical input.” Organizational involvement is also essential for making strategies sufficiently ambitious. As one executive says, “The most important area for innovation in achieving goals and targets are the skills and knowledge of staff. Without these, the top-down approach is doomed to mediocrity.”

Our findings back up these observations : Two thirds of companies that pursue meaningful organizational inclusion in strategy formulation have successful strategies. Yet, involving the workforce doesn’t just make strategies better and more practical, it also lays the groundwork for engaging the right people in strategy deployment: “We involve our people at all levels in strategy development and find that innovation and diversity of ideas are pluses, both in adopting change and in people acting as change agents. An engaged individual is more resourceful than one who is simply employed.”

Organizational involvement is not a panacea. It provides innovation and practicality and, while it does not really affect speed, it does make things more complex (see figure 7). As one CEO says: “Consultation can be a bit of a pain and slow down a good planning operation, but the results following the consultation can make the extra time well worth it”..

Strategy needs to be led- 

not just decided on Despite the virtues of organizationally inclusive strategy formulation, the complexity that accompanies it can be an issue. For this reason, inclusive strategy requires top-down leadership, with top management establishing the ideas, ground rules, organizational teams, and direction that are critical for middle and lower management. Strategy, at its best, becomes less of a decision and more of a direction to inspire the organization to follow—not once, but on an ongoing basis.

As one CEO says : “Strategy & Leadership go hand-in-hand, you can’t have one without the other”…!!

The “Four Pillars” of “Blue Ocean Leadership” | INSEAD

To unleash employees’ untapped talent and energy, leaders need a strong repertoire of actions, not just better awareness and empathy…!!

Most leadership programmes are generally designed to hone the cognitive and behavioural skills of leaders with the implicit assumption that this would ultimately translate into high performance. Leaders are accordingly called on to develop traits like self-awareness, self-regulation, and empathy, for example, all of which require deep self-reflection and introspection to assimilate into a person’s being.

While cultivating such values are important, when we asked people to look back on these programmes, most reported not seeing a marked change in leadership caliber..

As one executive put it, “Without years of dedicated efforts, how can you transform a person’s character or behavioural traits? And can you really measure and assess if leaders are embracing and internalising these personal traits and styles? In theory yes, but in reality it’s hard at best.” In the end, millions of dollars were often spent, excitement was initially generated, but real leadership change did not set in..

Pillar One: Focus on acts and activities.

Blue ocean leadership, in contrast, is action-based, just as strategy is. It focuses on what acts and activities leaders need to do to provide a leap in motivation and business results driven by people, not on who they need to be. It’s the difference between being asked to be motivating versus being asked to provide those you lead with real-time feedback and best practice lessons that internally motivate and guide those you lead to up their game while feeling valued. The summation of these acts and activities is the leadership equivalent of a company’s strategic profile only here the aim is the development of a compelling leadership profile grounded in actions that are easy to observe, measure, and are directly linked to performance. This difference in emphasis has an important consequence for the time and resources needed to bring about a change for high performance. It is markedly easier to change a person’s acts and activities, than their values, qualities, or behaviours.

Of course, changing a leader’s activities is not a complete solution, and having the right values, behaviours, and qualities is important. But changing acts and activities is something that any individual can do, given the right feedback and guidance..

Pillar Two: Connect leadership to market realities by engaging people who confront them.

We observed that the leadership approaches employed by organisations are often generic and detached from what firms stand for in the eyes of customers and the market results employees are expected to achieve. At one insurance company, for example, call center personnel were tasked with fulfilling customer claims rapidly, while their frontline leaders maintained a hands-off approach to getting the claims department to cut checks rapidly.  Call center personnel rightly felt set up to fail, hugely demotivated, and let down by their leaders.

Blue ocean leadership, in contrast, focuses on what makes effective leaders, not in a vacuum but in light of the market realities their organisations confront and their direct reports must deliver on. Blue ocean leadership does not subscribe to a generic approach of common leadership acts and activities much as strategy does not subscribe to the same strategic profile across organisations. Instead people who face market realities are asked for their direct input regarding what acts and activities their leaders do that hold them back and what they need from their leaders but aren’t currently receiving to be their best and effectively serve customers and key stakeholders. When people are asked to help define the leadership acts and activities that will make them thrive and are connected to the market realities against which they need to perform, people get the type of leadership they and their organisation need and are highly motivated to share their energy and perform to the best of their abilities. As one employee put it, “I am under constant pressure to produce market results. I need the decisions and actions of my boss to support me to succeed in achieving market results. Currently there is a disconnect here.”

