Our client is one of the world’s largest retailers. When it lost its number one spot in its home market, the new CEO called us in to help. He was seeking a consulting partner to help him address rising costs and sluggish sales by designing and implementing a business transformation programme encompassing thousands of stores and the head office. Time was critical: change had to happen fast, and it had to last.
It all started with a 10-day scoping visit, running culture diagnostics, workshops and focus interviews to really get to the nub of the organisational challenges and create the systems map of what needed to change and why. This helped us to identify and agree the high-level objectives for the programme, which in turn fed into the programme design.
The business transformation programme we designed aimed to clarify and get alignment behind the strategy, to reduce head office costs and to improve store performance, working on all aspects in parallel. Key to this work was cultural change and capability transfer: without a change in mindset and a new set of tools and techniques to lead and implement the desired changes, the work would only go surface deep: we needed to create long-term sustainable impact.
To achieve this, we designed the programme around five buckets of work:
Clarifying and communicating the strategy, reducing the number of strategic initiatives, coaching the executive team to become high performing decision makers, and creating and coaching a central strategy change delivery team.
Operating model and organisation design:
Identifying and removing ‘bad cost’; defining the right operating model for the business, then redesigning the head office to enhance customer and patient experience in line with the new operating model; strengthening the Hub (‘air traffic control’ for stores operations), running a ‘Stop the Noise’ project to reduce the huge number of conflicting requirements to store, and redesigning the hub structure, accountabilities and core processes to maintain efficient and effective communications.
End-to-end lean process design:
Streamlining the two core commercial processes which together contribute most of the profit: removing silos and blockages to improve the customer experience.
Supporting the whole transformation programme, by identifying the desired organisational climate that leadership needed to shift to, and ‘crowdsourcing’ inputs from around 2,000 people from head office, stores and distribution centres to create a new leadership approach.
The stores improvement project:
Using a retail continuous improvement methodology, supporting store teams and regional management teams to use problem solving tools to drill down into what was holding store performance back, trial solutions and release the energy and passion of the store staff to drive sales and improve the customer experience.
Changing a culture that has been ‘tell-do’ for decades is hard. Our concept of ‘freedom within a framework’ really helped to give leaders the confidence that giving store staff a voice wouldn’t result in anarchy – and helped give the staff the confidence to try out solutions in a safe environment. At the same time, role modelling was key to success in a culture where hierarchies are well entrenched: the leaders needed to demonstrate a different, open, collaborative approach early on, to create the followership and belief amongst the staff that this time things were going to be different.
By getting early results and telling and sharing stories throughout the organisation, we sparked a movement that generated its own momentum.
During the course of the programme, we had to be flexible to changing external and internal conditions, which meant revising the scope and the approach to create the best outcome for our client.
Our business transformation has helped to create a collaborative climate of continuous improvement. Spearheaded by the leadership work which was infused into every interaction we had, local teams are solving problems, silos have been broken down and staff turnover has dramatically reduced. Over 100,000 staff have been directly involved in the programme so far.
The financial results are huge. We can’t share the confidential data here, but we can say that the RoI was at least 20:1, with a reduction in head office costs, a sales uplift against control stores and a significant reduction in store inventory. All of this has created quite an impact.