Managing Crisis: Skills needed for Visionary Leadership
- Srikant Gokhale
- Mar 23
- 28 min read
Updated: Mar 31
You need people who can walk their companies into the future rather than back them into the future- Warren Bennis, Leadership Guru
In the ever-changing and increasingly competitive landscape of retail, strong and visionary leadership is more important than ever before. Yet, a stark reality persists: a Gallup report reveals that only 22 percent of employees believe their leaders provide a clear direction for their companies. With challenges such as fierce competition and unpredictable market conditions, the need for leaders who can create and execute a compelling vision becomes critical. Without this leadership, retailers risk stagnation or worse, obsolescence.
"Many leaders struggle to adapt to new business models and don't know how to navigate the future.'' - Paul Martin, UK head of Retail at KPMG
"You'd think something universally acknowledged as a critical leadership quality would be the subject of countless books, tools, and required MBA courses designed to help you grow your ability to become more visionary and future-oriented. There's almost nothing that explains how to develop and nurture our visionary capacity. At least not with the soundness, rigor, and practicality you would look for with such an important leadership quality. So maybe we can attribute the lack of visionary leadership to an absence of knowledge and understanding about growing this quality."
"It is intriguing why there is so little attention and guidance on how to develop visionary leadership. Whether you are a born visionary or not, you can develop it. Like playing cricket, golf, or tennis, for some, it comes much easier than others; but anyone can become an accomplished player through practice."
The conventional MBA programs provide "specialized training in the functions of business, not general educating in the practice of managing." In school, MBAs become adept at analyzing well-defined problems in functional silos. But this isn't Leadership. – Henry Mintzberg, Management thinker and Professor at McGill University.
This article will explore why Visionary leadership skill in managing crisis is urgently needed in today's ever-changing and uncertain business environment. Through the examples of five leaders in the retail industry in the last decade, we will learn and discover 1)What it takes to manage crisis?, 2) What is DNA of Visionary Leadership skills needed. There is a dire need for visionary leadership skill sets at all levels; otherwise, we will soon witness more bankruptcies at an accelerated rate across industries.
Why Retailers are in trouble
The last decade (2010-20) has seen the biggest bankruptcies in Retail history. With dramatic shifts in customer behavior and shopping habits, acceleration of E-commerce, aggressive competition, and economic conditions, retailers are challenged like never before. Some iconic retailers like Borders, JC-Penny, Brook Brothers, Nieman Marcus, Toys R Us, Sears, Forever21, Lord & Taylor, Radio Shack, CompUSA, Payless, Fry's Electronics, Pier 1 Import, and many others declared bankruptcy.
As the pandemic receded, consumers shifted their spending from goods to services such as travel and entertainment. That's why retailers' inventories were bloated, and companies were resorting to short-term measures like promotions to stimulate demand, chipping away at their profits.
"We believe many will turn to aggressive discounting to solve their inventory problem, which is likely to spark a 'race to the bottom.'- Morgan Stanley analysts said in a report Monday.
Many retailers are struggling to survive. Bed Bath & Beyond, Kohl's, Gap, Wayfair, Amazon, and Victoria's Secret have seen their share prices collapse by more than 20-80% in 2022. In the next decade of the digital era, retail bankruptcy among traditional store-based retailers is expected to rise in a highly uncertain retail landscape with high inflation, supply chain disruption, and economic slowdown resulting in less consumer spending on discretionary and further erosion of the middle class.
We have potentially a perfect storm brewing. "I wouldn't be surprised to see an uptick in retail bankruptcies."- Sally Henry, a professor of law at Texas Tech Law School
Why are these retailers failing to adapt to changes and declaring bankruptcy at an alarming rate? The biggest reason for this is the lack of Visionary leadership. Managing in turbulent times requires visionary leaders at all levels. Otherwise, we will witness a retail apocalypse of monumental proportion in the coming years, resulting in more suffering, cost restructuring, store closures, job losses, and more demise.
Crisis of Visionary Leadership
Retail leadership teams are in crisis and "not fit for purpose" in a rapidly changing business environment, according to a major survey of Chairs, CEOs, and senior executives from the retail sector worldwide.- Emma Herrod, World Retail Congress.
The report DNA of Future Retail CEO released at the World Retail Congress revealed that the retail sector is suffering from a crisis in leadership. Many leadership teams at leading companies appear unable to adapt and, as a result, risk failure in the future. The report highlights the following failures in leadership within the retail industry.
"At some point along the way, we were too focused on making a profit short term rather than building value for customers long term," - Alan Wurtzel, CEO Circuit City.
A failure of leadership and in particular an inability to adapt to the rapid changes to consumer behavior brought about through technological change. Only 36 percent of respondents feel their company's leadership team is moving fast enough to keep up with changing consumer behavior.