Pillar Three: Distribute leadership across different management levels.

While the market realities that organisations face today demand that there should be leaders at every level, the majority of leadership programmes we observed still remained largely focused on the top. But the key to a successful organisation is having empowered leaders at every level. It’s an illusion to expect or rely on top management on its own to deliver high performance especially as outstanding service all too often comes down to the motivation and actions of frontline leaders who are often in closest contact with the market. Executives need to push responsibility down in the organisation so that people on the frontline can deliver world-class service. Organisations need to develop effective leaders deep in their organisation by distributing leadership across different management levels, but that was often not the case.

Blue ocean leadership addresses this need by focusing on distributed leadership, not top leadership. By distributed leadership we refer to leadership distributed at the senior, middle, and frontline levels. Blue ocean leadership sees leadership as needed at all three levels to unlock the ocean of unemployed talent and energy that stretches deep into organisations. It also understands that these three levels are different enough from one another. Each requires a different leadership profile to be effective since each has a different positional power, task environment as well as focus on and interaction with the external environment. The factors that define good leadership are derived by the acts and activities leaders need to take at each level to create a leap in value for both employees and customers. In this way, blue ocean leadership, like blue ocean strategy, is about creating a nonzero-sum, win-win outcome. As we’ve heard repeatedly, “Almost everyone leads someone, not just the top. But when it comes to leadership, we focus on the top. The truth is 90% of our people don’t even have contact with them so how is their greatness supposed to transform our organisation? We need effective leaders at every level.”

Pillar Four: Pursue high impact leadership acts and activities at low cost.

Leadership practices are all too often seen and treated as something added on to people’s regular work. But with secretaries and administrative staff in most organisations already cut back to the bare minimum and the market reality intense, most leaders’ plates are already full. Finding the time to do one’s regular job is tough enough, let alone attempting to up one’s game. So a step-change in leadership strength rarely occurs. Time is just not enough.

Blue ocean leadership recognises this. It breaks the trade-off between impact and cost by focusing as much on what acts and activities leaders need to eliminate and reduce in what they do as on what they need to raise and create to unlock the ocean of unemployed talent and energy to drive high performance. In the context of leadership, high impact refers to achieving high motivation and engagement of people to drive business results while low cost refers to a lower investment of time by leaders, which is their most expensive and limited resource.

Our research has found that many of the acts and activities that take up leaders’ time actually work against them being effective and can even be resented by those below them, not appreciated by those above them, and are an energy sapper for the leaders themselves. By expressly eliminating and reducing these acts and activities, leaders’ time is freed to focus on new acts and activities that make a real impact on leading and producing business results driven by people. Without freeing up leaders’ time in this way, it is often no more than wishful thinking that leaders will have the time to up their game..

Conventional Leadership Development Appoaches	Blue Ocean Leadership
Focus on the values, qualities and behavioural styles that make for good leadership under the assumption that these ultimately translate into high performance.	Focus on what acts and activities leaders need to undertake to boost their teams’ motivation and business results, not on who leaders need to be.
Tend to be quite generic and are often detached from what organizations stand for in the eyes of their customers and the market results their people are expected to achieve.	Connect leaders’ actions closely to market realities by having the people who face market realities define what leadership practices hold them back and what leadership actions would enable them to thrive and best serve customers and other key stakeholders.
Focus mostly on the executive and senior levels of organizations.	Distribute leadership across all three management levels because outstanding organizational performance often comes down to the motivation and actions of middle and frontline leaders who are in closer contact with the market.
Invest extra time for leadership practices added on to people’s regular work.	Pursue high impact leadership acts and activities at low cost by focusing as much on what leaders need to eliminate and reduce in what they do as on what they need to raise and create.

To put blue ocean leadership in action, we adapt the analytic tools and frameworks of blue ocean strategy to the leadership context. The result is the Leadership Canvas, the Leadership Profile and the Blue Ocean Leadership Grid all of which are grounded in acts and activities, easy to understand and communicate and that engage more people in an organization…The tools and methodology point is very important…

Without that it is very hard for research to do more than inform but practically address the challenges of leadership development for high performance…!!

“11 Leadership Lessons” from “Alexander the Great” | by: Manfred Kets De Vries | INSEAD

Visionary, Team-Builder, Mentor, he shows us some timeless Leadership-Lessons but also some Glaring Failures…!!

Although the “Great Man” Leadership theory belongs to the scrapheap of history, its allure continues to mystify…Underlying this theory is the assumption that if the right man (yes, it is often assumed to be a man) for the job emerges, he will almost magically take control of a situation and lead a group of people into safety or success. While such leaders are rare, there are times when a singular individual steps out from the crowd and serves as a paragon of leadership.

