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Innovate at any size: How to implement a ‘startup culture’ within your organisation
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Organisations are never too big to innovate and embrace the ‘nimble agility’ of startup thinking. The business benefits are far-reaching to both customers and the bottom line.
Nordstrom is a testament to this agility, having built a resilient digital transformation roadmap, despite over 120 years in retail trade.
Nordstrom is a testament to this agility, having built a resilient digital transformation roadmap, despite over 120 years in retail trade.
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Organisations are never too big to innovate and embrace the ‘nimble agility’ of startup thinking. The business benefits are far-reaching to both customers and the bottom line.
Nordstrom is a testament to this agility, having built a resilient digital transformation roadmap, despite over 120 years in retail trade.
During a recent webinar hosted by Chasm Digital, leading experts discussed how to think like a startup and embrace the ‘Nordstrom way’. They discussed strategies to unlock the value of innovative thinking within businesses, and how to overcome challenges and ‘blockers’ that prevent digital transformation success.
The experts on the panel were:
Nordstrom is a testament to this agility, having built a resilient digital transformation roadmap, despite over 120 years in retail trade.
During a recent webinar hosted by Chasm Digital, leading experts discussed how to think like a startup and embrace the ‘Nordstrom way’. They discussed strategies to unlock the value of innovative thinking within businesses, and how to overcome challenges and ‘blockers’ that prevent digital transformation success.
The experts on the panel were:
- Robert Spector, International CX Leader, and best selling author of ‘The Nordstrom Way’
- Mark Baartse, Former Showpo CMO, Outsourced Marketing & E-Commerce Consultant
- Rob Kinkade, Co-Founder and CEO, Chasm Digital
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Learnings from Nordstrom - the ‘120 year old startup’
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Robert Spector, best selling author of The Nordstrom Way, says the secret to the 'Nordstrom way' is never being satisfied with where you are now.
"If you are not adapting, if you're standing in place, then you're falling behind. Nordstrom is constantly asking what's next," Robert explains.
The Amazon headquarters and the Nordstrom headquarters are less than a mile away from each other in downtown Seattle. Robert says Nordstrom has had an effective website since 1998.
"Nordstrom employs a lot of former Amazon staff. Today, after 120 years, digital sales contribute to over 55% of Nordstrom sales, which is a remarkable change for a traditional brick and mortar company. The Nordstrom leaders are constantly asking what's next," Robert adds.
"If you are not adapting, if you're standing in place, then you're falling behind. Nordstrom is constantly asking what's next," Robert explains.
The Amazon headquarters and the Nordstrom headquarters are less than a mile away from each other in downtown Seattle. Robert says Nordstrom has had an effective website since 1998.
"Nordstrom employs a lot of former Amazon staff. Today, after 120 years, digital sales contribute to over 55% of Nordstrom sales, which is a remarkable change for a traditional brick and mortar company. The Nordstrom leaders are constantly asking what's next," Robert adds.
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Inverted pyramid and customer-centricity
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Organisations that want to implement the 'Nordstrom way', Robert’s key advice is to be customer-centric. When beginning any initiative, Robert suggests thinking about "how will this impact the customer in a positive way?".
"If it's not affecting the customer positively, it's not customer service. Businesses need to reverse engineer how the experience will be for the customer. The aim is to add to the customer experience?
"Nordstrom has always emphasised customer service in every form, be it brick and mortar or digital. Each person is regarded as a customer, be it someone physically in front of you or via social media. Start with thinking of the customer first, and everything else will follow from there," Robert explains.
Rob Kinkade, CEO of Chasm Digital says there are no businesses as radical as Nordstrom in APAC.
Nordstrom’s customer-centricity stems from its use of the inverted pyramid in organisational strategy. In each break room at Nordstrom, the company showcases a diagram on the wall called the inverted pyramid, which is essentially the organisational chart.
"The inverted pyramid has the team members and the sales associates right at the top, because that's who the customer interacts with. Below are the department managers, store managers, and general managers.
"This is a good example of what Robert is talking about, around the commitment to the customer first and then work back from there. This philosophy is quite unique and quite radical," Rob says.
"If it's not affecting the customer positively, it's not customer service. Businesses need to reverse engineer how the experience will be for the customer. The aim is to add to the customer experience?
"Nordstrom has always emphasised customer service in every form, be it brick and mortar or digital. Each person is regarded as a customer, be it someone physically in front of you or via social media. Start with thinking of the customer first, and everything else will follow from there," Robert explains.
Rob Kinkade, CEO of Chasm Digital says there are no businesses as radical as Nordstrom in APAC.
