Retail veterans soon 'past their sell-by date'
Retailers might think that they have the best executives sitting in their boardrooms, but nine out of ten boards will be ‘past their sell-by date’ in five years’ time, an industry report is warning.
It asserts that today’s grey-haired male chief executives and non-executives may need to make way soon for some younger, more technologically-savvy types from a range of industries. They are the retail dinosaurs that face extinction.
Steve Baggi, head of retail practice at Green Park, which prepared the report for this week’s World Retail Congress in Rome, said that the retail industry had a “poor self-perception of talent management” compared with other sectors and “urgently needs to address the skills gap of its future leaders”.
The publication of the report, which surveyed senior executives and HR directors from about 50 top retailers, comes after a turbulent period for British retail.
Tesco got its strategy all wrong
One senior board member of a well-known retailer said: “Tesco clearly got carried away by its own hubris and it had a confident, strong management team who became quite aggressive in everything they did. That was clearly difficult for a board of non-executives to rein in.”
Many decisions taken by Tesco, including one to rapidly expand its store estate at a time when the internet retailing revolution was gaining ground, are now having to be unwound at huge cost to the company and shareholders.
Peter Williams, the chairman of Boohoo.com, who participated in the survey, said that the rise of internet shopping was the biggest challenge facing all retail companies: “For many years, retailing didn’t change. Then the internet came on the scene and that has just driven a coach and horses straight through it – and retailers have been slow to respond.”
“I think it is fair to say that some [of the boards of the] mature retailers were caught napping. Some boards have also underestimated the scale of change and it is only going to get bigger yet.”
Mr Williams said young shoppers ages 15 to 25 in Britain had only ever grown up with the internet and online shopping, ‘a fascinating dynamic’ that executives in boardrooms had yet to fully understand.
Get people from Google and Facebook
He said all retailers should have at least one young person on a board: “Retailing has changed already and is going to continue to change. There must be at least one person 40 years, or even under 30, who is technologically and digitally minded. They don’t even have to be working in retail, they could come from somewhere like Google or Facebook. You have to have this as you are just not going to find someone of my age who is as steeped in this new world as they are.”
Mr Baggi said that retailers needed to have a “Far more open-minded approach to recruiting talent from outside retailing and abroad. There needs to be a clear understanding that younger generations have different values and behaviours and that appreciation of this is not only crucial to talent retention and development but also to understanding future customer behaviour.”