In amongst many nuggets here, the founder/family one chimed with me. A couple of the businesses I've worked with have seen a similar dynamic. The one with the largest impact (In ££) was Matalan. My understanding was that the family connections to their supply base was critical during Covid (when orders had to be cancelled) but there had to be a way to help suppliers stay afloat, and maintain relationships. But...in a tough market, first generation founder skills can leave the business short on options once a certain mass has been achieved. And founders find it hard not to keep coming back in to get rid of CEOs and Commercial Directors who are trying to modernise. As a business grows, it is important that organisational capability rises with it (People, IT, Processes, Distribution/Logistics etc.) Three areas as examples: 1. A lack of investment in systems can leave a business critically hamstrung - something you talked about in last week's omnichannel post. Not being able to move your stock between channels, or know how best to allocate by store and channel can lead to unnecessary out of stocks and extra markdowns, for instance. Or not really having reliable stock figures at all! 2. A lack of investment in people means you can have lots of over-promoted internal colleagues, and lots of long-servers sticking to ways of working that don't look outwards to the customer base. Fresh blood can bring experience that can fast-track wins for customers, colleagues and shareholders. 3. Delivery promises to customers. You have a 3 to 5 day promise you make when your competition is delivering in 1 to 3 days. And maybe that's because you have to wait for overnight IT batch processes, and because your picking of store and online channels is a bit different, or requires a lot more walking in the warehouse that was designed for analogue stores. All of the substantial issues could be faced into by a brilliant Board, but they need to get a wiggle on, particularly as it is fashion, and because that cash outflow is worrying. Great article, thank you for sharing.
In amongst many nuggets here, the founder/family one chimed with me. A couple of the businesses I've worked with have seen a similar dynamic. The one with the largest impact (In ££) was Matalan. My understanding was that the family connections to their supply base was critical during Covid (when orders had to be cancelled) but there had to be a way to help suppliers stay afloat, and maintain relationships. But...in a tough market, first generation founder skills can leave the business short on options once a certain mass has been achieved. And founders find it hard not to keep coming back in to get rid of CEOs and Commercial Directors who are trying to modernise. As a business grows, it is important that organisational capability rises with it (People, IT, Processes, Distribution/Logistics etc.) Three areas as examples: 1. A lack of investment in systems can leave a business critically hamstrung - something you talked about in last week's omnichannel post. Not being able to move your stock between channels, or know how best to allocate by store and channel can lead to unnecessary out of stocks and extra markdowns, for instance. Or not really having reliable stock figures at all! 2. A lack of investment in people means you can have lots of over-promoted internal colleagues, and lots of long-servers sticking to ways of working that don't look outwards to the customer base. Fresh blood can bring experience that can fast-track wins for customers, colleagues and shareholders. 3. Delivery promises to customers. You have a 3 to 5 day promise you make when your competition is delivering in 1 to 3 days. And maybe that's because you have to wait for overnight IT batch processes, and because your picking of store and online channels is a bit different, or requires a lot more walking in the warehouse that was designed for analogue stores. All of the substantial issues could be faced into by a brilliant Board, but they need to get a wiggle on, particularly as it is fashion, and because that cash outflow is worrying. Great article, thank you for sharing.