Great leaders are charged with a certain measure of fearlessness. Your job is to keep the organization moving forward despite doubts and insecurities. There is, however, one phrase that leaders should be wary of: “We’ve always done it this way.” 

For organizations aiming to transform, adaptability and curiosity are critical to create and maintain lasting change. Yet many leaders are trapped in what Dartmouth Professor Sydney Finkelstein calls a “legacy mindset,” relying on behaviors that delivered previous success as the foundation for future action. In his book Why Smart Executives Fail, Finkelstein states that failures to transform are caused by “flawed executive mindsets that throw off a company’s perception of reality” and “delusional attitudes that keep this inaccurate reality in place.” In other words, a leader’s mindset is contagious.

At one end of the spectrum, heavily closed-minded leaders can often get stuck in their ways. This mentality of sticking to the tried and true doesn’t allow room to grow and expand. On the flip side, leaders who are too open-ended may stray from their primary goals and objectives, as their focus tends to shift too rapidly. A healthy balance between structural consistency and curiosity is critical for developing a constantly-evolving company.

So, before you jump headlong into a complex multi-year transformational initiative, first make sure you and your team have embraced these key tenets of the transformation mindset.

Leaders Should Lead

Effective and efficient organizational change comes from the top down, even if the idea of grassroots transformation seems like a rosy prospect. The best transformational leaders are inspirational, stimulate the intellect of their teams, and take the individual into account as part of the greater whole. Efficient leaders set clear and progressive goals, develop harmonious teams with a variety of strengths, and make audacious yet calculated decisions.

Leadership competence is a combination of mindset, values, and integrity, and their thoughts and behaviors have a direct impact on the job performance of their staff, a crucial factor in any significant initiative. It’s important not to take an authoritarian or rigid hierarchical approach, which quickly loses support from the organization when it matters most.

If consistent improvement is the end goal, change is inevitable. A leader who is reluctant to change resists development and opportunities to advance as a whole, but one who embraces change can flow with the process and find a better solution. While all the data, algorithms, and tools may suggest a particular resolution or outcome, it’s ultimately the leader's role to make an informed and optimal decision.

People Come First

When leaders think about investing in technology, they should first think about investing in the people who can make that technology useful. The most sophisticated technologies in the world are useless without humans, and we can lean on our incredible ability to adapt and reskill to augment work with better tools. Where does that mindset come from? See: Leaders Should Lead.

Companies are often seen as  “just a brand,” logo, or product. Shifting that perspective to consider a company as the people who comprise it helps us fully appreciate it for the people creating its products. This mentality allows for a more seamless flow of ideas—from leaders to teams to consumers. With people in mind, consider how decisions might affect their workflow, attitudes, and productivity.

Change Is a Soft Skill

Change is a soft skill. It might sound paradoxical, but the skills most needed to implement technological change don’t come from a formal engineering or computer science education. Instead, they emerge from nurturing an intrinsic sense of curiosity that drives people to continue learning even after their hard skills have become outdated. Technical competence changes with technology, but intellectual curiosity is forever. When building teams, invest in people who are naturally curious and flexible, to begin with. Find those who ask “why not” when evaluating alternative solutions—those who aren’t afraid to challenge established norms.

In retail, the burden of maximum productivity often comes with a rigid structure that prioritizes short-term profit at the expense of long-term gains. Since curiosity is the core of reinvention, it’s best to let it flow freely within the boundaries of a data-informed assortment plan.

Data in All Things

In a transformational phase, data should be the guideposts by which all decisions are validated. Without empirical evidence supporting your initiatives, you may quickly lose sight of why you started in the first place. 

Digital tools can help streamline the process of developing lasting solutions by analyzing patterns, making rapid calculations, and computing algorithms. However, data alone can’t paint the entire picture. More than AI or machine learning, your biggest decision-making advantage will come from building a team with the wisdom to differentiate between valuable data and distractions, the skills to translate that data into insights, and the ability to act on those insights. Data without insights is trivial, and insights without execution are pointless.

"Transitioning to a consumer obsessed strategy backed by the kind of data and analytics that, currently, only MakerSights provides is not going to happen overnight, but one brands need to make, both for the business and to meet critical sustainability goals. It requires vision to make that transformational step throughout the organization and you have to fully commit to letting data inform decisions to appreciate how the workload balance shifts. Done correctly, taking a data-led approach to product development and assortment management leads to significant benefits, achievable with a net reduction in work.” – Tim Janaway, the former GM of Outdoor & Golf at Adidas

Position Your Assortments for Success with Consumer Data

The retail industry is especially hindered by the “same-old same-old” approaches to product development, marketing, and sales. Modern brands will not be able to compete by relying upon gut instincts and historical sales data alone. Brands must become more future-focused and center their development around consumers’ needs and desires. 

Each milestone decision should be informed by consumer data specific to your company and products. To accomplish this, retailers should survey consumers at each of the following stages of product creation and merchandising:

• Prior to the GMs and senior executives developing the strategic plan for the season:
  run competitive tests or test mood boards with consumers to set the design direction.
  
  
• Before samples are made: test new styles, designs, prints, patterns, fabrics, and more using sketches or 3D CAD models.
  
  
• Ahead of finalizing your assortment: use sample photography to mimic an eCommerce experience to test the assortment in its entirety—core products, carryovers with color-ups, and newness. This helps to ensure your newness works well with your core/carryover and that there are no redundant SKUs that fail to add value to the assortment. It’s crucial to use this information to cut the long tail, eliminate cannibalizing SKUs, and deliver an efficient assortment with optimal SKU productivity.
  
  
• During the Investment Review phase: run a consumer demand test against your sales plan to ensure you’re buying the appropriate quantity of each item. The results from this test will help you strike the right inventory balance—curbing overproduction while mitigating challenges associated with shortages due to supply chain issues or inaccurate demand predictions.

Conclusion 

As clear as these guidelines are, we can file all of this advice squarely under “easier said than done.” But the scale of the challenge does not make it any less essential to the sustained success of your assortments and brand as a whole. 

While technological brilliance and strategic acumen are undoubtedly helpful in organizational transformation, creating the right atmosphere where cross-functional teams can thrive is vital. After you lay the foundation of shared goals and values and ensure it's supported by a top-down prioritization of data-informed decisions, you can effectively transform your product creation and merchandising processes. 

At the end of the day, no digital tool can replace an individual’s rational thought or the complexity of a strong-minded group of originals. But brands can no longer compete without leveraging the right technology and consumer data.  

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