This isn’t just a failed business transformation, this is a Marks & Spencer failed business transformation
As the reality of the first of 100 M&S store closures across the UK was greeted by demonstrations from angry customers last week, I have been reflecting on why this venerable British retailer has failed in numerous attempts at transformation over the years. The business has been led by a succession of capable and committed retailers, but all have failed to arrest “the underlying drift in competitiveness”, as highlighted by current Chairman Archie Norman – one of the most talented retailers of my generation.
Business transformation failures have been studied widely by many academic and business writers. John Kotter in his seminal article in the Harvard Business Review “Leading Change: Why Transformation Efforts Fail” identifies eight key reasons why transformation efforts fail and many of them ring true in the context of M&S. Archie Norman and his Chief Executive, Steve Rowe, have acknowledged that previous efforts at change have failed. The question is, will this transformation effort be any more successful than those of the past?
At CP2 we have often worked with clients after they have attempted to transform their business and have been disappointed with the results. Whilst there can be many reasons for failure – Kotter lists eight reasons in his HBR article – In our experience there are three themes that we see most often.
1. The change programme is treated as a standalone ‘project’
A lack of collaboration and cross business support is the kiss of death for most change programmes. Establishing the right governance process including hands-on executive team ownership and a cross-functional mix of the ‘right’ people is a crucial requirement.
M&S is certainly seeing their programme as a 5-year, company-wide transformation. Steve Rowe’s statement in the last annual report identified three steps; restoring the basics, shaping the future and making M&S special again. I hope that John Kotter’s reason number one for why transformation efforts fail – “not establishing a great enough sense of urgency” – is being addressed in the UK’s erstwhile favourite retailer.
2. Business leadership is not aligned
Clearly, the role of an organisation’s leaders in bringing about strategic change is critical. Without informed, aligned and committed leadership it is very difficult to bring about profound long-lasting change. And the bigger the change required, the greater the challenge for an organisation’s leaders.
In our experience leaders frequently underestimate the range of things that they need to do to create organisation-wide belief in the ‘new way’. People take more notice of what leaders do than what they say, so speeches at town hall meetings on their own are not enough. The sentiment we hear most often from employees is that despite the speeches by the CEO and the senior management articles in the company newspaper, they need permission to operate in new and different ways. As Archie Norman says about M&S “our failure to adapt has not been a result of a weakness in strategic thinking, nor a lack of talented leadership, but a failure to shape the culture that has proved resistant to change”. Peter Drucker famously said “culture eats strategy for breakfast” and that is so true.
What this means for leaders is that they need to create the belief, the permission and the capability for employees to operate in new and different ways. This means communicating a vision, engaging employees, spending time with customers, removing obstacles (for customers and employees), behaving differently themselves and being seen to be making decisions at every level that are consistent with the new direction.
3. The organisation does not prioritise the employee experience
Some years ago, we started work on a customer transformation programme for a leading hotel group. Just two weeks into our work it became apparent that the root cause of many of their customer problems related directly to the employee experience. As Peter Simpson, former Commercial Director of First Direct once said: “you can’t pretend to be one style of brand to your customers if you’re a different style of brand to your people”.
If an organisation cannot answer positively to these five questions, then there is work to be done
- Does your team understand what customers expect?
- Are you focusing on the employee experience to drive commitment, enthusiasm and pride?
- Have you aligned your performance management process with the customer experience?
- Are you training your people to connect emotionally in a way that is consistent with your organisation’s customer promise?
- Do your processes, engagement tools and technology equip your people to deliver your customer experience?
How does an organisation equip employees with the knowledge, attitudes, beliefs and skills to deliver the desired customer experience? A big part of this is behavioural change which empowers and inspires employees to deliver an on-brand experience. The most effective brands strategically hard-wire this approach across the business. Bespoke training is aligned with their branded customer experience programme to deliver value for their customers.
When senior executives are all on board, walking the same walk, talking the same talk and modelling the behaviours they want to see.
When delivering a great employee experience is a high organisational priority and the voice of the customer is infused into all that you do so that the customer experience is not viewed separately to what the business is already doing.
Then efforts to improve your customers’ experience cannot fail but deliver the desired commercial business outcomes.
I do hope that Marks & Spencer are successful in their efforts, but time is not on their side.
cp2experience is a specialist customer experience consulting and training company. We help clients improve their customer experience in ways that drive profitable growth. We know that organisations which put customers and their people at the heart of their business outperform the competition. These enlightened companies create better places to buy for customers, better places to work for employees and better places to invest for shareholders. We are committed to sharing our knowledge, experience and insight with clients, friends and partners. To that end we hope you find this guide of value.
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