Invest now in talent for the future
With such a broad set of requirements sought in future retail leaders, building a strong talent pipeline for the future will be more critical than ever before.
As we outlined in our previously published article, The Future of Retail Leadership, “the retailers best positioned to win in the future will be those that invest in leadership development and succession planning now. Doing so can establish a more robust, and diverse, internal pipeline of qualified leaders”. With this in mind, retailers will need to be even more intentional about the development opportunities they offer to their rising stars in order to give them ample opportunity to learn.
What do best in class development plans look like in UK&I retailers? Identifying high potential talent early on, providing opportunities for people to move across functions and geographies and rolling out leadership training programmes for an organisation’s top c.150 leaders are some of the practices we learned about in our conversations.
Acknowledgements
Spencer Stuart would like to extend our sincere thanks to the following individuals for their participation in interviews to inform this work:
Paula Coughlan, chief people, communications and sustainability officer, Currys
Lorraine Culligan, group director of people and culture, Primark
Philippa Jackson, executive director, human resources, Watches of Switzerland
Nicola Kowalczuk, chief people officer, JD Group
Emma Taylor, chief people officer, Tesco
Kate Seljeflot, chief people officer, Kingfisher
Balli Takhar, people director, Ocado Retail
Hayley Tatum MBE, chief people and corporate affairs officer, Asda
Helen Webb, chief people officer, WH Smith
Sarah Willett, chief people officer, The Very Group
Lucy Williams, chief legal and people officer, Pets at Home
“We appointed a Head of Leadership and Culture in October 2022, who is building a number of Leadership programmes from Department manager level to Head of level, incorporating input from our own people who have been heavily involved in the design from the start” says Lorraine Culligan, group director of people and culture at Primark.
“This year, within my own team, we have started a new initiative a monthly meeting with an open chair where more junior colleagues can nominate themselves to be a part of the P&C Leadership Team Meetings. This has been hugely beneficial and brings fresh perspectives to the table”.
At Kingfisher, there is a leadership development strategy in place for the top c.120 leaders, and the further c. 250 successors to these roles. This plan includes defined target leadership behaviours and a programme of activities across the group. “We have a broad piece of work to benchmark this group to see where their strengths lie,” says Chief People Officer Kate Seljeflot. “And to build a higher potential next generation we are going to focus on moving people across roles, including internationally, to broaden their experience.”
These mobility programmes enable future leaders to broaden their experience but also help to build their internal network, something which Hayley Tatum MBE, chief people and corporate affairs officer at Asda, views as critical for success. “If you’ve had lots of different roles, you will have an appreciation of how your business is structured, of how things work, and a result your network will grow. This is how you get sponsorship, people knowing you and backing you”.
How retailers can nurture the best and brightest
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Establish a formalised, systematic approach to talent development throughout the organisation, with a focus on capability versus experience
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Ensure your emerging leaders have proximity to the front-line, it will give them operational muscle and commercial insight
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Provide exposure across the organisation — in different functions, regions and specialisms, and within the group centre. By complementing on-the-ground experience with a firm grasp of data, methodologies, and trends, high potential employees can become both pragmatic and strategic
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Offer structured leadership development programmes as widely as possible throughout the organisation. At the upper levels, these programmes should provide accountability to programme members, through short term assignments, with budget and P&L accountability. A focus on emerging trends and innovation is key
Be intentional about diversity
Retail leaders increasingly understand that diversity is simply good business. McKinsey has found that greater representation of women on executive teams leads to a 39% greater likelihood of financial outperformance amongst top-quartile companies versus their bottom-quartile peers — up from 15% in 2015.
Diversity, though, is not just about gender. Different skills, experiences and socio-economic backgrounds are needed, as well as greater inclusivity towards those with disabilities. That’s because a diverse set of approaches and points of view help deliver improved performance. Diverse teams are proven to come up with new ways to solve problems and create new products. But more than that, it’s simply the right thing to do.
In our conversations with retail CHROs, we sought to identify which practices have been the most effective in ensuring a diverse pipeline of talent. Allyship, mentoring and reverse mentoring programmes were frequently referenced as helpful tools. Most retailers we spoke with have hired DE&I leads to help track, attract and retain diverse talent.
This starts at grassroots level, where retailers are intentionally focusing on developing a diverse talent pool. Philippa Jackson, executive director, human resources at Watches of Switzerland shared: “The organisation should represent society and I am making sure we are over-indexing certain populations through access to development and apprenticeships.”
Paula Coughlan, chief people, communications and sustainability officer at Currys, says their focus on diverse pipelines is starting to yield results. “At our lower levels we have made good progress by implementing a new cadence of talent rhythms and routines. We want to systemise it to create the right habits and practices.”
While diversity may be improving at the lower levels of organisations, there remains a lack of representation in the higher echelons. To close this gap, retailers are either partnering with communities like Diversity in Retail for tailored development programmes or building their own in-house.
Ensuring diverse talent pools at senior level is a priority for Tesco. Emma Taylor, chief people officer shared: “We have targeted interventions in place to build more depth in our pipeline at senior manager level and above (typically leading a large team or Head of a Function). For example, we currently have a programme involving over 200 women across Tesco, supporting them to unlock their potential and take that next step in their career. This is just one area of focus”.
The Very Group is also taking targeted action. “We ran a return-to-work programme for women who have taken time out of their careers to look after their kids”, says Chief People Officer Sarah Willett. “It focused on tech and data and within 12 weeks, we saw people jump three levels of experience through investing time in them”.
