“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..!!

“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…

“Mall Management” – The “New Success Mantra” for Malls In India | Realty Plus

The Indian #RetailMarket, has gone through a prolonged (and sometimes painful) process of transformation…With rapid development across the country, India has witnessed the emergence of a well-entrenched mall culture over the past decade….However, there are several malls in the country which are faring less than well…

Failing Malls – A Growing Problem :

The not insignificant number of under-performing malls in the country definitely gives rise to concern…There is no dearth of instances where #MallDevelopers, have scrapped the entire blueprint and business model and converted their malls into office spaces. The reasons for the lack of success of these malls vary..

Some of the challenges that the developers of these malls have not been able to address are providing for adequate parking and scientific people movement within the malls, coming up with a dynamic plan for upgrading facilities, attracting a suitable tenant mix and proper positioning..

Success Ingredients : 

There is now a distinct need for mall developers to introspect on the factors that contribute to either the success or failure of a mall. For instance, there is an increasing awareness among mall developers that leasing mall spaces as opposed to selling them is the way to go. Malls in which spaces are individually sold (or ‘strata sold’) tend to suffer from the absence of proper mall management – which is now the acknowledged fulcrum for success, regardless of how large or well-conceived the mall is.

There are basic parameters that mall developers must keep in mind at the very conception and design stage of their malls. Location is, of course, a vital ingredient for the success of any mall. Approach and accessibility, especially in terms of proximity to the key centres and ingress and egress of the mall, are equally important..

The mall must have adequate facilities and provide retailers with good accessibility to their stores, space for storage and staff utilities. Very importantly, it must get the parking equation right…

Untangling the Parking Knot :

A mall that does not provide sufficient and properly planned parking in India is headed for disaster. In India, the issue of parking is a challenge to both mall owners and customers. Creating parking facilities when the cost of land is high is a very capital-intensive decision for a mall developer. This is especially true if such measures are attempted to be enhanced in retrospect. As a general guideline, developer must provide parking while keeping the size of the mall in mind. The decision on how much is needed and how much is sufficient is a critical one.

Rotation of parking slots is another important function, as malls experience more footfalls on weekends, during which customers spend more time in malls. Parking must not become an issue in high traffic periods. If a mall cannot provide enough conventional parking, it must have innovative parking facilities such as multi-level and/or automated parking systems.

Since convenience is of prime importance in a mall, the access and exits to car parking is yet another factor besides the parking area itself. The more successful malls even provide valet service to attract more patrons by providing them with more ease of access.

While the future may bring malls that have public transport connectivity, we are not quite there yet. Metros and buses connecting directly to malls can bring down the usage of personal cars, and play a major role in be dealing with challenges such as parking and increased traffic. Until then, mall developers are constrained upon to make the most of existing infrastructure.

The Mall Management Solution :

The baseline philosophy behind the creation of any mall is that it must be a place that continually attracts people into its premises, keeping them engaged and tempting them to stay for longer periods. This cannot be done just by providing a massive number of shops. Today, Indian mall visitors expect various entertainment options and engagement mechanisms, as well. Malls cannot be just shopping complexes – they must be one-stop family destinations. If they fail at this, they invariably fail completely..

With these and other reasons why malls can potentially become under-productive and sub-optimal, mall developers are now discovering that professional mall management can be a catch-all solution. In fact, one of the most common causes for the failure of malls is that they were are not professionally managed and promoted. High-grade mall management is the single-most reason why some malls have managed to perform well even during the worst periods of economic distress..

Professional mall management is about a lot more than just keeping up the facilities in a #ShoppingCentre…It is about strategizing and implementing success formulae that have been specifically tailored to the mall. Often, a professional mall management firm can undo a significant amount of ‘done damage’ by reinventing the mall’s positioning, facilities and operations almost from the ground up..

Significantly, a mall management agency can result in operating costs reducing by between 5-7% in an up-and-running mall, and by up to 10% if it is engaged at the very inception stage. However, the cost-saving element is just one side of the story. With the implementation of professional mall management, even a languishing mall can be realigned into a destination that provides the needed success ingredients – and an overall ‘experience’ for customer..

A #MallManagement Agency can Re-engineer the shopping complex’ parking arrangements, tenant mix and internal customer traffic, and also assume the responsibility of promotional activities. Simultaneously, such an agency will ensure optimal staffing solutions and keep all facilities within the mall running flawlessly..

Not surprisingly, more and more Indian mall developers are now adopting the mall management mantra as a one-stop solution to ensure that their investments reap the best possible returns for them…!!

“FIVE Revolutions”, That Will “Shape the Future of Your Company” | Chief Executive

Everyone knows change is coming….But underestimating the speed and impact of these changes will be the downfall of many businesses large and small in the coming years…!!

The press is full of trendy terms—Big Data, the Internet of Things, Digital Natives, Globalization, Social Media, etc.—that attempt to describe the complex technological and social changes that the world is currently experiencing. However, there is a danger in reducing complex social dynamics down to a few catchy buzzwords—trendy terms can act as intellectual shortcuts that fool people into thinking they understand these ideas when they really don’t..

In a world of constant disruption and uncertainty, however, CEOs who truly understand the key forces behind these changes will be in a better position to adapt and survive…Looking ahead, there are several horizon-level revolutions that business leaders should be aware of, because they are about to be felt with a force that is difficult to overstate..

Revolution #1: The End of the Information Age:

Many people think we are still in the Information Age, but the truth is that we are leaving the Information Age behind and entering a new stage of human development fueled by global inter-connectedness and rapidly improving technologies of all kinds. The exponential growth and convergence of so many new technologies—combined with a growing population of tech- and media-savvy consumers—will usher in a revolutionary era of social change, the likes of which humanity has never seen before. In the future, companies will need to find ways to protect themselves from the inevitable disruptions that such changes will bring, while simultaneously recognizing the advantages and opportunities..