Nordstrom’s customer-centricity stems from its use of the inverted pyramid in organisational strategy. In each break room at Nordstrom, the company showcases a diagram on the wall called the inverted pyramid, which is essentially the organisational chart.
"The inverted pyramid has the team members and the sales associates right at the top, because that's who the customer interacts with. Below are the department managers, store managers, and general managers.
"This is a good example of what Robert is talking about, around the commitment to the customer first and then work back from there. This philosophy is quite unique and quite radical," Rob says.
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Resourcing at customer-engagement level
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Another radical strategy implemented by Nordstrom is putting the financial resources in the pockets of those who engage directly with the customer.
Rob says there are sales associates making hundreds of thousands of dollars a year working on the floor at Nordstrom because of the unique commission model and degree of empowerment that the company offers its front-line staff.
"That makes Nordstrom a career destination, as opposed to a transitional job, which is often the case in retail," Rob adds.
Robert says innovation does not necessarily start on the front lines. It starts when organisations pay close attention to where the industry is going both on the wholesale side and the retail side.
"Finding new young companies that may have some capabilities which the established company doesn't have. Nordstrom will either invest in it, perhaps take a majority share or buy it outright. They've done this with several companies.
"You have to look at the competition. What is the competition doing that we aren't doing? Or what are they doing that we're about to do? Because somebody is planning to eat your lunch if you don't do what you say you're going to do," Robert says.
Rob says there are sales associates making hundreds of thousands of dollars a year working on the floor at Nordstrom because of the unique commission model and degree of empowerment that the company offers its front-line staff.
"That makes Nordstrom a career destination, as opposed to a transitional job, which is often the case in retail," Rob adds.
Robert says innovation does not necessarily start on the front lines. It starts when organisations pay close attention to where the industry is going both on the wholesale side and the retail side.
"Finding new young companies that may have some capabilities which the established company doesn't have. Nordstrom will either invest in it, perhaps take a majority share or buy it outright. They've done this with several companies.
"You have to look at the competition. What is the competition doing that we aren't doing? Or what are they doing that we're about to do? Because somebody is planning to eat your lunch if you don't do what you say you're going to do," Robert says.
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Digital transformation driving success for Nordstrom over the years
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While more than 50% of Nordstrom's sales now are online, they still have an extensive retail footprint across the US. A key focus for Nordstrom has been to integrate the brick-and-mortar stores with the digital presence, and make them both work together, Robert explains.
"This is a way of thinking called 'closer to you'. The large footprint means there are stores in your part of the country. So if you want to order online, pick up in store, make a return, or get alterations, Nordstrom has the physical assets to support their customers," Robert says.
There will always be physical stores, says Robert. When he was writing his book on Amazon in the late 1990s, people were predicting that retail stores will soon cease to exist as online shopping booms. Robert thought this sentiment was absurd.
"We're all social animals, and we want to be in the marketplace. It’s not just for the exchange of money for goods and services. It is a social thing. The best definition I've heard about retail; it's where the economic world and the social world meet.
"It is going to your favourite place to get coffee, or your favourite watering hole, or your favourite restaurant. We're always going to have that, but the stores are going to play a different role," Robert explains.
Retailers won't have just bricks and mortar stores, they will have an accompanying website and a way for customers to interact with them.
"They will have the ability to sell online and create their own community through their website and their marketing activity. That is what Nordstrom does. They have loyalty programs and special perks for people who have spent X amount of dollars. Retailers are embracing those customers, putting their arms around them and never letting them go," Robert concludes.
Tune in to watch the full conversation free and on demand here.
"This is a way of thinking called 'closer to you'. The large footprint means there are stores in your part of the country. So if you want to order online, pick up in store, make a return, or get alterations, Nordstrom has the physical assets to support their customers," Robert says.
There will always be physical stores, says Robert. When he was writing his book on Amazon in the late 1990s, people were predicting that retail stores will soon cease to exist as online shopping booms. Robert thought this sentiment was absurd.
"We're all social animals, and we want to be in the marketplace. It’s not just for the exchange of money for goods and services. It is a social thing. The best definition I've heard about retail; it's where the economic world and the social world meet.
"It is going to your favourite place to get coffee, or your favourite watering hole, or your favourite restaurant. We're always going to have that, but the stores are going to play a different role," Robert explains.
Retailers won't have just bricks and mortar stores, they will have an accompanying website and a way for customers to interact with them.
"They will have the ability to sell online and create their own community through their website and their marketing activity. That is what Nordstrom does. They have loyalty programs and special perks for people who have spent X amount of dollars. Retailers are embracing those customers, putting their arms around them and never letting them go," Robert concludes.
Tune in to watch the full conversation free and on demand here.