A failure of skills as many retailers with a store-based legacy, in particular, struggle to implement transformational changes to make them more competitive in the changing retail landscape in the digital era. Just 27 percent believe their leadership team has the digital expertise necessary for success in the future;
A failure of culture, with a functional, siloed set-up within leadership teams, is clearly unsuited to providing a seamless customer experience across channels. Just 26 percent feel their leadership team has the necessary expertise in data and analytics for success in the future."
A dearth of visionary business leaders meant companies were being led more by managers of the bottom line than by passionate, independent thinkers who can steer an organization effectively."- Warren Bennis
Most retail CEOs lacked the attributes and skills they needed to prosper – and that the gap would spread within their leadership teams over time." No wonder retailers are in trouble.
What is visionary leadership in managing crisis?
Visionary leadership is required to inspire, develop, and lead the organization through uncertain times.
In 2002, Daniel Goleman introduced the term visionary leadership as one of six leadership types. As the name suggests, visionary leaders successfully build an optimistic and inspirational vision of the future. They are the creators of a new dawn, working with imagination, insight, and confidence. They present a challenge that calls forth the best in individuals and brings them together around a common sense of purpose. Goleman defines visionary leadership as "the ability to take charge and inspire with a compelling vision" and postulates that this type of leadership is best used "when changes require a new vision or when a clear direction is needed."
To me, a leader is a visionary that energizes others. This definition of leadership has two key dimensions: a) creating the vision of the future and b) inspiring others to make the vision a reality. ~Vince Lombardi
A visionary leader is a person who has a clear idea of how the future should look, builds the concrete steps to get there, and then leads their team toward a better future. They perfectly balance their ability to see the potential for change with their ability to lead others.
"In today's competitive and evolving retail landscape, companies need leaders who are willing to take risks to make more meaningful, personal connections with their customers," NRF President and CEO Matthew Shay
Visionary Leaders see the world differently. Visionary leaders can often see what no one else sees, finding potential and opportunity in a time of change or even company contraction. They see what's not there—or what's not there yet. A visionary leadership style embraces the unknown as a blank canvas for innovation, experimentation, and pioneering new possibilities.
What it takes to become a Visionary leader
Retail has been and remains one of the most dynamic industries in the world. To succeed, retail leaders must have passion, commitment, vision and an understanding of how this business impacts the diversity of their customers in communities large and small," - NRF President and Chief Executive Officer, Matthew Shay
In the last decade, there are few examples of visionary leaders who, against all odds, propelled and transformed their organizations to thrive in today's hyper-competitive and challenging marketplace. Let us understand and learn from these six leaders what it takes to become a visionary leader in the retail industry.
Hubert Joly, CEO- Best Buy (2012-2018): from near death to invincible
"Best Buy was supposed to have succumbed to the inevitable. Everyone thought we were going to die," - Hubert Joly,
Joly Robert joined in August 2012 when Best Buy was in turmoil, near death, and in perpetual decline; the only question was how long it would take for its ultimate demise.
- Turnaround magician with a sense of responsibility and urgency
Under Hubert's Leadership, Best Buy has executed one of the all-time remarkable turnarounds in the retail industry. People thought he was crazy and suicidal to take up this job." He was unfazed by criticism of his Renew Blue turnaround strategy and the early debacle of tanking of share by 40% after the holiday season in January 2014. Still, he went around doing his job with clinical precision step by step, with a sense of responsibility and urgency.
"Once you've had a near-death experience, "arrogance, if you had it in your bones, has disappeared forever."- Hubert Joly
Joly did not start his time at Best Buy in the corporate office. Instead, he worked in one of the stores for a week, which showed him that he could improve morale with even a tiny gesture. He restored the company's generous employee discount program, "It was a great way to learn about the company's situation from the frontlines. Listening to the associates, I was able to learn a lot," says Joly. "People were talking about 'showrooming' at the time: People were coming to our stores, then talking to the associates, and then leaving to buy online."
"It was an act that showed that he was listening to the employees," - said Brad Anderson, Best Buy CEO from 2002 to 2009.
Under Joly, Best Buy had cut costs as quietly as possible, gradually letting leases expire for unprofitable stores. It didn't mean he neglected costs. He cut costs by roughly $2 billion without sacrificing employee morale. "Eighty percent of cost structure is not salary," he focused first on eliminating waste and inefficiencies. But he has never announced a vast, public round of layoffs, which can crater employee morale and create a sinking-ship vibe.
"Taking people out is the last resort because you need to capture the hearts and minds of the employees." - Joly in 2015.
- Taking risks and bold decisions with a clear sense of priorities
"Until I match Amazon's prices, the customers are ours to lose,"- Hubert Joly.
Price-matching costs Best Buy real money, but it also gives customers a reason to stay in the store and avoids handing business to competitors." There were criticisms about his price matching with Amazon that it would lower Best Buy's profits and accelerate their demise, But Joly went ahead with price matching.
