Thread by @minethatdata

1 - Story time.

I read a tweet-storm tonight where the author suggested that Leadership isn't centralized but is instead local, and that a centralized group can offer support but otherwise should stand down and let localized Leaders perform.

There is much truth to this.

2 - I'll take you back to 1998 at Eddie Bauer ... that's 22 whopping years ago. My goodness.

I was moved into a Director of Circulation/Analytics role, which in the old days would have been similar to a VP of E-Commerce role today.

3 - But because of red tape at Eddie Bauer, I was essentially responsible for the profit and loss statement of the catalog/e-commerce division AND I reported to a DVP who reported to an SVP who reported to an EVP who reported to the CEO.

4 - Of course, the organization was "matrixed" as well ... meaning that the CEO (who I adored & still adore) would walk into my office most mornings at 6:45am with ideas and direction.

And ... and ... I was part of a Catalog Business Team.

5 - The Catalog Business Team had an Inventory Director, a Finance Director, an Operations Director, an E-Commerce Director, a Merchandising Director, a Marketing Director (me), and a few other Directors.

6 - So I got specific direction from the CEO ... I had to please my boss and his boss and his boss who reported to the CEO. And I had to take care of the Catalog Business Team.

7 - If you believe that Leadership comes from the top, you'd prioritize daily feedback from the CEO.

You'd also consider pleasing your marketing pipeline (DVP - SVP - EVP - reporting to the CEO).

Then you have the Directors on the Catalog Business Team. Not much power there.

8 - As a new Director, it probably took me six months to figure out that of all the people I mentioned, one person ... just one (1) ... possessed disproportionate power.

That person was the Director of Inventory on the Catalog Business Team.

9 - The two of us (Director of Inventory) basically put together all of the plans for the online/catalog business. Alone. Two of us. At a 30,000 foot level.

We created our own forecasting models, we worked together to plan every six-month season ....

10 - And then we'd present our plans independently ... the Inventory Director shared plans with the Merchandising Team ... I shared plans with Creative and Marketing and the CEO.

We'd get all the blowback and negativity, then recalibrate the plan and get 'em all to agree.

11 - Once we got agreement, we worked with our Catalog Business Team ... this team of Directors had their teams perform all of the bottom's-up work required to institutionalize the information across the company.

12 - We were able to keep our teams away from countless hours of re-work with this approach. If re-work was necessary, the two of us did it at a 30,000 foot level (10 minutes of work) and got agreement before requiring our teams to do 50 hours of work.

13 - We sandbagged our plans.

My customer file forecasts were discounted by a few percentage points.

My new customer forecasts were discounted by a few percentage points.

The Inventory Director sandbagged merchandise productivity by a few percentage points.

14 - We told our Finance Director exactly what we were doing, so that he could build a financial plan that matched our plan ... and he could have an "upside" plan that reflected what the customer could actually spend under normal circumstances.

15 - The upside plan was important when our parent company (Spiegel) got mad, or when their parent company (Otto Versand) got mad. Then finance would add in "upside" and my Inventory Director and I could agree to it because we knew customers could spend this $$ normally.

16 - This prevented us from "overbuying" merchandise (which prevented liquidations, which prevented losing money).

So when business was "normal", we were exceeding our plan by 2% to 5%, and the p&l would just "sing" ... churning our profit.

Executives love profit.

17 - And Executives love beating the "plan" authored by Finance. It makes Executives look smart.

18 - In 1999 we had the most profitable year in the 50+ year history of the online/catalog division.

We did it by sandbagging, and by applying local Leadership. We didn't wait for tops-down direction. We set the direction, then adjusted as we got feedback.

19 - Why share this now?

Well, 2021 is going to be another "Hybrid COVID" year. The front-end of the year will be greatly influenced by COVID. The back-end of the year will be the start of a "new normal".

Local Leadership within your company can adapt to the coming change.

20 - There's no reason why you (yes ... YOU) as a Manager or Director ... can't set the path for your company to follow.

You just have to be clever ... work within your system ... run scenarios, be flexibly when a C-Level guru tells you that you might be wrong.

21 - Find out the people who have "real power" in your company ... not the C-Level Executives we usually associate with power ... but the Director-Level Leaders who do the real work and get stuff done. Partner with these individuals.

Questions?
KH