Revolution #2: The Shift From Institutional to Individual:

One of the biggest power shifts of the 20th century was the shift from institutional power to individual power, and that isn’t going to stop. The Internet empowered individuals to communicate with anyone in the world, and now populations armed with nothing but cell phones are bringing down entire governments. Furthermore, institutions in all areas of life—education, health care, religion, media, business—are being forced to change simply because people now have more ability than ever to organize, mobilize, innovate, disrupt and demand..

Brands, too, have gone from being purely institutional inventions to personal expressions of almost any kind. For businesses, continuing empowerment of individual customers means that the dynamics of the business/customer relationship are evolving. Customers will continue to demand more transparency, integrity and responsiveness from those they choose to do business with—and businesses will have little choice but to comply. Smart businesses will initiate the inevitable rather than wait to be pushed..

Revolution #3: Artificial Intelligence Becomes Less Artificial:

Creativity and imagination are often thought of as the one realm that computers can never conquer, because the inner workings of the mind are what make humans unique. But it is already possible to control a computer with our thoughts alone, and commercials for IBM’s Watson computer are now touting its ability to generate ideas—helping chefs develop original recipes, for instance—using data to spark creative inspiration.

As artificial intelligence continues to evolve and improve—powered by the combination of Big Data, the Internet of Things, and always-connected devices tied to people’s location and activities (e.g., the Apple Watch)—it will begin to behave more and more like a giant alternative brain, one that rivals and surpasses humans in many ways. Machines already do most jobs that involve repetitive motion. When machines start replacing people who use their imagination for a living—writers, designers, architects, engineers, teachers, etc.—they won’t just be taking better jobs, they’ll be challenging what it means to be human.

This shift will create a great deal of psychological stress, generating a massive need for goods and services that will help them adjust to this strange new reality. Brands that can help people ride the wave of change to a brighter future, or help people cope and adapt, will be in high demand—as will brands that affirm human values and identity..

Revolution #4: Rise of the Digital Natives:

Much has been written about the impact of millennials (those born between 1981 and 1997) on the workforce, but the next wave of workers and consumers entering the workforce will be the digital natives (those born after 1997). Digital Natives are the first generation in human history to be born into the world of hyper-connected information overload…However, since they’ve been connected since birth, digital natives do not experience the flood of information hurling at them as anything more than just “the way things are,” and always have been—for them..

At the moment, millennials are assuming positions of power in all walks of life, and their impact on everything from viral memes, infotainment, social media, spheres of influence and cross-platform content has been profound. But when digital natives start adding their ideas and influence into the mix, the pace of change will accelerate even faster. This acceleration will feel to older generations like constant chaos and disruption, but to digital natives, it will simply be business as usual..

Revolution #5: From Selling to Sharing:

Since millennials and digital natives have been aggressively marketed to their entire lives, they are also extremely savvy about the media they consume. Direct, blatant pitches don’t work on them. They hate being sold to, and to them, commercials are just the things you fast-forward through to get back to the program. Also, since they are wary of institutions, they are much more likely to trust the opinion of a friend than anyone else, hence the rise of social media as a powerful marketing tool.

In the future, selling is going to be less about persuasion and more about participation…Brands that position themselves as a trusted “friend” have a much better chance of succeeding in this environment…

That’s not a new idea; the key is truly being worthy of the customer’s trust. For example, Whole Foods knows that its customers care about the ecological, political, and social impact of the food they consume…To help make that information more readily available to its customers, the company is investing in IT infrastructure to support its vision of total product transparency—a move it hopes will inspire the sort of trust and loyalty all companies are looking for in the 21st century…!!

“The Retail-Revival” : Succeeding with a “Store-Led Strategy” | BCG

A Store-Level Focus Can Transform Retail Chains Faster and Yield real results..!!

A bottom-up approach is entirely appropriate for retailers that find themselves struggling to make meaningful performance gains. Unlike what’s typical in many other industries, symptoms of sub-par performance in retail are readily detectible by both retail experts and customers, and those customers are able to provide immediate feedback..

Of course, #RetailTransformation is not simply a matter of “walking the store floor”…Although the physical demonstration of engagement is important, it is insufficient to effect lasting change…BCG has found that big performance gains are possible when executives are ready and willing to drive an integrated store-first change program that fits within the existing business model: that is, there are no additional capex requirements and no major changes to infrastructure…

Significant Results Within Months :

The results can be impressive. In BCG’s work with retailers worldwide, we have seen noticeable increases in store traffic that have, in just a few months, translated into a 5 percent lift in like-for-like sales and consistent profitability. Customers will almost certainly see cleaner and tidier stores with neat, well-stocked shelves, up-to-date price tags, fresher fruit and vegetables, and cheerier, more helpful employees..

Such results can be seen in a large Asian retail chain that successfully piloted and rolled out new operating practices. Guided by a store-led initiative, the chain boosted sales per square foot by more than 14 percent inside nine months, and it showed a profit for the first time in five years. We have observed comparable results in Europe and North America. One large European grocer gained a full percentage point in market share in its hotly contested market within six months..

The essence of such change initiatives lies in the deliberate, choreographed coordination of three concepts that previously had been used only selectively, in isolation, or outside the framework of a sustainable, system-wide change effort..

Anchoring the effort is the “Transformation SWAT team”—a carefully selected group whose job is to lead and embed sustainable change. Unlike typical change-management teams, these SWAT teams include high-potential middle managers who have a deep understanding of commercial and operational realities..