The first phase was 'Don't die,' and phase two was to improve what we have, and we have clearly done that. Now we are in a position where we look to the future and say, 'How do we grow?' – Hubert Joly, CEO of Best Buy.
Even though it hadn't been smooth sailing, Joly had a clear sense of priority. It exited a European retail joint venture in 2013 and sold off its stores in China in 2014 as it focused on reviving its US business, which took significant sales off its books. Best Buy pulled the plug on its Mobile business, closing the remaining 257 small standalone stores.
"If you try to direct a bicycle at a standstill, you fall. If the bicycle moves, it may not be moving in the right direction, but it doesn't matter; you can course-correct." – Hubert Joly.
- Authentic Leadership driven by purpose not profit
"One of the most meaningful things for me is that Hubert is a very purpose-driven leader, showing up in several ways. It resonates in everything he does"- Corie Barry, CEO-Best Buy.
He's an extraordinarily authentic leader," says Bill George, the former Medtronic CEO has now known nationally for his books on leadership. "He's brought to Best Buy that level of authenticity in all of their relationships with their customers, suppliers, and particularly with all of the company's employees. An authentic leader is purposeful, mission-driven, and values-driven and lives an integrated life. Joly reflected on all aspects of being an authentic leader.
When we started the turnaround, I was very clear about my philosophy, which was that profit is not the purpose. The purpose is to contribute to the common good. - Hubert Joly
Even after a successful turnaround, he looked ahead to make Best Buy invincible against its aggressive competitors. He launched the new growth strategy of "Building the new Blue" and undertook several new initiatives to increase online capability, enhance services, and extend the healthcare segment by acquiring Great call. Best Buy defined a clear and exciting purpose to enrich customers' lives through technology.
We need leaders who lead with all of their body parts: their brain, their heart, their soul, and their gut, be authentic as a leader" – Hubert Joly, CEO-Best Buy
Tadashi Yanai, Founder and CEO- UNIQLO: Aspiration to become the world's No.1 Apparel retailer
Our ultimate goal is to see UNIQLO become the No.1 brand in markets around the world- Tadashi Yanai, Founder, and CEO, UNIQLO.
From humble origin to becoming the wealthiest man in Japan, Tadashi Yanai, the founder of UNIQLO, is a fantastic story of thinking big and persisting with your vision despite all odds. Tadashi Yanai is one of Japan's most dynamic and innovative businessmen. After taking over his father's suit shop in 1984 in a sleepy industrial city far from the fashionable capital, he transformed it into UNIQLO, Japan's most prominent and the world's third-largest apparel retailer. He is now striving to make it the world's largest."
- Dream and think Big
"To win in life, you must think bigger."- It all Matters, Paul Cummings
The rise of UNIQLO from its modest beginning as a suburban store to globally recognized world's no.2 apparel retailer (in market cap) reflects the inspiring and visionary Leadership of Tadashi Yanai. Even when UNIQLO was small, he always aspired to become big, first as the most significant player in Japan, then in Asia, and now wants to be the No.1 player in the world, beating Zara. UNIQLO's unique value proposition of focusing on basic casual despite several failures indicates his laser-sharp focus and understanding of differentiation.
Unless you have scale, you may not be able to stay alive or competitive. Unless you have scale, someone else can buy you, or you may go bankrupt. Remember, I have seen so many industries dying out
People often wonder what the secret to Yanai's incredible success is, and it seems to combine hard work and learning. "I never expected my dream to be brought to life because reality is complicated and demanding, and we started from a tiny business. I thought before that I might be able only to open 30 UNIQLO stores and produce $30 million at the most in my lifetime. today, we have over 3,500 stores worldwide and $20 billion to post." Yanai confidently says, "And now, I think reaching $30 to $40 billion is already accessible from my point of view thanks to the globalization of the business." 15
He is a hands-on leader who supports a robust and unique culture that is hard to duplicate. His influence is everywhere, as the values and goals of UNIQLO are translated into processes, measures, organizational structure, and people. The organization is flat, and employees are encouraged to make suggestions.
I want to keep learning so I can make UNIQLO better. Many businessmen fear the unknown, but not me. I embrace it. It is going after the unknown that continues to make this business an exciting one to be in. – Tadashi Yanai
- Resilience: Never give up
"I learned that in life, if you venture out to do something new, you often fail. It's common, it happens every day. But if you explore the reasons for the failure, find out what you have to do in order to succeed, and think for yourself, you will eventually succeed"- Tadashi Yanai"
Tadashi continued with international expansion despite early setbacks in China, UK, and USA. Any other leader would have given up, but Tadashi Yanai persisted as he had a long-term vision to make UNIQLO No.1 in the world. He continued with international expansion despite early setbacks in China, UK, and USA. Any other leader would have given up, but Tadashi Yanai persisted as he had a long-term vision to make UNIQLO No.1 in the world. For him, "Failure contains the seed of success." This again points to the fact that nothing ever gets started until a person takes action and sees how it turns out.
