What would happen if there were no wild cats in the Sundarbans or the Serengeti? Nothing would survive, because the deer would have eaten out all the grass and vegetation.
And,
Rainforests form a complex ecosystem that is the home to millions of species of both plants and animals. Rainforests cover less than 7% of the Earth’s land surface. However, they are the natural habitat of more than 50% of all the species of living organisms known to mankind. Scientists would expect millions more to exist especially in the rainforests. The Amazon Forest, as a typical rainforest, is no exception. One tree in the Amazon Forest might contain more species of ants than the entire United Kingdom.(source: Wikipedia)
The nature of the rain ecosystem is the following
1. Interdependence
2. Co-existence
3. Non-redundancy (nothing ever stays in the rain forest ecosystem that should not be there. Would we find polar bears in the rain forest?)
4. Ruthless Regeneration (the forest is ruthless to the weak and mild. Only the strongest and smartest can survive. Do you find maimed tigers, or blind lizards in the forest?)
5. It is fragile but evolving.
6. Evolution - It does only what is collectively needed. The direction of evolution is always only that of the collective need. (Deer will not fatten because the tiger wants more meat!)
Look around yourselves, and you will see an ecosystem everywhere. When jobs are lost, fewer drivers are employed. When real estate goes into recessions, fewer masons earn their daily wages, less spend on apparel, and clothing factories lay off workers, and so on.
Hence the realisation that the Eco-System is what we live in, is important in everything we do; affected by our thinking, words and deeds. We are dependent on others and other ecosystems, and hence we are but a speck in the galaxy of independent decision making that have dependent impact points elsewhere.
I have come to see a great meaning and sense in looking at everything that we do as in an ecosystem, and believe that we will make better meaningful decisions in our personal and official lives if we are cognisant and respectful of the fact that we are part of an intertwined fabric; it will humble us and make us better decision makers, if not better people. (I am getting carried away here).
But what has all this got to do with Retailing? Well, if the ecosystem is best exemplified anywhere, it is in modern retailing. And this is where Indian Retail companies are struggling to make sense of modern trade.
The big deficit in thinking is the inability to tie-up the following into one smooth process flow.
Promoter’s Vision of what he wants the company to be (the biggest problem is here), Long terms financial goals, positioning of the format, deliverables at the store level, assortments that will enable delivery the KPIs, category management to understand category and consumer behaviour, setting the service standard levels ( this flows from the positioning statement), building collaborative vendor relations, store Cluster management, assortment localisation, master data integrity, planogramming, replenishment triggers, store execution and operational excellence.
All this MUST be built into one ecosystem without conflicts and contradictions, and I can tell you from personal experience this can be and has done in the past.
This topic is too vast and poorly understood by many retailers. The inability to see that all the above as one vortex of interrelated systems, leads to top management taking ad hoc and knee jerk decision that pulls the ecosystem from one side to another. Top management sits in decision making into narrow aspect areas, and deliberate to death small issues which have great ramifications across the supply chain.
Let me give you an example. Small stores are in many ways more difficult to manage than big ones because the supply chain has a very narrow margin percentage of error, in timing, and quantity, since 3000sft stores lack spare storage. If you decide to not have Top-TOPs, (this is the extra top shelf used as the storage space on top of every shelf), you deny a 3k store of almost 300 sft of extra storage space. This reduces the assortment that the store can carry, no space to keep extra promotion quantity, new product display areas, and mark down stocks.
Every decision must be taken with the full blue print of the ecosystem in front. Top management must possess a 360 degree capability to understand all aspects to the business and must take decision with a cool head and humility. It is important to remember that the nature of the ecosystem of Vision-Processes-IT Systems-People Competence-Execution capability must be built taking the 6 points as cues which the forest ecosystem provides.
This topic is too vast for further description. Any way as they say in Hindi “just a gesture is enough for the wise” But for the others.....? Amen!
And,
Rainforests form a complex ecosystem that is the home to millions of species of both plants and animals. Rainforests cover less than 7% of the Earth’s land surface. However, they are the natural habitat of more than 50% of all the species of living organisms known to mankind. Scientists would expect millions more to exist especially in the rainforests. The Amazon Forest, as a typical rainforest, is no exception. One tree in the Amazon Forest might contain more species of ants than the entire United Kingdom.(source: Wikipedia)
The nature of the rain ecosystem is the following
1. Interdependence
2. Co-existence
3. Non-redundancy (nothing ever stays in the rain forest ecosystem that should not be there. Would we find polar bears in the rain forest?)
4. Ruthless Regeneration (the forest is ruthless to the weak and mild. Only the strongest and smartest can survive. Do you find maimed tigers, or blind lizards in the forest?)
5. It is fragile but evolving.
6. Evolution - It does only what is collectively needed. The direction of evolution is always only that of the collective need. (Deer will not fatten because the tiger wants more meat!)