The second element is “stores of learning”—a small selection of representative stores that serve as centers of excellence. The goal is to rapidly pilot new operational and commercial practices, provide a visual look-and-feel trigger point to improve team culture, and to educate, inform, and excite senior store operators. The third element is fast rollout across the chain, spearheaded by the store operators themselves..

We’ll examine each of those transformation levers after a brief look at the context of retail challenges today…

Inverting the Business Pyramid :

Successful retail leaders are all “fluent in floor.” They can discuss, with authority, stockout rates in each store. They have a good sense of how customers are helped in stores. They’re likely to have ridden in a supplier’s truck, so they’ve seen how products are sorted, packed, and loaded at the distribution center—and how efficiently products are unloaded, unpacked and stocked at the stores..

That kind of store-led approach is needed to resuscitate grocery and mass-retail chains whose performance is sagging and that face tough online competition and upstart specialists. Yes, top-down approaches are entirely appropriate for macrostructure decisions—how many stores are needed in the region, say—but increasingly, executives need to be directly in touch with employees and shoppers. They need to see stockouts and untidy shelves for themselves and to understand the root causes of those problems. Put simply: it’s necessary to turn the traditional business pyramid on its end. (See Exhibit 1.) This inverted model isn’t simply about a change in operation; it involves a new cultural paradigm that motivates employees to deliver results because they want to—not because they’re told to…

exhibit

Why Store-Led Change Is the Way to Go:

Store-led change involves testing and fine-tuning a series of interventions in a selected group of trial stores with an eye toward immediate impact. Senior managers can see the potential of the interventions and be confident that they will work. After that test phase, the interventions with the most impact are rolled out rapidly, in disciplined, systematic ways, to the whole chain. Each performance gain supports the funding of the next stage in the roll-out, funding the transformation through its early stages and eliminating the need to “go back to the well” for financing.

Store-led change also means developing a cross-functional approach, improving and building capabilities for the long term. This approach enlists not only the executives from commercial and operational leadership but also the store managers, along with representatives from support functions such as finance, IT, and human resources..

The THREE Cornerstones of Store-Led Change: Let’s examine what makes this approach work well.

A transformation SWAT team must lead the necessary changes. This group’s primary responsibility is to align the business structurally with the interface to the shopper; the SWAT team’s charter makes it accountable for achieving that objective and for piloting the necessary commercial and operational processes. The team is the spark and the propulsive power behind the store-led transformation effort.

To explain what the SWAT team is and does, it helps to explain what it is not. It’s not a group of “the usual suspects” from the executive team—talented but extremely busy leaders who would have to find time to lead the change initiative as yet another in a long list of projects. Instead, the SWAT team comprises motivated, proactive managers hand-picked for the duration of the change effort. It is critical that they be drawn from many operations and functions. Unlike many conventional top-down change teams, which often splinter quickly into functional hammers seeking nails, the SWAT team assumes and retains a function-agnostic stance that better serves the stores’ needs..

The approach also means that the SWAT team members can bear down fully on the change tasks. It is the perfect crucible for learning and leadership development: top managers soon see which team members are set for stardom..

The team’s members—high-potential middle managers, together with senior managers who are, in most cases, three levels below the CEO and are proxies for each top-management role—are tasked with selecting the test stores and deciding on the duration of the tests. Then, with input from the stores, the team develops a series of operational and commercial interventions that are designed to stimulate and sustain growth in sales and profitability. The team also liaises with the retailer’s regional and central teams to make sure that they are on board and to seek specific technical input and support as required..

It’s the SWAT team’s job to validate and approve the interventions using a proven business case or strong recommendation, and to design, develop, and secure approval of a detailed rollout proposal. The team also oversees the chain-wide implications of the program and remains accountable for the successful implementation of the transformation and for its financial success..

Stores of learning allow for safe experimentation. The stores-of-learning idea is essentially an incubator model in which a select few stores are designated as centers for experimentation and learning. With this approach, the proposed change levers—or interventions—are less likely to be caught in organizational treacle. This type of activity creates short-term value and provides the required funding for the more significant structural changes that will be needed to win in the medium term..

The fundamental concept isn’t brand-new, but it is new for retailers to run individual interventions in specific stores, measure the results, and then aggregate those results back in the stores of learning. And it is novel to ask the store teams to determine the priorities for change and to involve high-potential managers in the effort. Their involvement almost always accelerates the change effort..

We have identified FOUR Main Categories of intervention that collectively make a difference:

A Winning Culture – This intervention involves listening and learning from the store teams, helping them by reducing unnecessary work, communicating clearly with recognition and rewards, clarifying accountability and expectations, and creating values that resonate with the store teams and can become part of their everyday jobs. Little things add up: the more that retailers make job duties and expectations crystal clear and consistent, the better. The more that pointless work is minimized, the better employees like it. And the more that they’re listened to—and their ideas acted upon—the more they’ll be vested in the life of “their” stores..

Customer Focussed Opeartions – This intervention focuses on sales rather than waste, improves visibility of daily and weekly performance, prioritizes product availability, emphasizes cleanliness and queue reduction, and addresses labor scheduling. There is enormous potential here: these are the factors that shoppers notice right away. For instance, one grocery chain reduced the numbers of SKUs in some categories by as much as 30 percent and saw a 20 percent lift in category sales in some cases..

The Right Range at the Right Price – Here, the emphasis is on opportunities to improve merchandising impact; upgrade the quality, freshness, and value of items in departments such as fruit and vegetables and bakery; make progress with price laddering or private-label initiatives; and strengthen and simplify promotions. Another retailer that followed a store-led approach cut its numbers of promotions by almost a third, boosting sales growth and store productivity..