I always believed a company can grow, no matter what adverse conditions exist, as long as there is a will, a sense of direction, planning, ingenuity and action."- Tadashi Yanai, Annual report 2001
- God is in detail
"UNIQLO had a revolutionary strategy for an apparel company — ignore fashion
Being a dreamer yet paying attention to details is the hallmark of Tadashi Yanai's way of managing. According to him, any good business manager will want to pay attention to his shop, products, and marketing. To Tadashi, the total commitment of a top manager is essential. People often say that the details are everything—everything shows up in detail. So unless top managers are fully committed to paying attention to the details, I don't think you can call such people good business managers. Unless they look at the details of day-to-day operations, I don't think you can call them good business managers.
- Not afraid to copy ideas
I came up with the idea for big stores that sell casual wear, drawing on the self-service system of US university co-ops. I wanted to create stores where people could shop for clothes much as they shopped for books or records"- Tadashi Yanai
He was not ashamed to imitate a good idea, practice, or learn from anybody. He could go to any extent and even met the GAP CEO to understand its business and copy everything to create a Japanese version of GAP called 'UNIQLO'; as they say, the rest is history. He learned vertical integration and private label from Next, Zara, and Giordino. He imbibed from tech companies how to innovate, which led to innovation in the fabric, life wear, heatech, and Airism. He learned many management practices from Toyota manufacturing and applied them to store management by converting salesmen into robots with a strong focus on training and detailing every process.
"There are a lot of competitors and challenges around. I know what they do and how they do it, and I try to learn from them. I also try to learn from other successful businesses' recipes," – Tadashi Yanai
Brian Cornell, CEO-Target, (2017 onwards): Bold Leadership with strategic vision
Brian Cornell's purpose-driven Lead ership and strategic vision reflect an unwavering commitment to his team and a keen ability to cut through the noise and truly understand what American families want and need," NRF President and CEO Matthew Shay said. "
For Target, the troubles started brewing in 2014; Target Sales had continued to slide. Stores were in despair. And the company, under its previous CEO, was struggling to adapt to the rapidly changing behavior of consumers- many of whom were shopping more with online retailers like Amazon. Profits dropped 46 percent in 2013 from the prior year, eventually leading to its first-ever loss of $ 1.6 B in 2014. Target's culture had become insular, inefficient, rife with politics and calendars full of meetings, innovation stifled by caution and inertia."
"It's not a broken company. It never was. Something was going to change, or shit was going to hit the fan." - Brain Cornell, CEO-Target, 2014" 16
Coming off a series of setbacks, Target named Brain Cornell as the new chief executive, bringing in an outsider to lead the company for the first time. Cornell's selection was widely seen as an effort to bring in a much-needed outsider's perspective to remake and revive Target.
- A Greater sense of purpose and urgency: Getting the basics right
"Target hadn't kept up with its competitors or the changing retail landscape. What needs to change is how we operate. We must move with a greater sense of urgency and purpose."- John Mulligan, COO-Target.
During the first year, Cornell made some hard decisions to improve its financial situation. Cornell focused on restructuring its portfolio to focus on core US-based discount store business and cost-cutting by layoffs. 2015 was a tumultuous year for Target, as the company pulled the plug on some businesses, canned thousands of employees, and forged ahead with CEO Brian Cornell's efforts to remake and revive the retailer and put his stamp on business with bold and fast decisions. Some of his early choices were: 1) exiting Canada $ 5 B write down, 2) Laying off employees to save $2 B annually, and 3) Selling the pharmacy business to CVS for $ 1.9 B.
Cornell developed a reputation as a hands-on CEO, often visiting stores to chat with employees and customers. In 2016, he even embarked on several home visits with different shoppers. Than anything, Cornell brought a fresh eye to the business.
With the efforts to get basics right, FY 2015 turned out to be the best year for Target in terms of the highest sales of $ 73.7 B and Net income of $ 3.3 B in its history. Cornell became a turnaround expert and one of the most prominent CEOs. Target's stock price skyrocketed to $ 84 a share by June 2015 (increased by 45% in one year), its highest-ever level in history.
The change has been tough", But I hope we all recognize it's absolutely the right thing for the business. It will allow us to be more agile, make quicker decisions and unlock growth."- Brain Cornell, CEO-Target.
However, initial euphoria was short-lived as 2016 proved challenging. Target could not compete with aggressive Walmart and Amazon and lost the battle in the fast-growing E-commerce business, with its online sales constituting just 2% of its total sales despite investing billions.
- Launched bold Strategic Plan: A fundamentally different approach
Target was struggling to cope with the "rapidly changing" behavior of consumers. Target Net income dropped for FY 2016 (From $ 3.3 B in 2016 to $ 2.7 B in 2017), disappointing results. The investor lost confidence in its long-term future, which resulted in its share price crashing to $ 54, below the level when Cornell joined Target in August 2014. After two years at the helm of Target as CEO, It was back to square one for Cornell.
