This website or its third-party tools use cookies which are necessary to its functioning and required to improve your experience. By clicking the consent button, you agree to allow the site to use, collect and/or store cookies.
Please click the consent button to view this website.
I accept
Deny cookies Go Back

Intelligent Management

Deming and Theory of Constraints for CEOs and Executive Teams for the Age of Complexity. Ess3ntial Critical Chain Project Management

  • THE DECALOGUE METHOD
    • The Problem for Every Business
    • The Systemic Solution
    • synchronize competencies
    • How It Works
    • business insight and foresight through systemic cause and effect reasoning
    • Our Education Modules for Systemic Management
  • about us
    • Dr. Domenico Lepore
    • the founders
    • Intelligent Management Success Stories
    • Our Books
    • Clients
    • Expanding Spiral of Positive Systemic Results with Intelligent Management
  • blog & books
    • Blog Theory of Constraints and Deming
    • Our publications
  • ITALIA
  • Contact
You are here: Home / constraint / Ensuring Growth in the Digital Age: Looking at Retail

Oct 18 2018

Ensuring Growth in the Digital Age: Looking at Retail

The speed of the change that digitization is bringing is dizzying. It is forcing companies to think  hard about the very meaning of the way they do business. Old models are no longer valid and businesses need to catch up fast or lose market share and opportunities. Consolidated experience that had a high value suddenly becomes obsolete. Executive heads are rolling as results fail to be achieved.

A major problem that people face with digitization is THINKING, UNDERSTANDING and DESIGNING ACTIONS for a new reality. The speed of the changes in markets requires an ability to rethink hard, deep and fast to innovate what we bring to the market. If Business Schools were churning out graduates able to do this whenever needed, then companies could at least keep up, but that does not appear to be the case. Business Schools themselves are stuck in mental models and behaviors that have served them well in the past but that are not responding to immediate needs.

An example that affects us all: retail

As retail giant Sears heads for Chapter 11, let’s look at an example that affects us all. How do we shop? What is digitization doing to stores and how should retailers adapt their behaviors? Large chains are replacing top managers because they have not been able to react fast enough to keep up. It’s hardly surprising as retail has worked successfully for so long with traditional solutions. In order to compete and thrive in today’s reality, what they need to be able to do is systematically surface and challenge the ingrained mental models they have about their own business. This is the only way to move forward to finding a breakthrough solution. In this post we use the reliable pattern of the Conflict Cloud, one of the Thinking Processes from the Theory of Constraints to help us think about how to get to that solution. 

Let’s take a look at the dilemma many retailers find themselves in. On the one hand, they want to be able to continue to invest in physical stores at a similar rate as in the past. This is because they want to protect a precise need: maintain marketshare and operations. On the other hand, they feel they have to starve stores to invest in technology to keep pace. This is to protect the need to adopt the necessary technology.

The goal that is common to the two legitimate needs is: “Sustainable growth in an increasingly digital world”.

Now let’s look at the assumptions that keep those needs and positions in place:

IF the goal is Sustainable growth in an increasingly digital world and (assumption) “to grow sustainably we must have continuity in what we offer” THEN (need) we must maintain marketshare and operations. AND IF (assumptions) continuity requires us to keep up appearances and operations at current levels AND our marketshare is based on the presence of our stores THEN we want to continue to invest in stores at a similar rate as in the past.

On the other hand,

IF the goal is Sustainable growth in an increasingly digital world and (assumption) “to grow sustainably we must be able to compete with the methods and tools of today’s rapidly changing market” THEN (need) we must adopt the necessary technology. AND IF (assumptions) technology requires high investment AND technology and stores are two separate cost centres THEN we want to starve stores to invest in technology to keep pace.

This is how we place all those “categories of speech” into the conflict cloud diagram:

Screen Shot 2016-08-10 at 12.00.14 PM

How can we find a breakthrough solution to the situation of blockage?

How can we move forward out of this conflict and situation of blockage? By looking at the assumptions, or “mental models” that keep us stuck there and invalidating them one by one. We have identified some of the assumptions that retailers are making and that lie beneath the conflict we have described:

  • Stores are what we do (our core business is selling from a physical store)
  • we know what a store is (our mental models based on experience are consistent and correct)
  • technology is an “add on”
  • technology and stores are incompatible
  • digital is a choice not a necessity
  • investing in technology has no positive impact on stores
  • investing in technology drains money from stores
  • high inventory is what stores require for success
  • customers receive better service from stores
  • online delivery of goods is slower than from a store

A breakthrough solution to the conflict can be found by addressing each of these assumptions in a way that invalidates them but that protects the two legitimate needs that have been identified. We have some ideas about that.