Look around yourselves, and you will see an ecosystem everywhere. When jobs are lost, fewer drivers are employed. When real estate goes into recessions, fewer masons earn their daily wages, less spend on apparel, and clothing factories lay off workers, and so on.
Hence the realisation that the Eco-System is what we live in, is important in everything we do; affected by our thinking, words and deeds. We are dependent on others and other ecosystems, and hence we are but a speck in the galaxy of independent decision making that have dependent impact points elsewhere.
I have come to see a great meaning and sense in looking at everything that we do as in an ecosystem, and believe that we will make better meaningful decisions in our personal and official lives if we are cognisant and respectful of the fact that we are part of an intertwined fabric; it will humble us and make us better decision makers, if not better people. (I am getting carried away here).
But what has all this got to do with Retailing? Well, if the ecosystem is best exemplified anywhere, it is in modern retailing. And this is where Indian Retail companies are struggling to make sense of modern trade.
The big deficit in thinking is the inability to tie-up the following into one smooth process flow.
Promoter’s Vision of what he wants the company to be (the biggest problem is here), Long terms financial goals, positioning of the format, deliverables at the store level, assortments that will enable delivery the KPIs, category management to understand category and consumer behaviour, setting the service standard levels ( this flows from the positioning statement), building collaborative vendor relations, store Cluster management, assortment localisation, master data integrity, planogramming, replenishment triggers, store execution and operational excellence.
All this MUST be built into one ecosystem without conflicts and contradictions, and I can tell you from personal experience this can be and has done in the past.
This topic is too vast and poorly understood by many retailers. The inability to see that all the above as one vortex of interrelated systems, leads to top management taking ad hoc and knee jerk decision that pulls the ecosystem from one side to another. Top management sits in decision making into narrow aspect areas, and deliberate to death small issues which have great ramifications across the supply chain.
Let me give you an example. Small stores are in many ways more difficult to manage than big ones because the supply chain has a very narrow margin percentage of error, in timing, and quantity, since 3000sft stores lack spare storage. If you decide to not have Top-TOPs, (this is the extra top shelf used as the storage space on top of every shelf), you deny a 3k store of almost 300 sft of extra storage space. This reduces the assortment that the store can carry, no space to keep extra promotion quantity, new product display areas, and mark down stocks.
Every decision must be taken with the full blue print of the ecosystem in front. Top management must possess a 360 degree capability to understand all aspects to the business and must take decision with a cool head and humility. It is important to remember that the nature of the ecosystem of Vision-Processes-IT Systems-People Competence-Execution capability must be built taking the 6 points as cues which the forest ecosystem provides.
This topic is too vast for further description. Any way as they say in Hindi “just a gesture is enough for the wise” But for the others.....? Amen!
Sir,
ReplyDeleteHaven't come across a better comparision in life. Many thanks for brining this perspective.
And then I reflected on my entire life putting the example in perspective
1. At college
2. At hostel-life in college
3. As a new joinee straight out of college
4. As a lateral entrant into a retailing company
5. As one of the member in of a extended joint family
and the ecosystem comparision is perfectly apt for every situation in life.
no wonder any adn every retailer who has had a frog-in-the-well mentality has lost out.
Many thanks for the eye-opener.
Regards
Prasad.P
YES BANK
prasad.p@yesbank.in
Dear Prasad. Indeed. It surely will change everything in life, work and personal. We become more aware and capable and effective. This is not theory but from my persoanl experience, it has worked well. Tks for the comment
ReplyDeleteVery good analogy.
ReplyDeleteSeen in this light, the heads of several retail chains that are presently being kept alive on life-support systems need to go back to the drawing board & think about their focus & impact rather than develop visions pilfered from HBR.
Binu. I love the HBR Line! Really the charity must start at the top.
ReplyDeleteThanks for sharing your perspective Radha. Really value this.
ReplyDeleteThe key word is in your last sentence ....."wise".
Understanding the interdependencies is easier said than done. It takes wisdom (read experience, intellectual maturity) to be able to do that. I one of those people who believe that Retail is best managed by poeple who grew in/with it.
We have seen and will continue to see(sadly)retail headed by generalist management hunchos (read FMCG). I have been witness to many retail decisions taken with obsolute disregard to its overall impact.
As you rightly said, everything is so interwoven that every decision impacts the store in one way or the other. But then, ignorance is bliss :-).
And "promoters vision"....well...thats a sad reality (especially the me too clan in grocery retail). Their lack of vision trickles down to the lowest levels. I really doubt if Category managers(as they like to call themselves) will be able to put down his category strategy if he is asked to.
yes agree. retail is a very difficult business. It is not about Might or Money. It is about skill and humility. Be humble or be Humbled.
ReplyDelete