Industry

[Editorial] Capability and Maturity

This is my editorial from the May 2011 edition of Internet Retailing Magazine. You can see the digital copy online in the May 2011 Digital Edition. Let me know your thoughts in the comments!

Digital skills alone may not be enough to sustain the growth of multichannel. Social-, mobile-retailing and digital in-store have conspired to draw eCommerce out of the narrow purview of the digital teams and into a broader connection with the business. To exploit these opportunities we need to increase the commercial maturity of our businesses and the capability of our people.

I first came across the notion of ‘capability maturity’ about a decade ago when I was taking my team at the BBC through an ISO9001 process, creating standards for digital publishing management for BBC Online, already in 1999 one of the highest-trafficked sites in the world. Our challenge was not only to manage the day to day processes at scale, nor simply to contend with the increasing and changing technical opportunities, but to navigate a changing business – and its understanding of online’s opportunity and how to manage it.

Cut to Carnegie Mellon University’s Software Engineering Institute who in 1993 published their model for software development capability. Based on years of research into why software projects in the military failed – despite having the best trained engineers using quality-assured methods working diligently – the insight was that success was correlated to the ‘maturity’ of the organisation’s behaviours and practices.

There are five ‘levels’ of maturity characterised:

  1. Initial/Choatic, with undocumented and dynamic innovation;
  2. Repeatable, with some process discipline;
  3. Defined, with established ‘business as usual’ processes under active management;
  4. Managed, where business metrics control activity and improvement or change is possible with disrupting activity; and
  5. Optimising, where the focus is upon continual improvement and performance innovation.

We’ve seen eCommerce mature through these levels so that now a number of our leading multichannel retailers operate metrics-driven, continually optimising, innovative businesses. But this is no longer enough. “Channel maturity” along cannot sustain a multichannel retailer: we need to have a commercial maturity to work across silos and channels.
In an informal poll earlier this year 36 c-level retailers shared their issues for 2011. The top concern was that of skills: to sustain the rate of change at greater scales, to cross silos, and – tellingly – to develop increased commercial skills. One respondent called this the ‘online shopkeeper mentality’.

I’ve written before about the need for ecommerce leaders to become ‘commerce leaders’, and for all parts of the organisation to work together for ‘Total Retail’. As our businesses and channels mature we now need to renew our focus on building not only ‘digital maturity’ but ‘commercial maturity’ and this requires a shift in how we see ‘ownership’ of the customer – currently within the channels.  The ‘offline customer’ is a credit card, a name, a face; the online customer is a cookie, an email, and user ID; the mobile customer is an IMEI number, a mobile cookie or NFC key, while a mailorder customer is a postcode and socio-economic profile. We could call this a Defined level: each channel has its focus and ploughs its own furrow. As we move to multichannel we ‘let go’ a little of the strict boundaries and start managing by metrics – focusing on yield or ROI per customer, necessitating a more rounded conception of the customer. In an Optimising state, we’re entirely focused upon continuous improvement… to the customer’s experience (and our increased profitability).

We need colleagues then who blend process knowledge and management with customer insight; product development with performance frameworks; service management with hands-on knowledge; analytical yet with flair; considered without being timid; commercial and challenging while collegiate and contributive. These colleagues do not fall fully formed from the sky (not that often, anyway) and we need to create and nurture this blend of knowledge, experience and capability within a changing and maturing business.

At Etail Towers our contribution is the MSc in InternetRetailing. In conjunction with Econsultancy and Manchester Metropolitan University, it is a commercial qualification, academically accredited, focused upon work-based assignments with demonstrable business benefit. Students have come from leading businesses – House of Fraser, Asda and Walmart, Harvey Nichols, Monsoon Accessorize, QVC, Ideal Shopping Direct, Vodafone – as well as entrepreneurs. We keep the cohorts purposefully small and employers note the benefits generated to their businesses.

With the MSc supporting evermore capable staff, putting eCommerce at the service of the multichannel business, retail Boards need to establish the culture, the performance frameworks and cross-silo management approaches that will unlock capability throughout the business: the increasingly mature business, focused upon continual improvement and innovation.

Applications for the MSc are now being accepted for September 2011 start: information at http://econsultancy.com/uk/training/qualifications/retailing. Open evenings on 26 May (Manchester) and 14 June (London) can be booked online . You will have a chance to chat with us, the academic staff from MMU and the Econsultancy trainers, as well as speaking with current students from the first and second intakes.

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