Cornell unveiled a new bold 'Investing to grow' plan in February 2017. The $7 billion investment plan included fundamental changes and a return to Target's 'Expect More- Pay Less" roots". Cornell was addressing the real issues facing Target. 1) Remodeling of stores to enhance customer experience and to make its store relevant again as the stores were looking old and tired, 2) accelerating the digital transformation by leveraging on its 1900 stores to fight aggressive online competition from Amazon and Walmart, 3) to tap urban markets by opening smaller stores to grow revenue base, and 4) focus on its core value proposition of 'Pay less and Expect more' by the combination of lower prices (Every day low prices), and 5) strengthening unique merchandise offering through private label.
At Target, we are taking a fundamentally different approach. While others are exiting businesses and cutting investments, we are confidently investing in our future, creating a growth engine that we expect to drive consistent, sustainable, profitable growth and market-share gains for many years. – Brain Cornell, Annual report 2016
Cornell made a big contrarian bet to compete against Amazon by doubling down on Target's physical locations. Everyone thought he was crazy; It immediately faced skepticism on Wall Street -—the announcement sent shares plunging 12% in a single day." 17
Target emerged stronger than its competition, as reflected in its market cap increase from $ 35 B in March 2017 to $ 64 B by Jan 2020. Target's business is reenergized and revitalized, sales and profitability steadily increased, and it ranked among the strongest brick-and-mortar retail survivors."
"There are more chapters to be written. Being agile and nimble is the key to looking at the business. Evolution is in our blood. And in every period of disruption, our company has always forged ahead, in every era."- Brain Cornell, CEO-Target.
Doug McMillon, CEO-Walmart (2015 onwards): Transformational and Risk-taker
Doug McMillon was made CEO of Walmart in 2014 with a clear objective of making Walmart future ready without losing market dominance. Under pressure due to Walmart's slower sales growth compared to US retail sales growth in 2016 (Walmart 1% compared to US retail 3.9%), Doug McMillon was compelled to do something and act fast in the short term to restore the confidence of the shareholder as well as the board. Walmart's e-commerce growth declined to 9.4% in 2016, the lowest in the last four years.
When Doug became the CEO, Walmart was very much still the old-style retailer. Under his Leadership, it blossomed into a Phoenix, reinventing itself for the age of e-commerce, and has become one of the most prominent players tackling the future of Retail. Doug is leading Walmart in an era of exponential changes. Doug is an inspiring leader, is on the frontiers of technology, and is revolutionizing Retail—all the while improving the quality of work life of Walmart associates, delivering high-quality customer service, and producing solid shareholder returns.
- Lead from Front: Taking risks
You can't "lead from behind." "As a leader during transformation, you have to be out in front - show that you want to learn, be curious, introduce new ideas, ask questions," – Doug McMillon
To keep up with consumer habits, Walmart has changed dramatically over the last five years. McMillon inherited a company on the verge of a crisis. Through many risky strategic decisions, he has positioned Walmart to thrive in the new retail environment.
- Acquisition of Jet.com to revolutionize its E-commerce capabilities
Walmart has had to embrace to keep up in a rapidly changing retail environment. "There is no growth without change, and there is no meaningful change without risk. "So, get comfortable with an intelligent level of risk."- ," Doug McMillon, CEO-Walmart
In 2016 as Walmart struggled to penetrate the fast-growing e-commerce market and fight the dominance of Amazon, Walmart's most significant decision in the last five years was its $3.3 billion acquisition of Jet.com in August 2016. The move was widely criticized, as Walmart was seen throwing away billions on an unproven start-up. However, the deal has paid off handsomely for the retail giant in a short time.
The Jet acquisition was critical to jump-starting our progress over the last few years. Not only have we picked up traction with pickup and delivery, but our Walmart.com e-commerce growth accelerated after the Jet acquisition.
- Walmart decides to shut Jet.com.
In May 2020, Walmart decided to shit Jet.com just four years after its acquisition. It triggered a considerable debate about whether it was a costly mistake or a great strategic move.
"Due to the continued strength of the Walmart.com brand, the company will discontinue Jet.com. The acquisition of Jet.com nearly four years ago was critical to accelerating our Omni strategy." – May 2020, Walmart Statement.
The acquisition of Jet.com has served its purpose of making Walmart fight Amazon. Doug successfully changed Walmart by acquiring Jet.com to provide much-needed know-how, team, and momentum to grow the e-commerce business and integrate it with store operations. Walmart's US e-commerce sales grew 74% in the first quarter of 2020, with solid results for grocery pickup and delivery services, walmart.com, and marketplace.
"It is a big advantage being an Omni channel retailer, and I think that is showing right now. We were able to use stores to fill online orders quickly"- Walmart CFO Brett Briggs
The launch of Walmart+ in September 2020 was one of the retail giant's key moves to take on Amazon. With an annual price tag of $98, lower than Amazon Prime's $119, Walmart+ features perks such as unlimited free delivery, quicker checkout at stores, and fuel discounts.