A Differentiated Look and Feel – The goals are for the stores to have open and welcoming entrances, clear sightlines and obvious navigation inside the store, legible communications about value and quality, well-planned category adjacencies, and effective macrospace allocation. At one retailer, a floor-up focus enabled the transformation team to quickly improve sight lines by lowering shelf heights, using large signage to improve customer navigation, and placing categories in more logical sequences..

The stores-of-learning concept turns the whole organization—not just store operations but everything from merchandising, marketing, and supply chain to IT and HR—into a laboratory..

Rapid rollout has an immediate impact. To deliver top-line sales growth fast, the transformation project must transition rapidly from stores-of-learning pilot status to a scalable rollout across the whole chain. (See Exhibit 2.) Many of the interventions can be activated immediately, delivering quick impact on customer and team morale and yielding sales gains that range from 3 to 12 percent..

exhibit

The reason why rapid roll-out works so well is that it is led by the stores. It is common for retailers to feel that the process should be led by the organization’s center. However, we have consistently observed that a regionally dispersed model—in which stores of learning serve as “universities for change”—results in more accurate, consistent, and sustainable results precisely because it is operator led..

Some interventions are immediately scalable: with product availability, for example, simple interventions in store procedures and in accurate measurement give immediate results. In the case of one retailer, we saw a 1.5 percent improvement in shelf availability. Other interventions require more fundamental organization design changes: for instance, promotional execution and supply-chain delivery windows can yield strong returns but only after several central functions have rejiggered their operational procedures..

Roll-out has to be systematic, led by the stores’ operators and guided by a clearly communicated methodology…Two Roll-out techniques work well :

  1. Keeping the stores of learning close together so that results are seen and best practices can be shared and acted on quickly
  2. Enabling the first store of learning to support and train a carefully designated group of other stores—perhaps those served by the same distribution center or that are located in the same metropolitan area—so that the roll-out requires a very light touch from headquarters

In turn, the first groups of stores that take part in the roll-outs train the next groups of stores until the roll-out is complete. Done right, the momentum of the roll-out is palpable and energizing in itself..

Now is the time to get back to the basics of retail—one store at a time. By tapping the energy, courage, and commitment of a transformation SWAT team—first, in the selected stores of learning—and mapping and rapidly implementing rigorous roll-out strategies, retailers can look forward to the kinds of performance gains that their shareholders have been expecting all along..

If they truly understand the business from the Store-Level upward, #Retailers can more easily jump-start their transformations…

A choreographed approach, featuring the coordination of the THREE Store-led Concepts described in this article, is what is needed to deliver quick, positive impact, creating the breathing room—and generating the funding—needed to galvanize other crucial transformation initiatives….!!

“Ripe for Grocers”; The Local Food Movement | Consumer Products & Retail | A.T Kearney

Grocery shoppers today want local food—and they are willing to pay a premium for it…Our second annual study of local food market examines this growing opportunity for Retailers..!!

Walk through the produce section of Whole Foods and you’ll see on the signs, as prominently placed as any other information, the state of origin for its fruits and vegetables. With its Local Loan Producer Program, which provides roughly $10 million in low-interest loans to independent growers, Whole Foods has made a bet that local foods are not just a passing fad in buying habits but indeed a new reality for grocery..

Our second study of shoppers’ local food buying habits bears out the optimism about the “locavore” movement. The study finds that local food is fast becoming a necessity for attracting and maintaining customers. A growing number of shoppers, seeking more sustainable foods and hoping to help the local economy, say that the availability of local food is an important factor in what they buy and where they buy it. And, importantly, more shoppers say that they think more highly of retailers that carry local food and have even considered switching retailers to find better local selections. For big-box retailers and other national chains, there is plenty of work to be done to incorporate local foods, as the market remains dominated by farmer’s markets and specialty retailers..

We recently surveyed more than 1,000 U.S. shoppers to examine the strengths and weaknesses of large grocery retailers compared to other formats when it comes to local food. This study builds on our first report on the local food market, which was released in 2013..

Local Food: A Necessity to Compete:

Unlike organic food, there is no universally accepted (or legally binding) definition of local food. Although Congress passed an act in 2008 that defined “regional” and “local” food as being transported either less than 400 miles from its origin or within the same state, most definitions are less precise. At a more basic level, local food typically involves smaller farms located close to where their produce is sold.

Local food is quickly transitioning from one small way grocers can stand out to a component of the shopping experience that buyers expect. Sales of local food have increased an estimated 13 percent per year since 2008, and are now worth at least $9 billion.

Our study highlights several major trends:

Local food remains important for shoppers..More than 40 percent of respondents say they purchase local food on a weekly basis, and another 28 percent buy local food at least once a month. Most say that local food helps the local economy (66 percent) and brings a broader and better assortment (60 percent). Another 45 percent say it offers healthy alternatives to customers. It is clear that retailers offering local food can positively influence customer perception..

Local food awareness and price perception have improved..Sixty-eight percent of respondents (up 3 percent from last year) say they are aware that their supermarket of choice offers local food. Seven percent (down from 11 percent) believe their supermarkets do not offer local food; of this group 34 percent are considering grocers because of this.

Similar to last year, shoppers indicate their primary reason for not buying more local groceries is lack of availability at their retailer of choice (see figure 1)…This year, however, only 47 percent of respondents say availability is the primary reason they do not buy local, down 10 percent from last year, which underlines growing awareness of local selections. Dividing our respondents by region, the western United States has the lowest availability concerns (43 percent), compared to 48 percent in the Northeast and South and 50 percent in the Midwest..

