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Are Retailers Standing On The Proverbial ‘Burning Platform’?

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In 2011, mobile phone manufacturer Nokia’s then-CEO Stephen Elop sent a letter to the company’s employees. Here’s what he wrote:


“There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters into the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a ‘burning platform’ caused a radical change in his behavior.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behavior.”

The shorthand that books on “change management” use to quickly get to the punchline is that,  “there’s nothing like being on a burning platform to get the mind focused.” In the face of disruptions brought on by the COVID-19 pandemic, retailers must ask themselves, “are we standing on a burning platform?”

The reason this came up today is because I was asked the question in a follow-up to an NRF NXT webinar that I participated in with Jim Barnes, the CEO of Envista. The webinar was entitled “Omnichannel Agility – Maximizing Customer Service And Profitability”, and it focused on omni-channel order orchestration. Jim’s main point, to which I wholeheartedly agree, is that the nexus of retail selling processes is omnichannel order management (or “order orchestration”, as some call it). The idea is that how and where demand and supply “meet” is dynamic and has to be driven by processes that find the best way to fill a customer order based on the customer’s service expectations that also maximizes per-order profitability. “The store” may play a part in this process, but it may not be the center of activity – or in some cases even necessary.

The question I was asked was, “how will retailers adapt to a post-pandemic world? Is the environment today more of a catalyst after seeing long-time established retailers closing up shop? In reality, it was a long chain of events and not being able to adapt to the environment that caused them to eventually bottom out!”

Well, right! At RSR, we’re been trying to emphasize that virtually every one of the needed changes that retailers now regard as urgent were important before. For example, in a benchmark study sponsored by LLamasoft on the case for an AI-enabled supply chain that we conducted in June 2020, we wrote:

“The challenges highlighted by the pandemic are not new, only made more urgent. It has taken retailers more than a decade to absorb changes in the customer-facing demand side of their businesses. On the supply side, most retailers have only recently begun to make the changes necessary to offer more localized and relevant value in the stores, to offer new direct-to-consumer options, and to be able to respond quickly to sudden changes in demand.”

That’s a nice way of saying, “your platform is on fire!”, or in other words, how retailers have been matching demand with supply in the past is not going to help them much in this time of constant disruption.

We’re not in a post-pandemic world – we’re still in the heart of it. And it’s entirely likely that we’ll be living in a state of continuous disruption for some time to come. Assuming that the pandemic can be beaten back, the world economy still has to deal with an increasingly fractious global trade environment, weakened economies, political and social disruption, and the big cloud of global warming just over the horizon. What that means is that businesses everywhere (not just retailers) have got to get focused on redesigning their go-to-market strategies around agile responsiveness to rapidly changing conditions, and then figure out how to do that efficiently.

That is very different to how RSR has seen businesses address today’s market challenges, by trying to make existing processes more agile without destroying their efficiency. That isn’t going to work – new thinking is required. But it’s not all doom-and-gloom! There’s lots of good news on the technology front, and some retailers really have figured out a path forward.

One thing is clear, however. Operators shouldn’t be fiddling with the controls if the platform is on fire. It’s time to jump into the water.

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Newsletter Articles July 21, 2020
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