With the new year more than a month old, we continue to see changes take place in our industry. Many of these changes have not been good. More retailers have announced company closures since the holidays. Others have announced large scale personnel and budget reductions in an attempt to reduce costs and maintain profitability. Yet many are still determining the results of their holiday season and how it will affect this year’s operations.Change is inevitable, whether it be good or bad. Rather than become victims of change, we as loss prevention professionals must not only accept change, but look forward to how we can work beyond the challenges, limitations and uncertainties of tomorrow.
Recently, I read an interview in The Wall Street Journal with Clayton M. Christensen, the co-author of The Innovator’s Dilemma and The Innovator’s Solution. A Harvard Business School professor, Christensen was interviewed by MIT Sloan Management Review on the economy and its predicted effect on the future development of products, technologies and corporate growth. In the interview, Christensen discussed how troubled times breed innovation. To quote him, “Breakthrough innovations come when tension is greatest and the resources are limited. That’s when people are actually a lot more open to rethinking the fundamental way they do business.”
In The Innovator’s Dilemma, Christensen discusses various theories and concepts of innovation. Throughout the book, he provides numerous examples of how companies created market share, developed disruptive technologies and altered their products, technologies and marketing strategies to create better results. Although written primarily for product development, many of his concepts focus on the need for an organization to foresee change and proactively create ideas and strategies, rather than wait for the change and react. The theories can easily be applied to improve an existing process or program or develop a new approach to obtain improved results.
As some of us begin this year faced with budget restrictions, fewer resources and expectations to – at the minimum – provide the same results, we may react by holding on and trying to maintain or sustain throughout the year. After reading Christensen’s interview and recalling the theories in his books, I thought: what better time than now to look upon innovation in our industry. We are all being challenged, retailer and vendor partner alike, with changes taking place in the economy, our industry and our individual companies. What may have provided great results yesterday more than likely may not provide good results today.
Now is the time to look forward and reassess your current programs, technologies and processes. Think how you may be able to create an approach to help you manage the challenges and changes ahead. Brainstorm with your team how you currently use technology, how you collect data and how you use your data. How might you be able to use them differently to achieve your goals and objectives? For example:
Technology
Are you using your technology’s full capabilities? Is there a feature or functionality you have not used? Spend some time to see if there are areas within your technologies that you have not yet utilized. Talk to your vendor partner to learn how others are using that feature or functionality. Why did the vendor create it and how are others using it? What results might its use bring you?
Could there be another department that could benefit from your technology? Make a resolution to introduce your technology to at least one new department. Work in partnership with them to see how it may benefit them and the company as a whole. Ask them to show you a technology they utilize – perhaps you can find an innovation in their tool. Technologies are a great resource in helping to develop new approaches and innovative ideas.
Data
Look at the data you collect through your programs and the use of your technologies. Are you analyzing all your data in support of your program? Are you looking at your data from a true business profitability standpoint and not just a loss prevention standpoint? Do you share your data with other departments or compile shared data to see what collectively it may provide the company?
Recently, I spoke to a loss prevention team that shares data with their merchandising team to compare buying reports with known theft reports and shrink results. Collectively, they look for buying patterns that may indicate losses and shrink issues before inventories are even conducted.
Benchmarking
Do you benchmark? I hope so. Benchmarking your data either internally or with others in the industry can be very powerful. You can always expect a CFO or another C-level executive to ask how you compare with the industry. Brainstorm with your team on how the data could be used to create internal benchmarking beyond what you are doing today. Research the availability of other benchmarking tools out in the industry or join a group to be able to provide a more complete picture of the industry. Use these results to establish your internal benchmarks.
There is no doubt that this year will be a challenging one for all. Those that are looking for new ideas and “innovations” will be those that are most successful in the year ahead. Maintain and sustain cannot be in our vocabulary – this year, think innovation!
Interested in hearing from you. If you have a new approach to how you are handling the challenges ahead or a new use of a technology, data or analytics please email me at djohnston@lpinnovations.com. I welcome your thoughts, ideas or suggestions.