Availability is the main reason shoppers do not buy more local food

Price perception has improved as well. Only 31 percent of respondents say that local products are too expensive, down from 37 percent last year, with the West and South reporting the best prices. Only the Mountain region cites price as a more important deterrent than availability..

Leaders are differentiating on “fresh”..Our survey respondents said that when they buy groceries, freshness is far and away the most important purchasing criteria (60 percent), followed by price (30 percent). Local sourcing is a powerful way for retailers to demonstrate their products’ freshness, as 30 percent of respondents do not differentiate between fresh and local..

This is particularly evident in specific categories: Many consumers want both fresh and local in categories such as fruits and vegetables, prepared foods, meat, fish and seafood, dairy and eggs, and bread (see figure 2)…While convenience ranks highly for frozen and canned foods, this is less of a factor for fresh categories (aside from prepared foods). Other factors, such as health impact, organic, and taste are generally consistent across categories..

Freshness is an important decision factor for buyers in many food categories

Shoppers are willing to buy local food—and pay more for it..Seventy percent of consumers say they will pay a premium for local food, the same number as in last year’s survey. However more of those consumers say they are willing to pay a bigger premium—one-third (compared to less than one quarter last year) say they would pay 10 percent more. Our findings indicate that more people are willing to pay extra for local food than they are for organics. Still, buyers don’t have unlimited budgets for local food, which still makes up the minority of their shopping baskets. Thirty-seven percent say high prices are preventing them from choosing more local food options..

To gauge interest in local foods for specific products, in this year’s survey we asked respondents how much more they are willing to pay for locally sourced versions of some specific products. More than half would pay 15 percent more for local strawberries, baguettes, eggs, and chicken. On the other hand, the majority of respondents say they would not pay more for local frozen green beans or lasagne..

Locally sourced food has broad-based appeal, with spikes in key customer segments..

While local food has wide appeal for a host of reasons, some customer segments are more inclined to buy local food and pay more for it. As local food costs more and is often positioned as a premium product, it is not surprising that income level is a strong predictor for buying local. Seventy-five percent of high-income earners in our survey are willing to pay extra for it..Overall, the value of local food has increased in high-, medium-, and low-income segments compared to last year. Thirty percent of low- and medium-income workers will now pay up to 10 percent for local, while almost 20 percent of high-income earners are willing to pay more than 10 percent, twice the number as last year..

Respondents from rural and small communities, which are closest to where food is grown, tend to be willing to pay more for local food than those from larger cities. High-income earners in small towns are, on average, willing to pay 10 percent extra for local food, compared to about 5 percent for residents in large cities. There are some broad regional differences when it comes to buying local food across the country, from a 5 percent premium in the Southeast to a 7 percent premium in the West and in the Northeast. The share of local food purchased in the typical shopping basket is also highest in these regions (particularly on the west coast), compounding the regions’ attractiveness for local food retail. The Pacific Coast region leads the pack with 27 percent local food in a typical basket, followed by the Northeast at 22 percent. The Southeast has the lowest rate, with local food making up 16 percent of a typical basket.

Large supermarkets are still struggling to gain customer trust..Big-box stores and national supermarkets are the most common places our respondents shop for food, yet they (along with online grocers) rank well below farmers markets, specialty supermarkets, and local supermarkets when it comes to customer trust. The correlation between fresh and local is further explained by consumer response to which retailers were most trusted to provide fresh foods. Again, farmers markets and specialty supermarkets are considered most trustworthy, followed by locally owned supermarkets, national supermarkets, big-box and online grocers. As we noted in last year’s report, many customers believe that retailers tailor the term “local” to their advantage with little transparency into how they define it. Fruits and vegetables harvested hundreds of miles away are often still declared local, which has drawn criticism from small farmer organizations—and skepticism from buyers..

Recommendations for Food Retailers:

This year’s survey results reveal that big-box and national retailers still lag in customer perception when it comes to providing high-quality, affordable fresh and local foods. What can these retailers do in the short term to refresh their local food strategies ?

Tap into the market for “fresh”..Freshness is a primary factor in grocery shopping decisions—in fact, in last year’s survey respondents rated this higher than price. Large grocery retailers lag their smaller rivals and farmers markets relative to both price and quality perception when it comes to “local” and “fresh.” Given that our research has found a strong correlation between fresh and local, large retailers can build awareness of their fresh products simply by sourcing and marketing local more effectively—particularly in categories such as produce, meat, bread, and dairy..

Test local autonomy over merchandising and sourcing..The local food leaders we identified in our research have given local managers more autonomy to make local food buying decisions. For example, H-E-B in Texas and Wegmans on the East Coast allow local managers to build their own sourcing relationships with local farmers and merchandise these offerings as they see fit. The local autonomy model optimizes quality, freshness, and availability—three critical elements for success in local we have identified in our consumer research. These factors, combined with customers’ increasing willingness to pay for local offerings, can offset the potentially higher costs from the loss of efficiencies such as standardized processes and centralized buying..

Consider a direct supply chain model..There are three primary supply chain models grocers use to source local food, each with its advantages and disadvantages. Wholesale is perhaps the most difficult model to control for quality and freshness; however, it provides simplicity and access, which is likely why Amazon Fresh uses it. Many large retailers use brokers to source local food on a national level. C.H. Robinson, the largest such broker, continues to build numerous sourcing relationships with local farmers across the country.

A third model—establishing direct relationships with independent growers in the region—is generally the costliest but may prove the most effective. The direct supply chain model optimizes availability, quality, and freshness and provides maximum sourcing transparency to the consumer. As shown in the example of Good Eggs in the sidebar on page 3, some upstarts are using this model to upend the traditional grocery supply chain..

