Refactoring Leadership

A geek struggles to become a leader

The Future of Retail: Revised

Nearly 3 years ago I wrote an article entitled The Future of Retail, which I just republished here. Amazon has just opened a physical book store, and I predict this will evolve into more than just books as time goes on. I'm going to call this a successful prediction, though I still think that a company like Best Buy has the most to gain from adopting this model.

What I didn't see coming to retail, though, is 3D Printing. With companies experimenting with custom printing parts on-demand for customers, we have to ask ourselves what this means. What does this mean for those of us who deal with the data for SKU based and configurable products? 

What does this mean for the intellectual property of traditional manufacturing companies? If my company develops an improved drill bit and Lowe's can print a titanium one, the 3D definition of how to make that drill bit becomes all important. It's possible that the ship has already sailed on this point. I can't share too much more right now, but it's my job to figure this out.

Culture is JiuJitsu

"Culture eats strategy for lunch
-Peter Drucker

I was sitting in a meeting and could not recall the commonly understood academic reasoning behind this famous quote, so I had to improvise and talk about what I know.

Many people interested in real self defense will find themselves training at a traditional TaeKwonDo/Hapkido academy, where the Americanized Hapkido portion focuses on situational street self defense tactics. The situations play out like so:
  • The attacker will swing a knife at you like this (Overhand, over the top downward strike)
  • You will block forearm to forearm like so, take the knife, and sweep the attacker to the ground like so
For visual demonstrations of what I'm talking about, I recommend my good friends over at Technique Tuesday. I have trained and memorized a few hundred of these situational exercises. When the instructor leaves to take a phone call or purposefully lets go of the reigns, we start to see issues. People get hurt when practicing with full speed and strength. More often than not, slight variations in how the techniques are performed when you start trying to use them for real turns what was beautiful orchestration into a hot mess. The two opponents are on the ground wrestling and all the amazing techniques can't address the situation*. This is strategy and tactics at work. Our rules, processes, and tools fail to address violent reality.

Training Brazilian JiuJitsu, though, is different. There are certainly techniques to learn, but the focus in most academies is on:
  • Training at full speed, full resistance from day one.
  • Learning about angles, leverage, weight, and space.
With these fundamental principles, the BJJ practitioner, even at fairly novice levels, is not necessarily a fish out of water when a new situation is encountered**. I can fight a wrestler or a Judoka and not be completely bewildered: I know when I need more space and when I need to close space. I know where to put my weight to "be heavy" and what my opponent might be trying to do based on where their weight is.

When your team understands and has internalized the fundamental values of the business, you don't need a rule for every possible situation. When the business goes off the rails, your teams can make appropriate decisions by returning to the fundamentals: what is the right outcome in this situation, and how do I use the "weight, angles, leverage, and space" of the organization to reach that outcome? This is culture at work, your organizational Brazilian JiuJitsu.

Culture eats strategy for lunch.

* To be fair, some people get incredibly good at this and can decisively lock out an opponent. Very few practitioners will ever reach this level of muscle memory with the hundreds of techniques needed to handle common situations.
** Sam Harris has a great write-up on BJJ

The Future of Retail: Republished

{In December of 2012 I wrote the following article, republished here in it's entirety:}

The Future of Retail
TL;DR – The retail industry should look closely at current and future reality. Many retail businesses should accept that consumers like “kicking the tires” at brick-and-mortar locations, but want the prices and service of etailers like Create a hybrid model where you go try that TV out at a Best Buy a few miles away, but it nearly always ships from a warehouse rather than you taking it home that instant.
Over the past 15 years I have watched industry after industry fight the advance of technology.

Let's think about some industries in the age of the Internet:

Real Estate.

The way we’re doing things now are profitable, proven, known, safe, comfortable.

Some of these battles are still going on; some of them are clearly over. I’m sure I’m not the first person to observe that each of these industries faced a challenge, a choice, and an opportunity. The challenge is that old models are clearly going to be attacked. Consumers want something new. Consumers can see that the technology exists for them to get what they want in the way they want it. The choice and opportunity is to either fight the new way, or to own it. The music industry could have owned digital content distribution. They chose to fight it instead, and now Apple is eating their lunch. I have a few contacts in all areas of the music business and related fields including artists, studio owners, and electronics manufacturers. They all live in fear of Apple. Apple says how high to jump. Apple owns it, because they waited too long and fought too hard.

Listing your home, inexpensively, using the Internet works. Your local Realtor would surely rather you pay them a 6% commission to do the same job. In my state and others, they spend a lot of money lobbying state legislatures to craft incredibly ridiculous laws that make some parts of the business models of Zillow, Trulia, or our own, illegal: under the guise of “protecting consumers” of course. The truth is these are all distortions of reality. It is reality that consumers want and can get music electronically: one way or another. It’s reality that when I sold my last house I paid $500 and a real estate attorney $400 and saved a fortune in commissions. When you tell consumers to ignore the man behind the curtain so you can keep doing what you have always done, you eventually lose.

What Year Is It?

 I have, many times, been standing in a Best Buy needing help. For a long time. Maybe I need an employee to scan this iPad to tell me if it’s the new retina display model (it’s not indicated clearly on the box). Maybe I need to know if this TV is in stock. I’ve also had a 16 year old who doesn’t realize they’re talking to a life long Audio/Video nut try to tell me what this amazing Monster Cable is going to do for my sound system. I feel like Best Buy is practically pushing me out of their stores towards online sellers.

 As I consider myself an ethical person, I feel downright slimy on the (extremely few) cases where I have “kicked the tires” on an item in a store and simply bought it for less online. In other cases, like Best Buy, I feel they had a chance to earn my business and failed miserably. In still other situations, I went to Kohl’s to buy a pair of shoes and they didn’t have my size in stock. The salesperson dutifully offers to order them and they’ll be in in a week. A week? What year is it? Amazon will have these to me in two days, thank you very much. Now Amazon is even working on Same Day Delivery!

So What Should Retail Do?

 Admit to reality and work witin reality?

There are obvious benefits from being able to walk into a brick and mortar location and kick the tires on electronics, clothing, etc. The cost of having a big enough store to have hundreds of TVs and 300 of the latest Xbox in stock is huge. The models for how the stores are ran and laid out are ancient. is just going to undercut you anyway. Consumers want to kick the tires and then buy online, so embrace this model.
I can envision a future where I walk into an branded electronics store. They have ONE of various models of TV, ONE BluRay player, etc. I can kick the tires. Only the most obvious new release movies & music are there for me to carry out of the store. Only the most current game releases are in stock. They have close to zero shipping/fulfillment because there’s essentially no inventory, no more in the back. There are kiosks positioned throughout the store where I can sign in and order the TV I was just looking at. I get my Amazon points, my Amazon Prime shipping, and everything else I’ve grown accustomed to since first becoming a customer in 1997 or so.
Best of all, I have not a shred of guilt. The store manager isn’t looking at me sideways, knowing I’m going to go home and shop around for the best deal on that wine ‘fridge. Retail will only exist in its current form in Boutique settings.