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OPINIONTechnology

Three Keys for Mastering Innovation

Retailers are overwhelmed when grappling to keep up with the pace of change, yet they mustn’t let up
Photograph: Shutterstock

As anyone who attended CES or NRF in the opening weeks of this year can attest, tech-fueled innovation is speeding up. We see robots everywhere: digital video capabilities that are poised to transform brick and mortar store operations, automated delivery vehicles and far more. Traditional retailers are fast becoming overwhelmed.

I’ve spoken with a number of top 25 retailers and some of the largest wholesalers in the past few weeks, and each one of them is slammed, unable to even think about looking at another project, and are effectively saying the same thing: “We have too much on our plate now; let’s revisit this in a few months.”

And what happens in a few months? It gets pushed back again. Retailers, even large ones, are already tapped out trying to keep up with new innovation, and yet we’re just getting started.

This pace of change and disruption is enough to make retailers become apoplectic with frustration that they can’t keep up. And yet they must. In a world of exponential technology growth, tomorrow no longer resembles today.

But here’s the bigger problem: Retailers are trying, and many of them are creating new positions, new departments and new business units charged with leading their companies' innovation initiatives. But retailers remain stuck in a linear world with how they think about and deploy new capabilities.

Inevitably, retailers focus on the “what”—and by focusing on what specific solutions they need to learn about and implement, are quickly overwhelmed, leading to the inevitable “Let’s come back to this in a few months because we’re too busy” syndrome. In today’s world, there is always going to be another capability coming along, and at a faster and faster pace.

Instead, senior executives should be focused on understanding the “why,” to understand that this ever-growing pace of innovation is a result of the exponential growth of technology. And with that realization, they should focus on adapting their organizations to succeed in this new world. In a time of exponential growth, moving too slowly can mean being left behind and unable to catch up.

Scott Emmons, former head of innovation for Neiman Marcus, tells it like it is: “I can say with confidence that traditional players in the U.S. and abroad are not innovating the right way. Processes are broken, execution is too slow, politics stalls decision-making and resources are too scarce.”

Here are three things retailers can do:

1. Manage Innovation as a Process

Think about what happens today. Retailers go to trade shows or rely on their share groups to learn about new innovation. While all good, this approach provides a very limited view of new capabilities.

Some larger retailers will set up their own innovation labs, at times partnering with universities or tech incubators; Target’s partnership with Tech Stars is a good example. While not a bad idea, this approach suffers from providing the retailer a biased and limited view of new capabilities.

In a world in which hundreds, or even thousands, of new solutions and capabilities are flooding into the retail industry each year, those approaches simply are not enough. The first challenge for retailers is gaining awareness and education around of all these new capabilities.

One new approach, quickly becoming a best practice, is offered by Retail Tomorrow (a part of GMDC). The group works with a retailer’s executive team to understand specific areas of challenge, interest or opportunity, and then curates the most appropriate cutting-edge solutions sourced from around the world, to come together with the retailer’s team for a day of education. Innovation happens inside those conversations.

2. Develop an Innovation Culture

A few months back, Amazon released its quarterly results. Looking past the financial information, Amazon announced 42 major product and service releases in that three-month period. Yes, that’s 42 major product announcements in three months. The average retailer is overwhelmed by making one major product or service announcement in that time.

Most every retailer today understands the importance of technology-fueled innovation. But to break through the growing logjam of new innovative capabilities, retailers must create a culture of innovation. And this starts at the senior executive team level.

Retail executives must shatter the old “We can’t do that” or “We’ve always done it this way” thinking if they have a hope of surviving in this new age of innovation. Denny’s (yes, that Denny’s) regularly brings in students, and people outside their industry, to meet with the executive team, all in pursuit of shaking up staid thinking. Innovation doesn’t just happen; you have to work at it.

3. Make Your Organization Agile

Agile is a project management philosophy often used in software development. It's characterized by dividing tasks into short phases of work, and frequent communication to reassess and continuously adapt.

The Agile movement is increasingly being applied to organizations as a way to help companies adapt and succeed in the new world of ever-faster change and disruption. The easy way to think about this is to consider the traditional organization as a machine that is very structured and process-driven. And, like most machines, it performs well when applied to a given task or job but quickly breaks down when used for something else. A tractor works fine in the field but doesn’t do too well on a racetrack.

The new paradigm is to consider the organization like a living organism, able to quickly respond to its environment. Amazon is a great example of this, able to innovate quickly across many disparate areas to bring new products and services to market fast. And Amazon is transferring that agile philosophy to Whole Foods.

About the author: Gary Hawkins is the founder and CEO of the Center for Advancing Retail & Technology (CART) and leverages his unique knowledge and view to new technologies to shape the future of FMCG retail. He can be reached at gary.hawkins@advancingretail.org.

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