We recommend national retailers begin piloting the direct supply chain model on a region-by-region basis, initially as a complement to broker and wholesale market relationships. As quality and freshness emerge as differentiators in local food, direct supply models will be critical for long-term success..

Going Local:

The local food movement has shifted from talked-about trend to burgeoning opportunity for large grocery retailers. However, the window of opportunity is small—there is little time to waste convincing customers that you can provide high-quality, fresh local food, especially considering how much competition is emerging in this space..

It may take some outside-the-box thinking—in particular giving local stores more autonomy and using a more direct supply chain model—but those moves will help make an immediate impact and build longer-term growth advantage in this highly competitive market..!!

“Avoiding Hidden Margin Erosion” in Mid-Market Supply-Chain Operations | by: Brad Huff | Supply Chain Digital

According to the Middle Market Indicator (MMI), 85 percent of middle market executives cite the ability to maintain margins as a somewhat to highly challenging issue..

This should be no surprise, considering mid-market companies are squeezed between large and small cap businesses: they must streamline product manufacturing and delivery operations as much as larger companies, yet be as nimble as smaller companies. As a result, they have a unique set of challenges that make margin management even more critical..

Today’s combination of increasingly complex supply chain operations and the availability of more accessible/affordable technology means mid-market companies can and should take a deeper look into these areas as a means to maximise margins..

Mid-market supply chain operations explained

Hidden Planning and Forecasting Areas:

Mid-market companies often must focus so tightly on delivering quality products and services to their customers that investing resources into analyzing and fixing what appear to be minor supply chain issues might not seem practical or even feasible. It’s true that each of these less obvious areas does not cause significant margin erosion on its own; however, many mid-market companies can suffer from a number of combinations of these issues. When evaluated in that context, the impact on profitability can be noteworthy…

Evaluating materials based on landed cost instead of the item’s unit cost is a growing trend in planning and procurement. Materials planning based on landed cost allows companies to factor transportation and logistics costs into the contract item cost for more visibility into actual materials expense..

Forecasting is also an area that can impact margins. Without reliable forecasting processes and tools, a company can easily order the wrong quantity of materials. “Projecting heavy” unnecessarily consumes warehouse space, increases the risk of waste or loss, raises taxes, and impacts inventory turns. “Projecting light” drives up procurement and transportation costs, as well as increases the risk of materials run-out. Fortunately, there are a number of low-investment ways to increase accuracy, such as increasing collaboration with customers to gauge future demand, integrating marketing plans and projections to prepare for order spikes or lulls, or increasing forecast sharing and communication with suppliers via a collaboration portal or other automated workflow system..

Hidden Inbound and Receiving Areas:

Ordering and receiving inefficiencies, such as a lack of automation and collaboration in critical areas, play a quiet yet potentially large contribution to reduced profits. Automating workflow tasks between buyers and suppliers such as sending, receiving, acknowledging and approving purchase orders can enhance processing speeds by more than eighty percent while reducing costs by approximately 83 percent..

But the benefits go beyond the initial savings. Automation also increases purchase order throughput and allows you to focus efforts on quickly resolving issues that require human attention. Configurable workflow helps to ensure compliance so what is shipped always matches what is ordered. With simpler implementation and more user-friendly interfaces, these solutions can consolidate product and order communications to help minimize disputes as well as empower planners to better forecast demand..

Carrier and delivery windows:

According to Refrigerated Transporter, “Supply chain compliance is now a vital component of logistics transactions and supplier relationships.” Requiring fixed materials delivery windows from suppliers is a growing trend in supply chain management that impacts margin on both the buyer and supplier side..

In recent years, improvements have been made in receiving dock scheduling systems in an effort to help warehouse managers and supply chain professionals streamline operations and reduce unnecessary cost. As a result, more companies now require dock reservations for inbound orders, including financial penalties for suppliers who deliver off-schedule..

For example, in 2010, Walmart joined other retailers in imposing a penalty on suppliers that failed to deliver products within the company’s prescribed four-day window. Under the policy, suppliers whose products arrive at Walmart before or after that period face a three-percent penalty based on the cost of the goods..

Before the policy went into effect, Walmart requested delivery within the four-day period, but suppliers had no incentive to actually adhere to that schedule. Although it was not the first to adopt this policy, Walmart’s status as the world’s largest retailer prompted a domino effect that continues to affect supply chains to this day…as late/early delivery fees are now the norm for many industries..

Installing a functionally strong shipment collaboration solution can help to reduce and/or eliminate these less obvious/hidden logistics areas that eat into margin. These types of solutions allow order fulfillment thresholds such as delivery windows, order quantity, and carrier selection/mode to be configured and validated prior to shipment release..

Advanced Shipment Notices (ASNs) and package/container traceability are also typically included, along with pre-formatted, compliant labeling to further reduce receiving dock errors…As a result, all stakeholders across the buy side and the supply side have real time visibility for more accurate resource and materials planning through the rest of the supply chain..

In “Omni-channel Retail”, It’s Still About Detail | BCG

“As omni-channel retail increasingly moves from concept to reality, consumers are sending a clear message : Convenience is king…”

But the days when convenience could be defined solely in terms of drive times and the in-store experience are long gone. In today’s reality, “convenience” means letting customers decide when, where, and how to shop. They want to order anytime, anywhere, and from any device; to get their purchases in the store, at a separate delivery location, or through home delivery; to determine their own shopping and delivery or pick-up windows to fit their busy schedules; and to be able to return items at any of the store’s retail locations, hassle-free..

