Opinion: Can strategy hires drive transformation at M&S and John Lewis?

No comments

In the course of two days, two of retail’s biggest and most challenged names appointed strategy directors as they seek to transform themselves and tap into tomorrow’s world.

At the John Lewis Partnership, former managing director of connected home specialist Hive, Nina Bhatia, has been named strategy and commercial development director. She joins the new executive board as Dame Sharon White takes over the embattled department store and grocery business.

At Marks & Spencer, former Dixons Carphone UK and Ireland chief executive Katie Bickerstaffe swapped a non-executive role for a hands-on position as chief strategy and transformation director.

“Some might say surely it is the chief executive’s job to decide strategy… but there is benefit in having another director purely focused on the shape of things to come”

Each retailer should benefit from increased strategic focus as they adapt in difficult circumstances and be able to maintain a clearer line of sight on exactly how quickly and radically the world is transforming.

The John Lewis Partnership was forward-thinking when it fearlessly invested to build multichannel operations, at a time when financial constraints or insufficient agility meant other retailers could not or would not.

As an investor in its soon-to-be-former partner Ocado, it had a stake in what has become one of the UK’s foremost technology and retail businesses. But Waitrose has now been left to build its own online business after M&S swooped on Ocado, while the eponymous department store arm has arguably become a bit of an ‘Argos for the middle class’.

At M&S, the Ocado deal might have happened much earlier had there been more thought, driven by a strategy director, about how the future might play out. And might it also have bought online fashion rival Asos? The deals would have opened new markets and new channels that M&S is now making up ground on. Ironically, the market cap of Ocado is now greater than that of M&S.

Execution, energy and focus

Future gazing is the reverse side of the coin of execution, which demands just as much energy and focus. And at both Hive and Dixons Carphone, expectations about how the future might play out didn’t altogether go as planned.

In August, Hive owner Centrica’s chief executive Iain Conn, who had once anticipated that the company’s smart home services would be notching up sales of £1bn by 2022, said they were likely only to be 20% of that.

Dixons Carphone, created through the merger of the eponymous electricals and mobile phone retailers and envisaged as a beneficiary of an expected connected life bonanza, also ended up disappointing. When current chief executive Alex Baldock took over, he maintained that post-merger integration of Dixons and Carphone Warehouse was only “part-done” and execution had been “uneven”.

“Bickerstaffe’s experience has prompted some to point out that her move positions her in any succession planning at the top of M&S”

Some might say surely it is the chief executive’s job to decide strategy. Of course, the CEO might give a yea or nay, but the demands of ensuring delivery of business promise, dealing with investors and a hundred things in between show why there is benefit in having another director purely focused on the shape of things to come.

At M&S, for instance, the first plank of recovery is ‘restoring the basics’. That’s unfinished business, certainly as far as the clothing division is concerned, and demands time and attention now. But the future can’t be put on hold because of the day-to-day.

The role is not new – Bickerstaffe’s predecessor Melanie Smith moved over to run Ocado Retail. However, Bickerstaffe’s experience as a chief executive of big businesses has prompted some to point out that her move positions her in any succession planning at the top of M&S.

Cultural revolution

Deep thought and the resulting smart ideas and initiatives are invaluable in business. But they’re not all that matters. Management guru Peter Drucker argued – and many agree – that “culture eats strategy for breakfast”.

M&S is in the midst of a deep cultural shift that chair Archie Norman has frequently cited as one of the retailer’s constraints, and it’s hard not to conclude that at JLP a cultural revolution is on the cards as seasoned bosses leave en masse.

But if each can retain what was great about their respective cultures, while jettisoning the hidebound, greater strategic weight would come into its own.