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Can Management Consultants Revive a Dying Business?

Chris West, Founder of Verbal Identity, offers his take on the state of the high street and House of Fraser, and how struggling businesses will need more than just a management consultant to stay afloat.

 

So, House of Fraser. Tough times, falling revenue, and now calling in the management consultants to cut costs. Inevitable?

Maybe.

But in today’s volatile, uncertain consumer world, is calling in the management consultants alone enough to help a business that has lost its way? Maybe not.

Unfortunately for all the rationalists out there, consumers are multi-dimensional, irrational beings who don’t always respond in a logical way.

So, while management consultants did save one airline a lot of money by recommending that they straighten those little mini croissants you get for breakfast (and so fit more in the pre-flight boxes), they didn’t consider that in the tired, red eyes of the passenger, a straight croissant wasn’t a croissant at all but a charmless bit of flaky pastry.

Saving money sometimes loses customers.

If it’s death today or a few less customers tomorrow, it’s an easy question. But it’s not the right question. That should be: How do we cost-effectively win back our customers by delighting them?

And to answer that, you don’t just need left-brain rationality, you need right-brain creativity too.

My firm’s brand strategists often get confused with management consultants, and I don’t mind that. We stand in the Boardroom and talk about transformation, we work late into the night in client project rooms next door to the ‘real’ consultants, and we often wear crisp white shirts and talk in 2 x 2 matrices. But one of my team also wears odd socks (I’ve never asked him why) and another young colleague took a Law degree and then she followed it with an English Literature degree.

Today’s most forward-looking CEOs understand that the opportunities for future growth are not only about finessing ops, the digital transformation and organisational design. A company’s value in the minds of its customers is dependent on that nuanced thing called ‘brand’ and that’s a mix of the rational and emotive offerings.

In fact, for the majority of our projects in the last 2 years, we’ve worked right alongside traditional management consultants. The CEO has seen the advantages of bringing both brand strategists and management consultants together. Why? It’s because a good CEO has a vision, they have those amazing antennae that pick up what’s happening in the market. But they need to make sure that vision is rigorously executed and crystal clear in the minds of everyone else in the company.

A great business vision is a fragile thing: it will need to be passed from person to person, region to region, across language barriers, across different interests and focuses, to colleagues, suppliers and other partners. Wherever it ends up, it needs to be as crystal clear as the moment the CEO first spoke it.

And that’s the easy bit.

As I walked in to present to the PLC Board of a large British luxury firm this week, one of the Board Members said to me: “So, Chris, now we’ve got the vision, your work’s pretty much done?”

I said, I thought our work was 49% done. The 51% – getting everyone in the company to understand it, feel it and commit to changing their behaviour to align with it – was just starting.

About five years ago, we worked on the relaunch of that famous green welly, the Hunter Boot. The CEO knew that in order to grow his business he needed to transform it from the iconic green welly into a full fashion lifestyle brand. We were brought in to identify the brand’s values and interpret them for a modern, luxury-loving audience. As brand strategists, rather than taking the rational approach to identifying a gap in the market, we looked inside the brand, at its history and the narratives around the kind of people who first wore the boots. This emotionally-driven approach allowed us to codify the DNA of the brand to develop an offering that would feel just as at home on the streets of Mayfair as in the fields of Glastonbury. We managed to distil the essence of the brand down into 11 words. I think they ended up carving them into the wall of one of their meeting rooms.

Only once a company has this kind of brand vision in place, can the management consultants crunch the numbers and apply their reductive approach to ensure the operational side of the business is performing to its fullest potential, whether that’s straightening the croissants or working out the costs of opening a new flagship store.

Efficiency mustn’t compromise brand, for sure. But more importantly, the brand vision ensures efficiency: wouldn’t it be great to know that everyone in your company was working with the same business goals in mind, understanding the same nuances of what is us and what isn’t us, making the right product decisions and the right hiring decisions and that someone new coming into the company could pick that up straight away, rather than 6 months down the line?

With the most recent failures on the high street – House of Fraser, Maplin, Toys ‘R’ Us – it strikes me that none of them had a clear brand vision guiding their operational decisions. For example, Toys ‘R’ Us failed to move with the times and was hampered by its huge, faceless retail outlets that forced it to keep its prices higher than online competitors but did very little to justify the higher prices with an enhanced experience in store. If there was a unique Toys ‘R’ Us experience when I visited one of their stores, it was that it was noisier, dirtier and more cluttered than any other store I’d visited. At that moment, resolutely cutting costs has made decline almost inevitable.

Is there any hope for the struggling House of Fraser? It faces fierce competition from the forward-thinking fashion stores, with a more on trend range, a happier shopping experience, and even the online offer of ‘order now, get it in 90 minutes’ technology. Simply bringing in management consultants to cut costs will only delay its deterioration. Ruthless cost-cutting will likely mean a lack of investment in the store fabric, no staff training, a significant reduction of SKUs to avoid inventory issues, and where they can get away with it, inflated prices. Without a convincing brand vision, the shop will become a destination for everything and nothing.

To revive a flagging business, the focus needs to be on more than just hard values and data. Instead of streamlining processes and diminishing costs, what House of Fraser needs is a guiding brand vision for who they are and what they stand for. This will keep the business aligned internally and create value in the mind of its customers.

I don’t believe disaster on the High Street is inevitable. It’s certainly not desirable. It represents a huge shock to the people that work in the stores and huge impact on their family life.

So, I hope that before the management consultants start to calculate hard values, someone looks at the strengths of the company’s brand and its offering to its customers. It’s the articulation of these strengths, clarity on that essential vision, that will ultimately guide management consultants to produce the best solutions for the brand.

 

Website: http://www.verbalidentity.com/

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