The future success of any sector lies in the ability of its people to systematically look at their mental models and challenge them. These days many time-honoured patterns for success are becoming quickly obsolete. The clock is ticking.

Intelligent Management, founded by  Dr. Domenico Lepore, helps leaders in organizations to speed up flow, overcome silos, and  shift towards a systemic way of working based on win-win collaboration and transparency. We are trusted advisors to leaders of organizations through our unique, whole system Network of Projects organization design. Sign up to our blog here. Intelligent Management provides education and training  internationally on systemic management using the Decalogue methodology .

See our new books  The Human Constraint – a business novel that has sold in 28 countries so far and  ‘Quality, Involvement, Flow: The Systemic Organization’  from CRC Press, New York, by Dr. Domenico Lepore,  Dr. Angela Montgomery and Dr. Giovanni Siepe.

Written by angela montgomery · Categorized: constraint, Systems Thinking, systems view of the world, Theory of Constraints · Tagged: digitization, mental models, retail, retail conflict, Sears

Search Form

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Sign Up For Our Systems View Blog!

Fields marked with a * are required.

Search Form

Recent Posts

  • Why Complexity Impacts Your Organization January 20, 2023
  • Continuous Learning is a Must for Organizations Today – A Systemic Approach Part 18 January 11, 2023
  • Why HR Is So Much More than a Department – A Systemic Approach Part 17 December 21, 2022
  • Are Your Management Methods and Style Obsolete? December 2, 2022
  • Sell More of What Your Company Does with the Resources You Already Have (External Constraint) – A Systemic Approach Part 16 November 3, 2022
  • The Science of Thinking Breakthroughs from Dr. Domenico Lepore for Today’s Complex Business Environment October 10, 2022
  • Shifting Your Focus from Cost to Throughput is How You Can Thrive – a Systemic Approach Part 15 September 29, 2022
  • Are Companies with a Hierarchical/Functional Mindset Dinosaurs? A Systemic Approach Part 14 September 22, 2022
  • Company Functions Are Limiting Your Organization’s Performance – A Systemic Approach Part 13 September 13, 2022
  • End Silos and Dissatisfaction: Learn to Operate as a Network of Projects Organization August 29, 2022
  • Leading and Managing Change Effectively: It’s A Process that Includes You – A Systemic Approach Part 11 August 21, 2022
  • Controlling the Whole Organization through the Constraint – A Systemic Approach Part 10 August 14, 2022
  • Improving Flow Company Wide – A Systemic Approach Part 9 August 3, 2022
  • Why Your Organization’s Constraints are the Key to Success – A Systemic Approach Part 8 July 29, 2022
  • Working with Variation to Support Good Decision Making – A Systemic Approach Part 7 July 20, 2022

Social Icons

  • LinkedIn
  • Twitter
  • Vimeo

Archives

  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • March 2014
  • February 2014
  • January 2014
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • March 2013
  • February 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011

Our Blog

  • Why Complexity Impacts Your Organization
  • Continuous Learning is a Must for Organizations Today – A Systemic Approach Part 18
  • Why HR  Is So Much More than a Department – A Systemic Approach Part 17
  • Are Your Management Methods and Style Obsolete?
  • Sell More of What Your Company Does with the Resources You Already Have (External Constraint) – A Systemic Approach Part 16

Recent Posts

  • Why Complexity Impacts Your Organization January 20, 2023
  • Continuous Learning is a Must for Organizations Today – A Systemic Approach Part 18 January 11, 2023
  • Why HR Is So Much More than a Department – A Systemic Approach Part 17 December 21, 2022
  • Are Your Management Methods and Style Obsolete? December 2, 2022
  • Sell More of What Your Company Does with the Resources You Already Have (External Constraint) – A Systemic Approach Part 16 November 3, 2022

Connect with us on LinkedIn and Twitter

  • LinkedIn
  • Twitter

Sign Up For Our Systems View Blog!

Fields marked with a * are required.
  • Home
  • Blog Theory of Constraints and Deming
  • Library
  • How to adopt systemic organization management
  • Knowledge Base for ‘The Human Constraint’
  • Contact Us

© 2021 Intelligent Management Inc. Canada

Privacy Policy