The Rise of Click-and-Collect Retail:

The emergence and growth of click-and-collect retail—which allows shoppers to order an item online and then go get it at a nearby store location or pick-up point—is evidence of the power of convenience in the omnichannel world. For many shoppers, the click-and-collect experience offers a more convenient mix of speed, quality, and flexibility than either traditional shopping or standard home delivery…

Already, 35 percent of shoppers who buy items online have used click-and-collect retail to pick up their purchases, and that proportion will increase to more than 75 percent of shoppers by 2017, according to retail researcher Planet Retail. Shoppers in France can pick up their groceries at more than 2,000 “click and drive” facilities. On the basis of our experience with leading retailers, we expect substantial growth in the use of such services.

Done right, click-and-collect retail can be a way for brick-and-mortar retailers to differentiate themselves from pure-play e-tailers by leveraging their existing store assets to offer fast delivery, low prices, and even greater convenience. That’s why many traditional retailers are eager to capitalize on this opportunity..

But click-and-collect retail can also pose real risks for retailers that fail to execute it flawlessly. A recent survey by market researcher E-consultancy.com found that as many as 60 percent of online consumers in the UK and U.S. said they would not shop at retailers that failed to deliver on their promises. This is as true for click and collect as it is for home delivery—particularly when it comes to apparel, a sector where customers expect to pick up the exact size and color they ordered and not a close substitute. In a hyper-competitive retail environment, an annoyed customer is likely a lost customer..

Supply Chain Imperatives:

So, for retailers that seek to make click-and-collect retail a core component of their omni-channel #RetailStrategy, many specific #Supply-chain capabilities are required. (See Exhibit 1)..All are important, but in our experience, it all begins with providing shoppers—and store associates—with accurate, real-time information on product availability…

One way to manage this critical capability in a click-and-collect retail environment is to deliver the customer order from a distribution center to the store, as UK retailer John Lewis does. Centralizing click-and-collect fulfillment in distribution centers concentrates and simplifies the inventory management challenges. But it also adds precious time to the order-to-pick-up cycle, putting off impatient customers who might simply buy the item elsewhere next time. And many retailers’ legacy distribution networks are ill equipped to fulfill customer orders from existing distribution centers, which are typically designed to pick large orders for stores.

For many retailers, then, a better solution is to pick click-and-collect orders from store stock. But getting the basics of in-store inventory management right presents a real challenge in terms of meeting customers’ expectations about availability. In our experience, a store’s balance-on-hand accuracy can be as low as 60 percent, which would be disastrous for click-and-collect customer satisfaction. Search online for “click and collect” for many big-name retailers, and you will see a slew of messages from customers describing poor experiences and products not being available when buyers turned up to collect them, even though the website had indicated that the goods were in stock. That’s why at Best Buy, for example, clerks physically doublecheck the availability of every item in every click-and-collect order in the stores themselves to overcome unreliable in-store inventory.

Why the poor performance? In support of their initial omnichannel offers, many retailers have chosen to focus first on building new infrastructure—pick-up points, distribution centers, delivery networks, IT systems, and even new stores. No doubt, these solutions can be critical components of a successful long-term omni-channel strategy, but getting the basics right, including in-store inventory, is often the most important first step to creating immediate impact and options for the future…

Back to Basics:

Best-in-class players focus on making in-store processes efficient, rigorous, and self-correcting; their processes are consistent with our six “golden rules” of inventory management. (See Exhibit 2.) No IT system can account for products mistakenly left in the back room, inaccurate distribution-center deliveries, removal of damaged goods from shelves that is not captured by the inventory system, check-out errors, and theft. These unavoidable issues, and their consequences, must be accounted for and captured, accurately, by the inventory system. This often needs to be done by a real person, properly incentivised and managed. Ideally, every touch of inventory at every point in the process should validate, correct, or improve inventory accuracy. In our experience, major retailers with such self-correcting systems and processes can achieve balance-on-hand accuracy of greater than 95 percent; at that level, the impact on items popular with customers is marginal…

Building such an approach, however, requires getting all the details right: understanding where errors occur, why they occur, and what solutions can be implemented consistently and effectively by store employees. In this endeavor, the devil really is in the details…

Eventually, emerging technologies will likely become a key part of the solution as well. Radio frequency identification, or #RFID, for example, has the potential to dramatically improve the accuracy of the information that supply chains depend on. Unfortunately, the ability to tag individual items economically and to scale up the technology to the needs of large retailers is still several years away. In-store cameras are a promising alternative for monitoring store stock, but they will require further developments in high-quality processing and image recognition if they are to make a difference. But even the most advanced technology will never entirely substitute for the disciplined in-store behavior needed to drive true inventory accuracy…

Thriving in an #OmnichannelRetail environment will require a host of different fulfillment capabilities. Retailers must design and execute the best possible customer service across all retail channels, build the infrastructure needed to ensure consistent pick-up and return processes, and continually capture and analyze the data needed to understand their customers and customers’ expectations of each channel so that stocking and flow strategies can be adjusted accordingly.

But that’s a longer-term goal. Near term, #Retailers, that seek to capture their fair share of the growth in click-and-collect shopping should focus first on getting the basics of stock accuracy right. Doing so will deliver near-term benefits to the #Bottomline and position them for success, no matter what #OmnichannelStrategy, they decide to pursue…

“Corporate Team-Building”: Exercises in “Workplace Collaboration” | by: Edward Iwata | Concordia

Team-building may be the most studied and elusive concept in the management and leadership field…Clearly it remains one of our most valuable practices. And it applies equally to companies and nonprofits, to small groups and large organizations..

#TeamWork, influences nearly all of us in our lives and careers…Think of the many scenarios that involve successful (or failed) team-building : Job-related projects and partnerships…College studies and internships…Volunteer church or school activities…Sports teams and performing arts groups..