- Transformational changes for Long-term success
We're playing the long game. Our priority is to position our company for long-term success," history has shown us that companies that focused too much on the short term were doomed to fail."- Doug McMillon
Walmart struggling to adapt to the digital era, managed a true Omni-channel metamorphosis; Doug called out the need to adapt quickly to changing consumer tastes. Failure to respond to consumers' shifting preferences, including those related to sustainability, "could negatively affect its reputation and relationship with customers," potentially resulting in a loss of market share.
- Making Walmart a primary destination for the customer through an Omni channel strategy
A radical transformation is underway. Walmart is forging forward with a nearly $14 billion retail investment to become "the primary destination for customers"; to build supply chain capacity and automation, stay ahead of demand, improve the customer experience and increase productivity.
Walmart is now the second-largest e-commerce retailer in the United States. With a 5.8% share of e-commerce sales in the United States. 90% of the United States population lives within 10 miles of a Walmart store, and Grocery pickup is now available at 3,600 Walmart locations. "Having a wide range of fulfillment options, including delivery to home, collection from store – and by using stores for fulfillment – allowed Walmart to ramp up capacity in a way that many other players struggled to do. This move has become a game changer for Walmart.
"Change in Retail accelerated in 2020. The capabilities we've built in previous years put us ahead, and we're going to stay ahead."- Walmart president and CEO Doug McMillon
- Imagining new ideas to stay ahead
Getting investors excited about the growth prospects for a $560 billion global business, however, requires fresh thinking about new sources of revenue. So Walmart is focused on scaling businesses such as its marketplace and fulfillment services, advertising, financial services, data monetization, and last-mile delivery, even as it increases the productivity of its existing selling space."
"Those other platforms, health and wellness, and financial services, for example, are things that Walmart can weave together seamlessly. We believe the big winners in Retail will be those that deliver a unique interrelated ecosystem"- McMillon.
Frank Blake, CEO- Home Depot (2007-2014): Righting the ship and restoring culture
Frank Blake took over as chairman and CEO of the company in January 2007, just as the financial crisis was starting to fester. Blake, an "accidental CEO," was battling stagnant sales, a slumping housing market, flagging customer service, and an antiquated supply chain. Blake rebuilt Home Depot's supply chain, rethought its retail strategy, and was responsible for righting the ship.
'This guy is too much of a nice guy,' "But from what he faced from a reputation point of view, he gets very high marks in righting the ship. He's been the calmer-in-chief for that company."- Jeremy Garlington, Managing partner of Point of View.
Blake inherited a mess of problems to deal with when he took over. He was credited with turning the troubled company around, putting the focus back on the retail business, and restoring the culture fostered by its founders.
- Candor without ego
"What Frank Blake lacked in the retail experience, he made up for by listening and confronting the realities, sensibility with ego, with high degree of humility." He made some of the toughest decisions in the most challenging economic and internal business situation ever faced by Home Depot."
Self-effacing and candid, the 62-year-old Blake was the opposite of his predecessor Bob Nardelli. But he still had to confront some ugly realities. Blake laid off 11,000 staff. He stopped building new stores and started investing in existing stores.
"What made Frank Blake adept was that he brought a sensibility without ego to Home Depot." One step Blake quickly took was to consult regularly with Marcus and Blank, the founders— and to make it known he did so. He regularly walked stores with them and had them speak at the annual rally to motivate managers.
He confronted the issues head-on by not shying away from conflict and listening to people to determine where the problems were. As Carol Tomé, the CFO, said, "He invited conflict into our decision-making. We were conflict-hesitant. Frank asked many questions that made you say what was working and not working."
- Not afraid to take the tough call with a clear sense of direction
Improving Home Depot's retail business is the company's highest priority.- Frank Blake, CEO- Home Depot
Shutting Expo stores to strengthen core business
In January 2009, Home Depot announced that it was shutting down its high-end decor 34 EXPO design center stores and shrinking its support staff, with both moves resulting in a reduction of 7,000 jobs.
"Exiting our EXPO business is a difficult decision. At the same time, it is a necessary decision that will strengthen our core Home Depot business." Frank Blake - CEO- Home Depot
Selling off HOME DEPOT supply
After taking over as CEO of Home Depot, Blake's first decision was to sell HOME DEPOT Supply-its wholesale business and focus on its core retailing business to a group of private equity firms for $10.3 billion. The division was created in 2000 when Nardelli began an aggressive $8 billion acquisition campaign, snapping 38 companies to form HOME DEPOT Supply. HOME DEPOT Supply's $12.1 billion sales made up 13 percent of The Home Depot's revenues in 2006.