One such individual was Alexander the Great; one of history’s most famous warriors and a legend of almost divine status in his own lifetime. He falls into the elite category of individuals who changed the history of civilisation and shaped the present world as we know it.

From a Leadership perspective, it’s not very difficult to say that Alexander was without peer…He could be magnanimous toward defeated enemies and extremely loyal toward his friends. As a general, he led by example, leading from the front…!

Alexander’s reign illustrates a number of important leadership lessons which remain applicable to business and political chiefs today:

1. Have a compelling vision – Alexander’s actions demonstrate what can be accomplished when a person is totally focused—when he or she has clarity coupled with a ‘magnificent obsession’. Through dramatic gestures and great rhetorical skills, Alexander spoke to the collective imagination of his people and won the commitment of his followers..

2. Be unsurpassed in execution – Alexander not only had a compelling vision, he also knew how to make that vision become reality. By maintaining an excellent information system, he was able to interpret his opponent’s motives and was a master at coordinating all parts of his military machine. No other military leader before him ever used speed and surprise with such dexterity. He knew the true value of the statement “One is either quick or one is dead ” !!

3. Create a well-rounded Executive Team – Alexander also knew how to build a committed team around him and operated in a way that allowed his commanders to build on each other’s’ strengths..

4. Walk the talk – Alexander set the example of excellence with his leadership style; he led his troops quite literally from the front. When his troops went hungry or thirsty, he went hungry and thirsty; when their horses died beneath them and they had to walk, he did the same. This accessibility only changed when he succumbed to the luxury of Persian court life..

5. Encourage “Innovation” – Alexander realised the competitive advantage of strategic innovation. Because of his deft deployment of troops, his support for and reliance on the creativity of his corps of engineers, and his own logistical acumen, his war machine was the most advanced of its time..

6. Foster Group Identification – Alexander created a very astute propaganda machine to keep his people engaged. His oratory skills, based on the simple language of his soldiers, had a hypnotic influence on all who heard him. He made extensive use of powerful cultural symbols which elicited strong emotions. These ‘meaning-management’ actions, combined with his talent for leading by example, fostered strong group identification among his troops, and motivated his men to make exceptional efforts..

7. Encourage and Support Followers – Alexander knew how to encourage his people for their excellence in battle in ways that brought out greater excellence. He routinely singled people out for special attention and recalled acts of bravery performed by former and fallen heroes, making it clear that individual contributions would be recognised. He also had the ability to be a ‘container’ of the emotions of his people through empathetic listening.

8. Invest in Talent Management – Extremely visionary for his time, Alexander spent an extraordinary amount of resources on training and development. He not only trained his present troops but also looked to the future by developing the next generation.

9. Consolidate Gains – Paradoxically, three of Alexander’s most valuable lessons were taught not through his strengths but through his weaknesses. The first of these is the need to consolidate gains. Alexander failed to put the right control systems in place to integrate his empire and thus never really savoured the fruit of his accomplishments. Conquest may be richly rewarding, but a leader who advances without ensuring the stability of his or her gains stands to lose everything..

10. Succession Planning – Another lesson Alexander taught by omission is the need for a viable succession plan. He was so focused on his own role as king and aspiring deity that he could not bring himself to think of the future when he was gone. As a result, political vultures tore his vast empire apart after his death.

11. Create Mechanisms of Organisational Governance – The final lesson that the case of Alexander illustrates (again by omission) is the paramount importance of countervailing powers. Leaders have the responsibility to put proper mechanisms of organisational governance into place, using checks and balances to prevent faulty decision-making and the abuse of power.

Alexander began his reign as an enlightened ruler, encouraging participation by his ‘companions’—Loyal soldiers drawn from the noble families in Macedonia. But like many rulers before him, he became addicted to power. Hubris raised its ugly head. As time passed, Alexander’s behaviour became increasingly domineering and grandiose…

He tolerated nothing but applause from his audience, so his immediate circle kept their reservations to themselves. As a result he lost touch with reality, another factor leading to his failure to consolidate his empire…!!

“Global Luxury Brands” : Why India matters ? | by: Sapna Agarwal | Livemint

A look at the issues related to the potential of the ” Indian Luxury Market “, estimated to be worth $14 billion a year..!! 

A large and growing middle class in India is not only buying luxury goods and services but, inevitably in an Emerging Market the size of India, is also redefining the luxury market..

