As technology becomes embedded in every part of the shopping experience, is the knowledge of current retail bosses up to scratch?

I recently read Salim Ismail’s book Exponential Organizations about why new businesses are 10 times better, faster and cheaper than yours – and what to do about it.

It should act as a clarion call to all chief executives of traditional retailers, especially those who learned their retail skills in the last century. Yes, you at the back – pay attention.

“The hard truth is that any business taking more than six months to make critical change today is virtually guaranteed to be out of date before they are finished”

Dan Murphy

The unavoidable fact is that retail (like so many other sectors) is changing at an exponential rate, owing to accelerating evolution in customer behaviour, web technology and the multichannel world.

The hard truth is that any business taking more than six months to make critical change today is virtually guaranteed to be out of date before they are finished.

And any retailer making major investment plans which assume knowledge of customer behaviour three to five years from now is frankly reckless.

The problem is that it is tough for old dogs to learn new tricks.

If you are a senior executive with 25 years’ experience in retail, you have never seen a major systems transformation that took less than three years, and probably took five.

Your product development and ‘take to market’ cycles probably take between three and six months. New stores take many months to launch and require hundreds of pages of analysis. Major decisions can go round in circles for months.

The problem is that such timescales are positively (and fatally) glacial in today’s digitally enabled world.

Your biggest competitors are no longer the other big retailers; they are just as likely to be a 15-year-old kid with a computer sitting in bedroom somewhere in Estonia.

New ideas come thick and fast these days and they don’t come out of late night boardroom meetings any more – they arise as a result of your customers deciding they want something different and want it now.

If you don’t spot the signs quickly enough someone else will reach over and eat your lunch.

Finding new talent

So how do retailers resolve the need for speed with the traditional deadly pace of change in retail? Relying on traditional 55-year-old leopards to change their spots seems risky, so maybe some new blood is required.

It is very interesting to see how many retailers are now starting to cast their executive nets beyond the traditional retail pools and into faster moving sectors such as digital business, technology and telecoms.

Recent examples of such non-retail senior hires include Kingfisher, Dixon’s Carphone, Debenhams and Sainsbury’s.

It is very encouraging to see our large retailers bringing such fresh expertise into their boardrooms, with valuable experience of how faster moving sectors, more advanced in terms of digital technology, are dealing with exponential change.

What is less encouraging is the number of large retailers where the boardrooms are still full of people who bring only 25 to 30 years of experience in retail, and very little knowledge of what other sectors are doing.

In today’s fast-changing world, this is verging on the irresponsible.

As a final observation, a recent study of young chief executives of successful billion dollar businesses found that the average age of the boss in the 50 top $1bn dollar businesses was just 31. Just saying, you guys. Just saying.

  • Dan Murphy is a partner at management consultancy Kurt Salmon