Why ‘Operational Excellence’ is the New Brand in Retail

Article by Martyn Jones | 11th March 2020

Back in Q4 of 2019 our HR work-culture vulture Heidi Asbury arranged a little company tai chi.

We were also lucky enough to hear the thoughts of Matthew Phelan, Head of Global Happiness at The Happiness Index. What a job title—no pressure, Matthew.

Matthew introduced to us a concept that stuck with me—brand = culture and culture = brand’, Literally.

The idea being that the company culture that’s in operation, in effect, is your brand—not the smoke and mirrors you place in the shop window. Retail today could benefit from this kind of thinking.

You are what you do…
‘Operational excellence’ as a competitive strategy

The best definition I’ve come across unpacking operational excellence goes something like this…

Operational excellence is achieved when everyone in an organisation sees and understands the flow of value to the customer, and is able to quickly and easily fix that flow of value when it breaks down.

For me, this is the essence of ‘operational excellence’ at its most elegant. Though don’t be fooled—behind the simplicity there are complex factors to get right and rigid processes that need to be nailed-on for operational excellence to even become remotely possible.

Tech startup resource providers, MaRS outline an operational excellence oriented strategy as aiming to accomplish cost leadership where…

“the main focus centres on automating manufacturing processes and work procedures in order to streamline operations and reduce cost. The strategy lends itself to high-volume, transaction-oriented and standardised production that has little need for much differentiation.”

The take away here is ‘efficiency‘.

Standard issue, right? No major surprises and this all sounds like business 101. So how, then, can ‘operational excellence’ be repurposed from a back-end strategy of operations into a front-end brand strategy you can rest your forward momentum against—in a way that connects positively with the customer perception?

Actions speak louder than words…
Operational excellence’ as brand strategy

One of the biggest problems of branding today is how distant it has become from truth and fact.

Branding was once something you physically marked something with—might be a cask, barrel or crate—as a sign of the quality of its content. A process of direct relationships between what’s suggested, and the reality of ‘what’s inside’.

This broke down sometime around the 1950s when the madmen of Madison Avenue started advertising against a backdrop of lifestyle associations they wanted people to make with products, rather than the objective function and value of the product itself.

For today’s retail brands, with customers so closely in-tune with what companies are actually up to, smoke and mirrors will get discovered sooner or later—it’s all about integrity. Of process, of deliverables and of perception.

In the eye of the beholder…

The ‘culture = brand‘ concept centres around the idea that today’s information-rich customers have more access to the inner workings of the companies they interact with and that, more and more, those companies have a paramount incentive to create operational cultures that those customers endorse and can associate with—this is the mechanism in ‘ops excellence is brand’ by which brand value can increase.

To say ‘operational excellence is the new brand’ isn’t revolutionary—it’s effectively the realisation that we’ve pulled branding too far away from a point where the actions match the words and need to anchor it back into that relationship of integrity where the promise matches the reality.

In retail, this translates to two tings…

Empowering the workforce.

If operational excellence is a measure of how well value is flowing to the customer, then it makes sense that there should be a high level of independence and agility within the workforce and its component teams. Operations are only as strong as the weakest link—and things break. Individuals and teams need to be able to get things back on the rails without having to park the bus, or wait for intervention from a manager or supervisor.

Equip the workforce with a robust means of communication and collaboration and you remove the potential for costly delay and breakdown in process. With the right comms infrastructure, teams are able to knowledge-share, stay agile and get things back up and running quickly so that the flow of value continues to flow to the customer.

Empowering customers.

Operations that extend from out-of-sight processes and into stores are also affected by the customer interaction—when retail helps customers help themselves through ‘self-serve’ incentives, they empower customers to take partial control of the operational flow of value, right at the last step of service delivery.

Get this right and you’ve nailed the golden moment where all the cumulative efforts of operations deliver against customer expectation.

Ops excellence in ‘future of retail’ won’t be optional

The retail brands that will accelerate away from the pack will do so because they will have integrated an ‘operational excellence is brand’ approach that will underpin most aspects of business operations—from how quickly the scanning of goods is performed at scale and average customer query response times, to planogram compliance, theft and shrinkage.

A future of retail is emerging where technology becomes the primary currency for solving critical operational challenges in bespoke ways.

Innovations coming out of retail tech vendors such as us are producing brilliant solutions to these problems and it’s up to retailers to realise and harness their potential. The answers are out there, it’s simply a case of finding the right answer to the questions your ops pinch points are asking.

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