Starting a whole new chapter

Strategy evolution helped Indigo navigate periods of rapid change
|Canadian HR Reporter|Last Updated: 06/16/2014

Editor's note:

Once a month, the Strategic Capability Network (SCNetwork) hosts a special seminar on a topic of interest to HR professionals and business leaders. Canadian HR Reporter covers these events for a special feature titled "Executive Series." The feature includes news coverage from one of our editors, plus commentary from SCNetwork's panel of thought leaders on strategic capability, leadership in action and organization effectiveness.

This web post contains all of these elements.



Canadian HR Reporter's news coverage

Leadership: The final frontier, by Dave Crisp

Great leaders choose to grow, by Karen Gorsline


Starting a whole new chapter
Strategy evolution helped Indigo navigate periods of rapid change

By Liz Bernier

Staying true to an organizational mission can be a powerful driver of success — but in a rapidly changing business environment, that original mission has to be able to evolve to meet customers’ changing needs.

That was the central message Laura Dunne, senior vice-president of human resources and organizational development at Indigo, shared at the Strategic Capability Network’s 35th anniversary event in Toronto.

Sticking to and building around the company’s original mission enabled Indigo to become a powerhouse over the past decade, with more than 6,500 employees across Canada and enviable brand recognition. But with the advent of e-reading and online retailing, the organization’s strategy had to evolve quickly to keep up.

Living up to the mission

Almost two decades ago, in 1996, the retail landscape for book retailers was dominated by Borders and Barnes & Noble in the United States, and Coles, Chapters and proprietor-run outlets in Canada, said Dunne. But, in 1997, Heather Reisman opened Indigo’s first location in Burlington, Ont.

“She opened a store and opened a few more stores and, over 1998, ’99 and 2000, Indigo stores
began to pop up around Canada, and customers loved them,” said Dunne.

Indigo was built around one key mission: To be Canada’s most inspiring bookstore.

“Indigo, a relative startup, was now neck-and-neck in brand recognition and brand affection in Canada up against brands that had been around for half a century or nearly a century,” she said.

“All of a sudden, this brand new brand was right there in the hearts, minds and wallets of Canadian consumers. It became a place where people wanted to be, it became a place where people got great decision support on the books that they wanted to read, and they got to connect with the people who were associated with those books.”

The challenge then was how best to leverage that success, said Dunne.

“‘Where do we go from here, what do we want to do?’ And then there was the acquisition. Indigo was the minnow that swallowed the whale. Indigo had a huge leverage buyout of Chapters (and) became the largest book retailer in Canada.”

‘The winds of change’

That success was soon met with more complex challenges, as online retailing and e-reading began to carve out a foothold.

“And then there was this thing called Amazon,” said Dunne, adding that the online book-selling behemoth created stiff competition in Canada and the U.S. alike.

The change that occurred in book retailing was seismic and practically instantaneous.

“Overnight, the digitalization of reading changed the way that people experience reading… and, all of a sudden, what it meant to be the most inspiring book retailer changed truly almost overnight,” said Dunne.

“So there’s Indigo, and we’re the best at something that is starting to feel increasingly irrelevant. So the mission of being the most inspiring bookstore suddenly doesn’t have the kind of trajectory that we thought it was going to have.”

As the industry reached a tipping point, it became very difficult for retailers to re-orient themselves to the new economics of the business — and new customer expectations.

In the U.S., Borders didn’t anticipate it quickly enough, she said. It shuttered many of its stores almost overnight.

“And the most astonishing thing is, the next year, Barnes & Noble’s revenue dropped. So imagine — you lose your biggest competitor, who had $3 billion worth of sales, their stores are gone, and your revenue drops. And so where did it go? A huge amount of it went to Amazon,” she said. “It’s very tough to compete.”

It’s even tougher when the social media boom begins to eat up a lot of time and resources.

“Everybody had to find a way to respond instantly to customers and manage distemper and seize opportunities,” she said. “It was consuming an inordinate amount of capacity within the organization.”

Evolving strategy

Senior leadership at Indigo looked at all of these different factors, added them up and asked themselves, “Where do we go from here?” said Dunne.

“We had a moment of epiphany where it really was: We have a purpose and not a mission. And our purpose is to enrich the lives of our customers. And we do that by igniting their passions and unleashing their creativity. That’s the experience that we want customers to have when they connect with Indigo,” she said.

“We’re not just enriching people’s lives through a book experience and through a bricks-and-mortar retail experience… Now, (it’s) not just about connecting that book-lover with their next great read — it’s about inviting people into our environments, and inviting them to experience something — whether that is something joyful in home decor, something thought-provoking in reading, something imaginative and creative to stimulate their kids, something wonderful and new to try in gourmet or entertaining. It is all about making them think of something that’s possible for them, that maybe they hadn’t thought about before.”