At Ocado Retail, their focus on hiring for potential has resulted in a more diverse cohort of leaders. “We focus our hiring on skills as opposed to experience and through that we are able to pull through diverse talent” says Balli Takhar, people director at Ocado Retail.
Ensuring a retail organisation has a best-in-class DE&I agenda is not only important for developing talent but also plays an increasingly large role in a company’s ability to attract talent. Purpose, culture and values are of utmost importance for younger generations. Keeping on top of the needs of the generation coming through is key for retaining top talent.
“Purpose and ESG are so important for the younger generation”, says Nicola Kowalczuk, chief people officer at JD Group. “The talent joining us is looking to ensure there are pathways available for development and progression. They’re also keen to join a business whose values align with their own. That’s why we continue to constantly engage with colleagues on the subjects that matter to them. Communication is key. We learn a great deal from our colleagues. In return, we do all we can to help them to set their own goals by promoting collaboration, listening and continuous learning.”
How retailers can generate a diverse pipeline of talent
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Commit to creating and fostering an inclusive culture to help attract and retain diverse talent. This includes buy in at the top, grassroots and HR-led initiatives, encouraging affinity groups / ERGs, and monitoring their progress. This in turn will bolster efforts to recruit diverse talent into your organisation at all levels
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Be uncompromising in your goal to bring more diversity into the business. Connecting DE&I goals with the broader business values and goals is critical so everyone understands the ‘why’ and how it ties to company values
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Role modelling is powerful: “if you can’t see it, you can’t be it”
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Whether hiring from outside or promoting internally, ensure that your talent have the right sponsors AND mentors. They are two very different things
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Ensure that existing policies and processes do not disadvantage any group(s) of people
Build capabilities and culture for AI and changes in technology
There are many ways that retailers can unlock the potential of AI and in many cases they already are. This is no surprise. Leaders across all industries are increasingly looking to AI to help unlock new opportunities and services, and provide them with information that can strengthen decision-making across their organisation — particularly given the exciting (yet daunting) capabilities on offer from generative AI (GenAI).
When deployed well, this suite of technologies can help improve operational efficiency, craft personalised customer recommendations and strengthen supply chain forecasting — all of which can play a key role in accelerating revenue growth. AI can also help leaders identify the right pricing and marketing strategies, particularly in light of GenAI’s ability to create new content tailored to audience preferences.
It is not surprising, therefore that AI, data & analytics and technology were frequently cited as the most important functional skillsets for future leaders in our conversations with chief people officers. They were also cited as the functional skillsets in shortest supply in leadership teams today. How do retailers intend to bridge this gap? For now, most plan to bolster their capability through senior external hires with specific functional experience, while they build their expertise at the lower levels of their organisations.
Pets at Home’s recent appointment of Angelique Augereau (former chief analytics officer at Capital One Financial Corporation) as a non-executive director signalled a commitment to embracing new technologies. “We have experts in our team across technology, digital, data and analytics, as it is a central part of our strategy,” says Lucy Williams, chief legal and people officer at Pets at Home. “However, it is equally important to help prepare all our colleagues for future advances in technology, so upskilling colleagues and keeping them informed about developments in AI and technology is critical.”
Educating organisations on the opportunities of AI will unlock was a common thread in our conversations. Chief people officer at WH Smith, Helen Webb explained “we are supporting our senior leaders augment their knowledge on AI will external speakers”.
The commitment to embrace AI applies to every member of the leadership team at The Very Group. “Each executive committee member has a personal objective around AI,” says Chief People Officer Sarah Willett. “We have been using elements of generative AI for a while and we recently had our first all-hands company call on AI which launched training for everyone on how to use generative AI could support them in their roles.”
How retailers should prepare their teams for AI advancements
Taken from our recent article, What's in store for retailers and AI?
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Provide AI training across your organisation. “The more people who are trained about what and how to do with AI, the better the impact that will be reached,” – Eric Chemouny, managing director, Retail and CPG EMEA, Google Cloud
- Interdisciplinary skills are essential when hiring AI talent. “In the AI universe we need to have social scientists. It is about providing solutions that help the user and so in terms of skills, we need to look for more than data scientists.” – Dr. Nozha Boujemaa, Global VP, AI Innovation and Trust, Decathlon Digital
- Create a culture where mistakes are welcome. “AI is going to make mistakes, it’s going to be wrong on occasion. So creating a culture where any new mistakes are a stepping stone towards improvement is an important fundamental shift that companies have to make.” – Devesh Mishra, president, chief product and technology officer of Core AI, Keystone
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Ethical considerations are paramount. “Transparency, fairness, and accountability should guide AI development and deployment.” – Devesh Mishra
Back to the future
In our recent article, A new playbook for high-performing retail CEOs, we suggested that that top-performing leaders are distinguished by “their ‘beneath-the-surface’ qualities, which fit into two categories: capacity — what leaders can do — and character — how they respond when dealing with new challenges or the unknown”.
Certainly, there is little doubt that finding the right leadership for a future that has yet to be written will always be a challenge. What will be the direction of upcoming technological advances? Will the next decade be pockmarked by geopolitical instability, or will there be calmer waters ahead? How will the health of the planet reshape supply chains and our consumption patterns? Such questions present no easy answers.
What we do know, however, is that the most successful retail organisations will be those that adapt to changing consumer preferences by meeting — and exceeding — their expectations on price, product, service and quality.
Technology will have a crucial role to play in this process, of course, but so, too, will strong and effective leadership. And that is exactly why it is so important for retailers to make early investments into in talent pipelines. Should they do so, competitive advantage and a future shaped by reduced risks will follow.