Digital and the Evolution of the Board

We're delighted to have this guest post from one of our favourite ambassadors; Gabrielle Hase. Read Gabrielle's thoughts about the changing nature of the board given the growing importance of ecommerce within retailers. Are you and your board ready for this?

Traditional retail Boards and management teams as we know them are dying, and not a moment too soon. Retailers have witnessed their entire business model changing in front of their very eyes, led by the digital consumer demanding more choice, better value and superior service.  But while their model is changing, leadership at the top isn’t keeping up. 

In order to stay competitive and relevant, brands and retailers are (slowly) responding to the change by increasing their investment in technology and hiring in more specific digital skills and in some cases, structurally realigning the teams to support a single customer view. But the Board remains static, with little digital skill and experience represented around the table.  Almost every retailer has stated that their key growth strategies lie in multichannel initiatives, and yet many Boards don’t have the expertise to appropriately support those strategies.

And no, having your Ecommerce Director on the Board isn’t enough. It’s certainly a step in the right direction, but it’s just that – a step.  

From a governance perspective, who is providing the ‘due diligence’ on the ever-larger investment cases put forward by the Ecomm or Multichannel Director?  I’ve seen (too many times to count) investment cases for technology projects put forward, approved and which subsequently failed.  This puts a real fear into the Board who doesn’t want to see the same thing happen again, and quite rightly, but if the right questions were asked at the time, risks could have been appropriately managed. I’d never buy a car without an expert advising me; on a broader scale the same holds true for Boards.  Who is managing the risk?  Without the right questions being asked, the business is exposed.

Being the senior-most digital expert in any business can be a lonely job, as I’ve heard from many of my ecommerce colleagues. Not only is this person educating the rest of the business about what the business model(s) need to look like, or evolve towards, but they are often at times doing it with no commensurate outside support from the Board.  Who can they learn from? Who can they go to for a gut-check?  Who can they use to help manage expectations?  In too many cases, there is no one.  

The digital Non Exec offers more than just subject matter expertise, however.  They demonstrate a thorough understanding of what digital means to today’s consumer, and how this translates into an omni-channel view.  Improvements in technology and the analytics that result offer much greater insight into who the customer is as a whole, and how the organization needs to react in order to gain market share and stay competitive. 

So who is this digital beast? I’ll tell you who they most commonly aren’t:  a retired, white male CEO with a portfolio career.  The speed at which technology evolves means that the tried and true retail business models are being broken apart and reformed in completely new ways, but those who are closest to those changes stand the best chance of asking the right questions and providing timely knowledge.

There are some retail boards that demonstrate this new way of thinking.  Two years ago, Debenhams appointed Peter Fitzgerald, a Google Director in his early forties as an independent non-exec director to help develop their multichannel strategy.  More recently, Martin Newman, founder of Practicology, a leading ecommerce consultancy, sits on several boards, including his most recent appointment on clothing retailer White Stuff as an independent non-exec.  Martin, too, fits the description of digital pioneer – in his forties and having worked with a broad cross section of retailers in developing their digital strategies. 
 
So what should a retailer do now?
Start by looking at your Board makeup. Who around the table represents the customer?  Again, a shocking number of times I’ve done this and only ever seen the exec Board team and a bunch of Private Equity reps, and not one independent non exec who is the voice of the customer.

Now, who can provide the most insight, guidance and direction regarding digital investments as a whole?  Hire an independent non executive director who has a proven track record in implementing digital programmes across a variety of channels – in-store, online, customer service;

Don’t worry about their title as much as their experience (many people running ecommerce teams at the Head of or Director level are in essence running their own business units within a larger organization, and have a much greater perspective of overall business drivers than traditional siloed functional experts).

Make sure they know how to bridge the linguistic gap between traditional retail perspectives and the new way of doing things – building consensus and educating the board is a big part of any Non Exec’s job and never more so than in the world of digital.  

The retail evolution is happening at a rapid pace. Retailers who have adjusted their understanding about the skills they need in leadership positions are the ones taking the lead.

Are you ready for this new direction?

About the author: Gabrielle Hase is a non-executive director of Tate Enterprises, the commercial arm of Tate Galleries.  She is the founder of Soleberry Advisory, a consultancy that helps investors and retailers develop and execute their multichannel and ecommerce strategies.  Recent clients include L.K. Bennett, Hobbs, The Fragrance Shop, Toast and Browns Fashion.