- Epitome of Servant Leadership
A significant key to Blake's success was reinstituting a leadership model that the co-founders Bernie Marcus and Arthur Blank had used – the inverted pyramid. Every Sunday, he hand-wrote dozens of thank-you cards, most of them to store employees who helped customers solve problems. He had a monthly live call-in TV show, InBox Live, broadcast internally to Home Depot stores. Any associate in any store could ask him questions, and they did. The questions, and his answers, were unscripted.
He brought back Homer badges to award store employees for excellent service. In 2007, he began granting restricted stock to assistant store managers. And he made it easier for store employees to win bonuses. Spending on such bonuses rose nearly sixfold to $146 million in fiscal 2009.
"He has a high degree of humility, and It's not just his words, but his actions. Also, associates love him. ," - Marvin Ellison, Home Depot's executive vice president of US stores.
Frank Blake simplified the business, helped improve customer service, provided the best value for its customer in Home improvement retailing, and led Home Depot ahead of the curve compared to its competition. Blake is viewed as a folk hero among Home Depot employees across the company.
Fran Horowitz: The Architect of Abercrombie & Fitch’s Revival
“We don’t see it happen very often, “I don’t think I’ve ever seen a brand come back from the dead this fast.”- Jonah Lupton, CEO of Lupton Capital
Ten years ago, Abercrombie & Fitch appeared to be on the verge of collapse—a reminder of a retail period characterized by exclusivity and controversial advertising. By 2016, it was known as "America's most hated retailer." However, fast forward to today, and Abercrombie has pulled off one of the most remarkable transformations in retail history. The company's stock has seen a remarkable increase of over 400%, rising from $32 to $180 per share in the past year. In 2023, Abercrombie's share price surged by 285%, making it the best-performing stock on the S&P Index, surpassing even Nvidia. Over the last 12 months, the company generated $4.03 billion in revenue, with a 10% year-over-year growth.
When Fran Horowitz joined Abercrombie & Fitch in 2014, the company was grappling with significant challenges. “I joined the company in 2014 and it was a really tough time for both brands,” Horowitz reflected. Her leadership marked the beginning of a crucial transformation.
The company’s turnaround was driven by understanding customer needs. “We learned that [the customer] wanted affordable, quality, stylish dresses for all of the celebrations that she was going to,” noted Kristin Scott. This customer-centric focus became central to Abercrombie’s rejuvenation, guided by Horowitz’s commitment to “keeping the customer at the center of everything we do.”
Horowitz championed a “test and learn” approach, with her mantra being, “If something is not working, we own it, pivot and keep going.” This “always forward” mentality has been instrumental in pushing the global team to evolve and excel.
When Fran Horowitz became CEO of Abercrombie & Fitch in 2017, the brand was known for exclusivity and outdated marketing. Horowitz faced the challenge of modernizing Abercrombie’s image while staying true to its core identity.
- A Customer-First Approach
Getting close to the customer and understanding what they are looking for is the win. Put out there great product, fashion and an equation that they are excited about. They’re willing to spend,” she shared on CNBC “'Squawk on the Street,”
Fran Horowitz’s customer-centric approach has been central to Abercrombie & Fitch’s transformation. Recognizing that the brand had lost touch with modern consumers, she pursued a simple but powerful solution: listen to the customer. By gathering insights and staying connected with shoppers, Abercrombie overhauled its product lines and reimagined the store experience.
- Broadening the Target Segment
Abercrombie & Fitch has expanded its focus, now appealing to a broader audience beyond its traditional teenage demographic. Instead of targeting exclusively teens, the company has shifted its sights towards young adults in their mid-to-late 20s. This marks a significant departure from the approach during the previous CEO, Mike Jeffries era, which was centered around teens and a narrow, idealized image of "cool.
- New Age Marketing: The Power of Influencers
Influencer marketing has become a cornerstone of Abercrombie & Fitch's strategy, enabling the brand to connect with its digitally-native audience more effectively and cost-efficiently. CEO Fran Horowitz emphasizes that influencers and affiliates play a critical role in the company's business model. The user-generated content they create strikes a chord with consumers, offering an authentic voice that Horowitz believes is crucial in today's market.
By authentically engaging with consumers on platforms they love, Abercrombie & Fitch is successfully navigating its rebranding journey, proving that influencer marketing can be a powerful tool for business reinvention.
- Overhauling Merchandise and Expanding Size Range
Having that merchant mind is the way a merchant thinks about the customer and connecting them to product. That is why Abercrombie I think has really come up from the trenches of their past.”
A critical part of Abercrombie & Fitch’s remarkable turnaround has been its complete revamp of merchandise and an expanded size range, addressing inclusivity and evolving customer preferences. Fran Horowitz, with nearly 30 years of merchandising experience, spearheaded these efforts by emphasizing that product quality and attention to detail were central to the brand’s resurgence. Her “merchant-led” approach fostered a culture of craftsmanship and accountability, ensuring that product innovation would be central to the company's transformation.
