“Where are the Boards?” - presentation for World Retail Congress 2018 by Magnus Brehmer
“Where are the Boards?” - speech for World Retail Congress 2018
Publication by Magnus Brehmer
1195 Words | 4 min 20 sec
After three days in Madrid at the WRC – World Retail Congress, its 12th event worldwide, with well over thousand participants, some 170 speakers/experts, and all the world’s biggest players including the on-line giants Amazon and Alibaba/T-Mall, one initial reflection would be; YES, there has perhaps never been a time in history as disruptive to the retail category as right now, and; YES, there has perhaps never been a time in history, as full of opportunities and innovative ideas in the retail category as right now.
Where are the Boards?
This was the headline of my own speech at the WRC, in the very opening at 8.30 AM the first day of the congress. I had been asked by the Chairman of WRC, Mr Ian McGariggle to be provocative and mind challenging in my approach, and also to focus more on the top-management/executive level than on my normal subjects Marketing and Brand Management (where the congress was already pretty well represented). So I decided to attack the boards.
What is causing the retail meltdown in 2017?
The apocalypse headlines have followed each other and big players are falling. But the number of physical stores has actually been declining as a total for quite some time. And it started many decades before on-line. And what have the boards been up to during this time? Well let’s see who is to blame for this development? The CEO’s? Well, who is hiring and firing the CEO? The big on-line players? Well they have been around for 10-20 years by now, and can’t be seen as any kind of surprise. The new generations of consumers? Who is responsible for keeping an eye on the macro factors and a strategic view on the market? Knowing who they are, how many they will be and what trends that are thought to appear in society in a 5-10 years perspective? The Politicians? Again, Who is responsible to follow the macro environment and keep an ear to the ground regarding investments and regulations? Facebook and Social Media? Those have also been around for many years, with often decades of accumulated losses, before they managed to get a foothold in the market. They cannot have been any surprise for the retail industry the last ten years? Starbuck’s and Coffee Shops? How come that the consumers, in that case, seem to prioritise hanging out, and spending money on those guys rather than go shopping? Why have retailers not been able to invest and meet such competitors in terms of experience?
What’s wrong with today’s Board Agenda?
Many boards meet 3-6 times a year and follow the same agenda template that was created in the 1950’s.
Most boards are spending most of their meeting times looking back on the previous quarter or month.
Most boards are spending 90% of the time talking about complicated structural or organisational issues such as IT-investments, SAP- integration, operational property issues, escalators and automatic doors etc., and only 10% on consumer and customer related questions.
Almost no boards have a systematic approach to look into the future, and a process to trace consumer behaviour and priorities. Few boards have a regular tracking of competition and their development.
Many boards confuse Market Position (Hard facts in terms of sales, profit, number of customers, visitors, market shares etc.) and Brand Position (How many know about the brand, top-of-mind and aided, how many like or even love the brand, and would love to recommend it to others, what do they associate with the brand etc.)
Important Strategic questions like expansion into new markets or the entry into new product lines are typically relevant board discussions. Whether there should be fruit baskets in the staff canteen and in the reception, or additional bicycle parking in front of the office are matters that should not occupy the board meetings.
Sometimes there is a lack of pre-sent-out material ahead of board meetings. Sometimes there is a lack of pre-reading and reflections of such material. And in many cases the pre-sent-out material is anyway being presented in the actual meeting, which is just totally wrong.
Many boards lack the forward-looking visionary view of the company, the market, the world in which they are operating. Even though their most basic task is to find, recruit, reward and ultimately replace the CEO, very few boards have a continuously updated shortlist of 1-2 potential CEO’s in their back pocket. Hence they start from zero and often time consuming processes with headhunters, when they actually need to replace the CEO.
Unleash the Power of your Board
Why not change this situation?
Why not make the board as the most important competitive tool. Make sure to recruit and create the best possible board there is in any given market situation, and make sure that you have a better board than your top-competitors.
Select the board members both based upon unique competences, good personalities and networks, age and gender and also a passionate interest for the business you are in. Compose your board as a symphony orchestra with different instruments, or as the ultimate football team with a right proportion of strikers, defenders and hard working team players.
And most important, teach your board how to work AGILE! They need to work on several different topics and routes in parallel, accepting working much faster and fail, and more risky and adventurous. The competitors will, and the world is now turning at a speed you have never seen before.
How Boards could improve?
Forbid board meetings to be boring! Compose board meetings as the optimal party event or discovery trip. Turn them from boring Excel sheets with figures, to cutting edge strategic workshops, where external inspiring speakers could kick-off, perhaps even within a different area only to stimulate creativity and ideas? A priest or an author sharing how they work? A disabled person sharing the daily life challenges? A football coach? Or a business leader within a different category, sharing best practise and worst mistakes? A politician or a diplomat talking about the difficulties with negotiations? A bartender that explains the art of reading people and personalities in the bar? A driver or a bodyguard talking about 20 years of observations in their job? A social worker, teacher or ER- surgeon? What if they could open our minds in a totally different way?
State and repeat the responsibilities between the CEO and the board.
Reflect upon the fact that all retailers now suffering have had 10-20 years of approved business plans and marketing plans, taking them to its current position. Those boards have approved all of them.
Establish a new template agenda for your board meetings that is - optimising the time spent in the meeting. Make the board meetings become so attractive that the best people in the industry will queue-up to be part of them.
In a digital world any board that is not learning how to work AGILE, will experience how the conditions have changed even between each board meeting. A non-agile board becomes irrelevant, and could as well be replaced by one annual, formal meeting including the account auditor, the CEO and the CFO, before filing and submitting the legal documents.
Magnus Brehmer
BRAND POSITIONING & MANAGEMENT
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Market Economist & Rhetorician with 25 years of international experience, as a specialist, manager, coach, teacher and consultant. Magnus has lectured at the IKEA Business College in Delft for many years, and regularly delivers speeches in various forums worldwide.
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