There’s an image of India—one that has persisted despite being a cliche—that is contoured by contrasts: Maharajas on the one hand, in full regalia and motorcades of Rolls Royce limousines, and poverty and hunger on the other. As India of the 21st century aspires to rank among global manufacturers and service providers, the luxury that once defined the Maharajas is a matter of widening aspiration, too..

The national airline—whose mascot was the Maharaja—no longer carries just the privileged few to the Swiss Alps and other luxury holiday destinations. A large and growing middle class in India is not only buying luxury goods and services but, inevitably in an emerging market the size of India, is also redefining the luxury market. But while India tops the list of tomorrow’s markets, it is yet to make it to the top in the priority markets list of luxury marketers..

What will it take for luxury marketers to tap into India? And what will it take for India to realize its luxury potential to the maximum? Experts and marketers gathered at a two-day Mint Luxury Conference in Mumbai on 31 October and 1 November to discuss some of these issues and challenges. Firstly, the definition of the Indian luxury consumer needs to change—start with banishing that cliched image of the Maharaja. “Luxury cannot be limited to just the very top or 0.01% of the population,” says Abheek Singhi, senior partner and director, Asia-Pacific leader-consumer and retail practice at consulting firm The Boston Consulting Group.

He estimates the Indian luxury market to be worth $14 billion. But for a country with a population of 1.2 billion, there are just 117,000 people who are classed as ultra-rich—people who have family wealth of over Rs.25 crore or earn Rs.3-4 crore a year, says a July report by Kotak Wealth Management. This segment of consumers prefers to do their luxury shopping abroad. In the local context, luxury denotes brands that globally are a notch lower than the finest, appealing to a wider audience of the top 1%, 5% or even 15% who have the aspirations and the money to buy them, said Singhi..

To grow the luxury market, “marketers selling in India need to be innovative and reach out to new consumers”, says Sanjay Kapoor, managing director of Genesis Colors Pvt. Ltd, parent of Genesis Luxury Fashion Pvt. Ltd whose portfolio includes brands such as Bottega Veneta, Burberry and Canali. According to Kapoor, luxury marketers need to continually “upgrade” consumers used to buying premium to luxury goods and services. “It’s a continuous process of educating people about brands to grow the existing business,” says Kapoor. Adding new brands and opening new stores is the business part of the same process..

There are FIVE Luxury Consumer Segments emerging in India, says Singhi : Classpirationals, who want to blend in with the classes; Fashionistas, or Trendsetters; Experiencers who love travelling, wine tasting, etc.; Absolute Luxurers for whom luxury is about exclusivity and customization; and Megacitiers—part of the global elite..

As such, the Indian luxury consumer is spread across the metros, tier-I and tier-II cities. “Close to 40% of the Indian luxury consumers are living outside of metros and shop on their travel overseas or in the metros,” says Singhi..

Firms seeking to expand in India speak of infrastructure challenges. For instance, India got it’s first luxury mall—DLF Emporio—in south Delhi in 2007. Now, there are just two more luxury malls in the country. “The biggest impediment to the development of the luxury market is the lack of infrastructure and an environment,” says Rahul Prasad, managing director (Asia-Pacific and Middle East), Pike Preston Partners Ltd, a boutique advisory firm on mergers and acquisitions in the fashion and luxury segments..

Meanwhile, with the new National Democratic Alliance (NDA) government in India, businesses are hopeful regulatory hurdles will be resolved. “The new government’s approach has energized a number of companies, including multi-brand retailers and international retailers..,” says Pierre Mallevays, founder and managing partner of Savigny Partners LLP, a corporate finance advisory firm focusing on the retail and luxury goods industry..

At the Mint Luxury summit, Nirmala Sitharaman, commerce and industry minister, agreed to look into the requirement of 30% sourcing from domestic companies for single-brand foreign retailers who are allowed to invest 100%..

The challenges remain daunting. According to Armando Branchini, vice-chairman of the Altagamma foundation, a conglomerate of several high-end Italian companies, there are 17 Italian luxury brands in India at the moment, a number that has remained unchanged since 2005..

British luxury brands are focusing their efforts in other markets such as China, says Charlotte Keesing, director at Walpole British Luxury, a consortium of British luxury retailers like Jimmy Choo, Harrods and Burberry. Eight years ago, India and China both were on the long-term radar of luxury product marketers..

Today, China has become one of the biggest growth drivers of such products, and India is yet to take off…“ There are only 18 of 90 British luxury retailers present in India today and less than a dozen are looking at entering the market in the next two years,” said Keesing…