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A CEO's Perspective on Change
The document discusses the challenges facing retail businesses and outlines the CEO's perspective on leading change at Shopko Stores. It describes the difficult economic environment for retailers with many store closings and weak sales. The CEO emphasizes keeping transformation efforts simple, focusing on execution, listening to operators, thinking like a customer, and empowering employees. Highlights from the past year include sales growth, cost savings, inventory improvements and customer insights driving changes. Lessons learned include the importance of the customer, empowering the business, and challenging norms.
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A CEO's Perspective on Change
- 1. Peter McMahon Chief ExecutiveOfficer Shopko Stores A CEO’s Perspective on Change
- 2. Building a Casefor Change Economic and Competitive Environment • “Everything That Could Go Wrong Did During 2013 Holiday Season” • “A ‘tsunami’ of Store Closings Expected to Hit Retail” • “JC Penney Closing 33 Stores, Laying Off 2000” • “Sears Holdings to Close Flagship Store, Expected to Shutter Another 500 Sears and Kmart Locations” • “Family Dollar to Close 370 Stores in Cost Cutting Move” • “Walmart Woes Reflect Retail Sector Weakness” • “Malls Under Pressure as Chains Close Stores” • “Retailers Feel the Squeeze in America’s Poverty Economy” • “Retail Sales Expected to Improve in 2014” • “Retail Sales Were Bad – What Now?”
- 3. McMahon’s Transformation Philosophy 1. Keepit simple 2. Focus on execution 3. Listen to your operators 4. Think small – Small is big 5. Less often is more 6. Your people come first 7. Think like a customer 8. If in doubt, do the right thing …. 9. …. But then do it right 10. Remember, EGO stands for “Edging Good Out”
- 4. Involving the Team PeopleKill Companies • Complacency • Complexity • Faulty Radar • Arrogance • Execution
- 5. Execution F2014 Highlights • Netequity value increase • Positive sales growth • EBITDA beats budget • Margin rate expansion • Free cash flow on forecast • Inventory turns improve • Restructure in Store Support brings focus on formats and payroll savings • ALCO stores integrate into Hometown format • Customer insights form basis of range changes in Hometown Stores • Store operation efficiencies lead to savings in operating costs • Lease negotiations successful • Product availability at record high • COGS negotiations realize significant savings • Sales of Rx Care successful
- 6. Lessons Learned • Customeris King - listen • People make the difference • No place for arrogance • Set the bar high • Challenge the norms • Empower the business • Reward results • Strive for excellence
- 7. Leaders Find Lessonsin the Strangest Places • Miss the tunnel at the end of the light • Listen to the river • Find the jewel in the toad’s head • Avoid the funeral of a living corpse
- 8.