Retail has faced many curveballs over the past two years. There will be more to come. The business outlook remains highly uncertain, with supply chain and workforce disruption in particular keeping leaders awake at night.
Boardrooms are having to get used to a period of significant and rapid change, with no obvious end in sight. As such, the challenges their businesses face look very different than they did even a few years ago.
In fact, it’s not really enough to just focus on running a retail business anymore. Leaders now have to consider, understand, and make educated predictions about a range of issues that go above and beyond their traditional remit — from foreign affairs to environmental factors to public policy and social issues.
What’s more, they are contending with a pace of change that hasn’t been seen in a generation. The level of business uncertainty created by the pandemic put retailers into a constant state of “response mode”. There wasn’t time to debate business decisions at length — it was a case of “just do it” in the face of each new disruption.
But in the years since, this fast and furious pace of change hasn’t slowed. Consider how quickly consumer priorities and behaviors have evolved this year. Until recently, concerns over personal health eclipsed economic worries in the minds of consumers.
Now, more people are concerned about their finances — a significant turnaround from last year. In fact, a huge 80% of consumers place inflation and the cost of living at the top of their economic concerns.
At the same time, companies need to reset their workforce models for a labor market that looks very different to a few years ago. Meeting the evolving expectations of customers and employees demands a significantly more adaptive workforce — one that is digital, empowered, flexible, and diverse.
Retailers also need to explore new ways to serve the consumer as the emergence of new technologies and new channels drive rapid advances in automation and consumer personalization.
The metaverse, for example, is a fertile space for retail to explore. But it requires a culture of tech-savvy experimentation and consumer-led innovation — qualities that many businesses still need to strengthen.
What does all this complex change mean for retail leaders? It calls for a new kind of CEO skillset—a passionate, entrepreneurial style of leadership combined with an innovative ‘outside-in’ mindset to boost growth.
This new breed of leaders will be mission-oriented, focused on delivering specific goals rather than general management. They’ll also have to operate in dual mode, focusing on the business and operations on the one hand, while paying close attention to the macro level (consumers, geopolitics, climate change, etc.) on the other.
For these reasons, we should expect to see the next generation of retail leaders drawn from a broader range of backgrounds — fields such as venture capital, serial entrepreneurship, and law.
This new blood will need to be passionate about the purpose of their brands and relentlessly focused on related issues like sustainability. They’ll need to be data-driven and collaborative, thinking beyond just defining a business vision and instead looking to inspire employees and customers alike with an outward-looking sprit of entrepreneurialism.
They will also need to move away from the traditional “command and control” approach and start running the business in a more facilitative and enabling way. That means cultivating an environment of “constant reset”, continuously questioning, learning, and reinventing business practices.
It also means understanding the importance of taking considered risks, while simultaneously protecting the core business. That’s no easy ask. Leaders need to be as focused on deep analysis and purposeful decision-making as the previous generation was on drive and expression.
More than anything, as five big forces continue to sweep through all industries—the metaverse, changes in talent, technology, sustainability and business reinvention—the next generation of leaders will be the ones creating businesses that can sense, shape and respond to market conditions in close to real time.
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