As management consultant Patrick Lencioni writes in “The Five Dysfunctions of a Team”, #Team-building “remains the ultimate competitive advantage because it is so powerful and so rare.” If an organization and its people can work toward the same goal, it can whip any competition and rule any market or industry, according to Lencioni…

Teams have been around for centuries, since ancient humans hunted and farmed together. Team-building grew in complexity through the Industrial Age, mass manufacturing and the computer era. Globalization and competition among the United States, Japan and Germany raised team-building to an even higher level, according to Harvey Robbins and Michael Finley, co-authors of “The New Why Teams Don’t Work.”

For certain, all employees can use team-building skills, including the setting of tasks and goals, building trust and community, communicating well and tapping into diverse thinking and backgrounds.

Benefits of collaboration illustrate value of Team-Building:

Why do we rely on Teams so much ? For many reasons, according to Robbins and Finley :

  • Teams save money.
  • Teams increase productivity.
  • Teams improve communications.
  • Teams create better-quality goods and services.
  • Teams lead to improved processes.

Similarly, the best teams share concrete goals, develop trust, define their roles as team members and engage in clear communication and other team-building practices, say Charlene Solomon and Michael Schell of RW3, an online cultural training firm.

Team-building approach helps multiple industries:

Strong team-building can be found in every field and industry. In healthcare, for instance, hospitals are finding that well-run, interdisciplinary teams of healthcare professionals may reduce costs, improve the treatment of patients, shorten their average hospital stay and even reduce death rates, according to AMNHealthcare.com.

More hospitals — from Long Beach Memorial Hospital in Long Beach, Calif., to Unity Hospital in Rochester, N.Y. — are deploying teams of doctors, nurses, administrators, social workers, pharmacists and case workers who meet throughout the day to share information and assess patients.

At the Cleveland Clinic Center for Multidisciplinary Simulation in Cleveland, Ohio, doctors, nurses and administrative staff train as teams in the clinic’s simulation center. They study and review their performance in simulated medical situations, such as stroke or heart attack patients arriving in the emergency room.

In the nonprofit world, the Children’s Defense Fund in New York City became a leader in child health issues by using cooperation and team-building with government agencies, labor unions, churches, daycare centers and other partners, according to a report by Venture Philanthropy Partners and McKinsey & Company.

The fund quickly achieved its first goal: to increase the percentage of children receiving proper vaccines, as the percentage of vaccinated children in New York City rose from 52 percent in 1995 to 85 percent in 2001. Then the organization and its partners went further, persuading Congress to fund the multibillion-dollar Children’s Health Insurance Program for youth nationwide.

The team- and alliance-building strategies of the Children’s Defense Fund “allowed it to tap into the strengths of existing organizations without threatening them” and also “add value to the whole (child health) sector,” according to the McKinsey & Company report.

Global teams can outperform Local Teams:

In global business, well-run teams based around the world can significantly outperform and collaborate better than local teams, according to a study of 80 software development teams by Boston Consulting Group and business professors.

The study looked at 28 research facilities in the United States, China, Brazil, Denmark, France, Germany and other countries. The researchers found that virtual teams with strong task-related processes — mutual support, work coordination, open communication and full contributions from team members — performed more strongly than local teams.

“Managers have typically viewed dispersion as a liability rather than an opportunity,” the authors of the study point out. “But dispersion can provide substantial benefits if companies can take advantage of the diversity and varied expertise of team members at different locations. … Our research shows that virtual teams can outperform their (local) counterparts when they are set up and managed in the right way.”

What causes setbacks in Teams:

Team-building isn’t easy, of course. Unless it is encouraged and practiced widely by an organization, many employees will work only with their goals in mind, with little interest or incentive in broader teamwork throughout the workplace.

Even well-meaning teams suffer severe setbacks. In their study of 55 teams, London Business School professor Lynda Gratton and Tamara Erickson, president of the Concours Institute, found that collaboration and cooperation decreased when:

  • Teams grew larger, especially over 20 members.
  • Teams became more virtual and spread among many locations.
  • Team members had higher education levels and a greater proportion of experts with specialization.
  • Teams had a higher proportion of strangers and a greater diversity of backgrounds and experiences.

In studying successful teams, however, Gratton and Erickson found that team leaders and employees leaped past obstacles by focusing on key factors, such as:

Building and investing in “social relationships throughout the organization” :

At Royal Bank of Scotland, new corporate headquarters near Edinburgh featured an indoor atrium with shops, restaurants, biking and jogging trails, athletic facilities and green space for picnics and barbecues. The goal: to create more open communication, a free flow of ideas and a sense of community among employees.

Training in team-building skills:

It’s not enough to encourage employees to collaborate. They must be trained in the skills of collaboration, from conflict resolution to building personal trust. PricewaterhouseCoopers, for one, trains its employees worldwide in networking, coaching, communicating values, having difficult conversations and other team-building practices.

Using leaders who are task- and relationship-oriented:

The most successful teams have leaders who are skilled at setting tasks and goals, and at building relationships and a climate of trust and goodwill. In performance reviews at Marriott, managers are assessed by their growth in both types of skills.

Moving up to ” Team-Learning “:

After Team-Building 101, some leadership experts recommend Advanced Team-Building in “learning organizations.”

In his classic leadership manual “The Fifth Discipline Fieldbook,” management consultant Peter Senge calls it “team-learning,” which involves high-level dialogue and group dynamics that go beyond simple agreement to create real alignment, or new ways of thinking and working as a powerful and unified whole.

In short, team-building won’t vanish soon…And leaders and employees who use the best team-building techniques are sure to strengthen their teams, colleagues and companies…