Retailers have long grappled with innovating their proposition, products and customer experience, through establishing the right level of constructive tension between Marketing, Trading and Operations. Linda Hill* describes this innovative process as “creative abrasion, creative agility and creative resolution”.
In retail innovation, this manifests itself in how Marketing, Trading and Operations challenge and support each other to come up with stronger, more innovative and profitable solutions for their customers.
Get it right, and the players get comfortable with being uncomfortable, always striving for a better answer, knowing who makes what decision, and how to consult with one another appropriately. “Restless dissatisfaction”, as Lord Stuart Rose coined it at a recent Home Delivery Conference.
Get it right, and the players get comfortable with being uncomfortable, always striving for a better answer, knowing who makes what decision, and how to consult with one another appropriately
Getting the right balance between creative abrasion, agility and resolution
But business is messy. The inter-play between these functions can go off-piste very easily. In our experience of retail innovation, there are three classic types of ‘malfunction’:
Malfunction 1 – Creative abrasion turns into destructive erosion – as the egos between the three functions battle it out for supremacy. The Traders think they know their customer better than the Marketers, whilst the Marketing function believes it can more easily translate the customer proposition into a category strategy and plan. Meanwhile, Operations can stick the boot in with its in-store anecdotes and belief that it knows both the customer and the products better than anyone else.
Malfunction 2 – Creative resolution gives way to disconnection and separation – as the functions do not consult or liaise with each other sufficiently. In a passive-aggressive way, the functions are polite, but ignore each other. Decisions made by Marketing and concerns from Operations are not accurately translated into successful category strategies, and Operations don’t align behind the marketing briefs and product campaigns, waiting instead for them to go horribly wrong.
Malfunction 3 – Over-collaboration – in contrast to the first two malfunctions, abrasion, agility and resolution can also get drowned out by an over-eagerness to collaborate with each other. Everybody is engaged, involved, consulted. But no-one knows who actually makes the decision, and what weight to place on the inputs to marketing, product and customer service plans.
How can Retailers avoid these malfunctions?
Try a combination of:
- Agreeing the ‘rules of the game’ between Marketing, Trading and Operations, for both short-term and long-term decisions:
- Make clear which of the three functions takes the lead in driving the business forward
- Clarify which individual function makes each of the big decisions, and who are the few individuals that are consulted in order to improve the decision quality
- Minimise the number of forums to assist in decision making
- Build trust by understanding one another’s personality types to assist in giving and receiving constructive challenge
- Create the right workplace conditions for more natural interactions between functions.
OE Cam recently completed pan-european research into the human factors driving innovation. A key finding is that successfully innovative organisations set a new managerial mind-set “They question existing mind-sets and take out control systems that sap motivation. To ensure an effective balance between the ‘freedom to act’ and ‘accountability’, critical decisions are made by those who understand the consequences of their actions”.
“They question existing mind-sets and take out control systems that sap motivation. To ensure an effective balance between the ‘freedom to act’ and ‘accountability’, critical decisions are made by those who understand the consequences of their actions”
Going one step further, to stimulate more innovation in retail, leaders need to:
- Install an innovative spirit within and between the teams;
- Let go of the natural tendency towards control and order, and accept more of a chaos management model;
- Increase accessibility to information for teams, rather than use it as a mechanism to control employees;
- Allow ‘dabble time’ in which serendipity can emerge.
For more information, download the executive summary of “Human DNA in Innovation”.
Download the New OE Cam journal ‘Human DNA in Innovation’. Can you modify organisational DNA to become more innovative?
* Linda Hill, Management Professor, Harvard Business School, Author of “Collective Genius, The Art and Practice of Leading Innovation” (2014)