- Revamping the Store Experience
“The storefront really does exemplify where we are today. It is a welcoming, inviting, inclusive brand. Very different than what our heritage was in the past." – Fran Horowitz
Abercrombie & Fitch has undergone a significant transformation in its store experience, moving away from its previous dark and exclusive atmosphere to create more inviting and inclusive spaces. This shift is part of a broader strategy to connect with Gen Z shoppers and appeal to a wider audience, including those seeking office attire alongside casual wear.
- Balancing Digital and Physical Presence
Horowitz combined e-commerce growth with a strong physical retail presence, adapting quickly to customer feedback and market changes. Abercrombie & Fitch's turnaround has been significantly bolstered by its robust digital strategy. The company’s commitment to e-commerce and digital innovation has been pivotal, with online sales surpassing $1 billion for the first time in 2018.
The integration of online and offline shopping experiences has been a key focus. The implementation of services like buy online, pick up in-store (BOPIS) has enhanced convenience for customers, bridging the gap between digital and physical retail. This omni-channel approach not only broadens Abercrombie's reach but also aligns with modern consumer expectations for a seamless shopping experience.
What I learned very quickly is the culture needs to come from the bottom to the top, and not from the top to the bottom. That was a big welcome change for everybody. I did a listening tour, I met a lot of associates, I do a lot of trips to make sure I’m staying in touch with the associates.- Fran Horowitz, CEO-A&F
- What is the DNA of a Visionary leader
Visionary Leadership is transformative; it anticipates events, connects the dots, influences the future, and enables people to flourish in fundamental ways to produce extraordinary results that make them relevant and stay ahead of the curve.
Visionary Leadership requires total involvement, tremendous hard work, a willingness to put everything on the line, and continuous engagement. The hallmarks of a visionary leader: are big-picture, forward thinker; innovator; inventor; someone out to impact the world with a compelling vision all their own and in ways never before seen. Based on the examples of these six visionary leaders in the retail industry, here is the DNA of Visionary Leadership and what it takes to become visionary leader.
Extraordinary leaders find meaning in—and learn from—the most negative events. Like phoenixes rising from the ashes, they emerge from adversity stronger, more confident in themselves and their purpose, and more committed to their work." 12
- Conclusion
What leaders really do is prepare organizations for change and help them cope as they struggle through it. – John P. Kotter, Professor at Harvard Business School
Managing crises requires more than reactive problem-solving; it demands visionary leadership that anticipates challenges, inspires collective effort, and drives transformational change. Visionary leaders, as highlighted in this discussion, share a common thread: they embraced uncertainty, empowered their teams, and prioritized both purpose and adaptability. They turned obstacles into opportunities, ensuring their organizations emerged stronger and more resilient. Yet, despite its recognized importance, visionary leadership remains a rarity. This may stem from a lack of practical understanding of how to nurture and apply it.
Very little is known in the way of usable knowledge about Leadership, and in the form of the conceptual framework- Rakesh Khurana, Professor at HBS in his Book' Higher aims to Higher hands
Rather than relying solely on theoretical frameworks, we can look to great business leaders of the past to uncover insights into three vital questions: What is visionary leadership? How does it stand apart from other leadership styles? And What is the DNA required to develop it?
This article is a humble attempt to demystify the concept of visionary leadership and create awareness about its importance, drawing from the experiences of five leaders in the retail industry who, against all odds, steered their organizations through turbulent times. However, understanding and mastering visionary leadership demands more work, research, and collaboration from individuals, organizations, and business schools.
We have embarked on an ambitious project to explore and test these initial findings by studying more than 50 visionary leaders from the past 150 years of the retail industry. These leaders have consistently made a difference, despite economic upheavals, shifting customer behavior, aggressive competition, and rapid advancements in digital technology. They have demonstrated that true leadership is not only about navigating the immediate crisis but also about creating a sustainable future for both their companies and the people they serve.
As retail evolves at an unprecedented pace, visionary leadership is needed at all levels to manage change effectively. Leaders who can inspire, innovate, and drive meaningful transformation will not only navigate crises successfully but also ensure enduring success in the turbulent digital era. Anyone can become a visionary leader by understanding the DNA of such leadership and applying it in real-world situations. Now more than ever, it is time to embrace visionary leadership to stay ahead and thrive amidst uncertainty.
Instead, I believe visionary Leadership is something that can be developed, something that's practical and real, something that can be embraced by anyone willing to invest time into it. It's a lot like playing golf or tennis: We can all learn how to play these sports."- Rob-Jan De Jong in the book 'Anticipate'
References:
What it Takes to Be a Retail Visionary, https://www.thehersheycompany.com/, Kate Silver
Visionary Leadership: 5 Qualities of a Visionary Leader, masterclass.com, January 2022
visionary-leadership-five-insights-to-shape-an-emerging-industry, Anthony Petrucci,forbes.com, January 2019
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