Indigo has to maintain this in retail and online, in addition to connecting with customers on multiple levels — social media, mobile apps and more.

“But it’s easier because we now have this as a guiding beacon. It’s not just that ‘We’ll be the best, give us any measure, give us any target — we’ll beat it.’ It is, ‘How can we be guided by what we’re creating for our customers?’” said Dunne.

“We experienced the need to reframe the strategic planning from ‘What is the output?’ to ‘What is the purpose?’ And it has now put us in a place where we feel much more confident and much more agile, going into what we know will be a continuously changing environment.”


Leadership: The final frontier

By Dave Crisp (Leadership in Action)

Four excellent presentations highlighted Strategic Capability Network’s all-day 35th anniversary event. Perhaps most significantly for the future of HR, they all dealt with aspects of leadership — the core issue that must be mastered for the greatest financial boost, as well as benefits to all stakeholders as people.

We can improve technical and policy aspects step by step, including analytics, organization structure, planning and understanding of globalization. With these, we can learn and implement increasingly better practices anyone can copy. They are issues of fact that can be tested, set down clearly, followed and enhanced scientifically.

But unless we can improve leadership — in other words, improve ourselves, our own human and therefore potentially variable and flawed abilities to motivate, engage and encourage innovation — we will not be able to exceed the limits we impose on organizations by demotivating, disengaging and limiting those who work for and with us.

Through a highly entertaining stream of humorous, enlightening and entertaining revelations that I trust will come across in the video recordings (available through SCNetwork at www.scnetwork.ca), the presenters illustrated what we are up against in leading equally flawed human beings in challenging situations — and trying to improve our own abilities to do so at the same time.

This is where the best organizations are focusing much more widely today than at any other point in history. Older leadership and strategy models were based heavily on purely rational logic — mechanical theories of what was supposed to work, without much reference to those attempting to apply the “best five skills” or “the seven steps to good strategy formation.”

What we’re finally recognizing is we have to deal directly and honestly with ourselves and our own flaws and limitations. One idea that kicked off the day is to look at brain function — when do our brain’s thinking processes cause us to believe false myths or make decisions biased by our own limited perceptions, and how can we counter some of that?

The best advice from the kickoff presenter, psychologist Liz Monroe-Cook, summarizes it easily — pay more attention, stay humble enough to recognize that some things that seem obvious to us are potentially imperfect, and maintain a more open mind, asking others to contribute their input and work with us instead of expecting them to simply follow orders. She points out that our understandings of these fundamentals are still in such infancy that we are best to remain vigilant, slow down, avoid multitasking when possible and practise healthy lifestyles and mindfulness — the latter in part to remain open to possible flawed thinking and better ideas.

More directly for business, Helen Kerr — co-president of Toronto-based KerrSmith Design — led the group through practical demonstrations on better guides to dramatic uncertainties we simply do not have the ability to predict effectively.

Given the vast number of mission statements and strategy binders that collect dust on shelves, her advice to broaden the process to set overall purpose — instead of specific corporate objectives — is helpful. She said objectives are too specific, and can lock people’s scope of thinking and action to goals even after they’ve become outdated. They can impede rather than support change.

Another great point is objectives are more difficult to communicate since they have to be re-interpreted to be specific to each division and each level of staff — an exercise that almost never gets completed with sufficient co-ordination.

Purposes, by contrast, apply to all levels and areas, are easy to communicate and leave some flexibility and room for each division and unit to adapt best solutions from those closest to actual customers and action.

Of course, use of purpose rather than specific objectives for each team requires different leadership — a style that allows for input and some autonomy, factors that are much prized by staff and therefore boost engagement, but which are often the exception in many command-and-control-oriented organizations.

Kerr’s hands-on engagement of the audience in trying to focus their own purposes was not only a great illustration of how the methods would work organizationally, but it also left many with some interesting, personal followup intentions to spend serious time answering some of the questions the process posed for their own lives and applications.

In keeping with other presenters, the message is clear — today’s approach to effective strategic planning is equally valuable for individuals, teams and organizations, at every level. That fits exactly with the concept that leaders must first change and grow themselves if they are to be effective at engaging change and growth in their organizations and employees.

Peter Jensen’s presentation on coaching keys and best behaviours was engaging as always, again emphasizing that the best leaders and coaches work on the whole person, the whole situation and are not reticent about getting into details — large or small, personal or organizational, emotional or technical — that affect performance.

Keys of honesty, trust, caring are well-known — often not easy to find in today’s average leader — but clearly needed for better success in future. The message that the concepts from the whole day must work together as a whole continued to be reinforced. These processes don’t work in isolation.

Closing out, Edmond Mellina of Orchango presented with Michael Beard, CEO of Ontario’s Technical Standards and Safety Authority (TSSA), a clear picture of how approaches like these made a dramatic difference over three years at TSSA. This illustrated a change challenge with unique aspects (as all organizations face), but one that was achieved without the usual firing of resistors, and achieved with goodwill, ahead of schedule despite the initial appearance of being impossible.

All these stories leave hope that organizations — and more particularly those who lead them — can and do learn if they set out to do so, and such learning dramatically improves results as well as producing far better work environments for all of us.

Dave Crisp is a Toronto-based writer and thought leader for Strategic Capability Network with a wealth of experience, including 14 years leading HR at Hudson Bay Co. where he took the 70,000-employee retailer to “best company to work for” status. See www.balance-and-results.com.


Great leaders choose to grow

By Karen Gorsline (Strategic Capability)

Typically, organizations use “growth” in terms of specific results and outcomes that are often incremental and predictable. There may be periods of growth spurts, stable progress and even setbacks, but growth is not associated with choice, especially uncomfortable choices. Organizations need leaders who challenge themselves outside their comfort zone to add to their capabilities and broaden choices for organizations.

Liz Monroe-Cook provided some thoughts on how to manage thinking more effectively: pay attention to sleep, exercise and nutrition; put more focus on being present in the moment; choose to prioritize when fresh; be aware of thinking and self-talk and how to change it through disruption and replacement with new thinking; understand the interplay between rational thinking and emotional impacts; practise to build strength and confidence but not be lulled into overconfidence.

Helen Kerr’s starting point for managing change in turbulent times is infusing more information into the process to broaden perspectives, challenge assumptions and to begin to sense what the future may hold.

Peter Jensen’s coaching model begins with a foundation of managing one’s self. This includes understanding your impact on others and taking conscious, self-management action. He also challenged assumptions around a coach’s role. While coaches obviously want to support overall success, success requires a coach to help others learn from loss, mistakes and adversity.

The coach also needs to help others use imagery for positive action and to uncover and work through barriers to attaining a desired goal. To support this, the coach needs to challenge his own assumptions about what is occurring by asking questions, listening, challenging the learner’s assumptions and providing specific, relevant feedback.

Expanding the tool kit

Through a series of group exercises, Monroe-Cook demonstrated that the belief we can multitask efficiently and effectively is highly overrated. Even with focused effort, participants were not successful at performing competing activities. It was clear that making choices and priorities are needed to focus successful task performance.

Kerr compared reactive, strategic and purpose-based responses. One response is to simply react. There may be times when an immediate relief or solution is required but organizations in reactive mode leave themselves open to ad hoc, inconsistent action. A strategic response focuses on what the organization is trying to achieve but runs the risk of being overly rigid or irrelevant in rapidly changing environments, creating confusion as the response becomes misaligned with the emerging realities. A purposeful response focuses on: What am I here for? How can I help?

More information on the environment and constant monitoring of trends are needed to signal changes. This information can then be incorporated into an evolving understanding of the world and its impacts. The guiding principles can be translated into action plans and applied to outcomes that matter most.

In turbulent times, a purposeful approach to change was seen to be the most successful option where there are high degrees of uncertainty. Understanding the potential scenarios, the needed investment and application of various responses gives leaders a broader tool kit of understanding around how and when to apply various responses.

Jensen described a process where athletes confronted challenges and blockages they faced. By working through a series of scenarios and responses, they were better prepared — physically, mentally and tactically — to respond to challenging situations. Often scenario planning is viewed as theoretical, time-consuming and somewhat academic but his basic, applied-scenario envisioning, response identification and related preparation pave the way for optimum performance.

Michael Beard of TSSA faced another challenge. The not-for-profit was very stable in terms of legislation, its mandate and its workforce. But becoming complacent in some of its key responsibilities and relying on its monopolistic position, TSSA was not taking full advantage of available skills and resources and faced resistance to fees and any increases. It refocused from being primarily compliance- and enforcement-oriented to being a valued advocate and recognized authority. This was a conscious response to leverage the high skill set, level of resources and passion and motivation of employees with regard to safety. The response to internally motivate and achieve the goals required a commitment to a culture change, a change management infrastructure and approach, and new and different systems and processes.

Leaders who are self-confident and rely on their past experience, trade on their charisma or position, don’t examine their assumptions or ignore what is happening around them do a disservice to their organizations. Leaders need to continue to grow by managing themselves and expanding their tool kit of responses.

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives, a consulting practice focused on facilitation and tailored HR initiatives. Toronto-based, she has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at gorslin@pathcom.com.

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