Are we heading for a backward step in E-commerce?

I've been talking to a lot of digital marketers recently - all very talented and experienced online marketers (mostly 'Head of E-commerce', 'Head of Digital', 'Digital Marketing Director' types) - and what do I see that they have in common?

That they're leaving their current jobs, mostly at large multi-channel brands, or are looking to leave. And mostly they're going to work at Google it seems. Or a dotcom.

What I don't think these large organisations quite realise is that they're haemorrhaging the talent they desperately need to take them forward in the digital arena. 

And the reason they are leaving? Because they are frustrated. Either with the continued lack of progress and lack of urgency in pushing forwards with digital initiatives; or because these large organisations are actually now imposing retrograde steps upon a digital marketing or e-commerce 'department' that have fought for the last few years to get where they are. 

Typically what is happening is that the corporate "mothership" (or relevant Board Director) now wants to take back control of the e-commerce capability and integrate it with the rest of the organisation. Which is good news in theory (multi-channel marketing and all that..) but in practice seems to mean imposing ways of working on the e-commerce team which just don't work very well for digital: inappropriate team structures, business processes, or budgeting processes. 

So the digital marketer who, after 3 years of hard grind, has finally learned how to do things well and has a capable and battle-hardened team around him/her, is faced with a slew of internal politics and impositions which are clearly retrograde steps.

So they leave. 

And 6 months later that big organisation still hasn't been able to find a suitable replacement (they find out too late that these people are like gold dust).

As all the good people in digital marketing lose patience and jump ship to the likes of Google I fear that we will be seeing many large companies' web sites and web operations actually take a backward step in the coming years. 

Most of all I'm worried that Marketing Directors are going to put their advertising agencies in charge of rebuilding their websites. That's a scary thought.

Ashley Friedlein
CEO, E-consultancy.com

On 11:13:04 20 April 2006 textor wrote:

 

Back to your manager jumping ship.  You already proved the lack of management professionalism in the organisations you cite because apparently there was no succession planning.   

Thhpt.

I've been in fairly large organisations and I've never seen succession planning worked well. Especially within e-commerce.

That said I tend to agree with the gist of your follow-up. The opportunity is there for a new generation of Senior E-Commerce managers to integrate the online channel into the main business.

Too often the 'Corporate Mothership' discovers that the online channel just doesn't deliver because of the very way it has been structured. Little things like Margin Control, Supplier Relations etc etc are the bread & butter that the rest of the business has to deal with day to day, and in fact are *business critical*. If E-commerce can’t play by the rules that the rest of the company has to play by, then it will stall or start going backwards.

It is significant that Ashley's post described how some of these people were heading off into dot.com land. I'm not surprised. Without being unduly snarky a whole generation of business managers have grown up who are more comfortable playing with companies where the real rules of business don't apply. The real world doesn't work like that.

And again without being overly critical of my peers, it might be a good thing. The next phase of e-commerce is going to be about ensuring that a hybrid business model develops that merges the business control practices of the Real World (TM), with the innovation, flexibility and opportunities of the online channel. What this phase will need will be Managers that are hard headed, prepared to bare knuckle fight at a board level if needs be, but also understanding that their first priority has to be the Business Objectives, not the exigencies of an online channel.

Im one of those people that Ashley is referring to. Im posting this anonymously as I dont want to offend/highlite the business that i left.

The reasons that I left are similar to what Ashley said:

Incompetence/Frustration - those in charge were unable to identify the true business drivers and capitalise on them. Every day i saw basic things done wrong and my protests fell on deaf ears. The main reason incompetent people get senior roles, is political.

Salaries - After highliting increasing salaries in the industry, coupled with employers refusal to increase likewise, it was only when i resigned did they want to match/increase peoples salaries. This is an appalling way to run a business. You should not have to quit to get a pay rise.. incidently we are talking 100% pay increases or more in some cases, including mine.

Visibility of work -This is a tough one. eCommerce types tend to do a lot of 'invisible' work. It is this lack of visibility/recognition that means that eCommerce types get neglected/under-resourced. Its only when the eCommerce person gets pssed off and leaves, and this invisible work stops, that the results start slipping and nobody can work out why.

Ultimately I left because i know it can be done better.

The end result is that we are going to see an increasing trend of poorer results in these businesses. I can picture a bunch of senior staff in those organisations sitting around a table arguing about poorer and poorer results. And they arent going to be able to work out why...??

The good news is that there is a new generation of eCommerce professionals on the way up. We are going to see (seeing already?) the increasing move away from fluffy 'branding' warm and fuzzy types - to hard numbers, ROI driven, minimal bullsh!t, analytical eCommerce professionals.

I welcome the change with open arms.

regards
..

On 10:48:41 25 April 2006 anne_onymous wrote: 

Great to see you reply! Just a couple of observations

Incompetence/Frustration - those in charge were unable to identify the true business drivers and capitalise on them. 

Interesting:  do you mean those in charge of the RealWorld business were unable to identify the true online business drivers, or in fact that the top people were unable to identify RealWorld business drivers?

If the latter then I wonder how long those types of MDs/CEOs will keep their job:  a non profit making company is dead in the water.

If the former, then I question whether or not you are looking through the right end of the telescope.  Are you keeping mind that the only reason that company should exist is to make profit for its shareholders? (I'll argue this in the instance of Bodyshop or Google another day).  They aren't day care centres or ideas labs for employees!

Having worked in mid/senior management in three well known Clicks & Mortar companies, my observation was that generally the MDs/CEOs involved grasped very well that E-commerce was too big an opportunity to miss out on. 

The issue is that they are cost shy: they know that the online channel is unlikely to generate serious profit straight away, but are wary of hocking the business for a chance to land grab internet share.  Many of them have reached the level they have in the few years since the 1998/9 dot.bust and watched as boards  ended up writing off vast development/marketing budgets on tulip fever. Each of the three MDs I have worked with over the period have practically verbatim responded to pleas for spend with the identical rejoinder: 'will it be profitable?'.  

Note NOT 'Will it generate sales?' or 'Will it add Value?'.

Every day i saw basic things done wrong and my protests fell on deaf ears. The main reason incompetent people get senior roles, is political.

Hard to deny. But that I'm afraid is almost inherent in large organisations.  Google will end up the same way :¬)   

That said having worked in E-commerce for retailers till recently, I've now bailed out to work for a web development agency because I prefer the small scale, non political atmosphere..  so maybe I'm a hypocrite :¬)

Salaries - After highliting increasing salaries in the industry, coupled with employers refusal to increase likewise, it was only when i resigned did they want to match/increase peoples salaries. This is an appalling way to run a business. 

Really?  Certainly salaries are always sensitive, but generally I think that Retailers are sensitive to the market place salary. But they are also sensitive to what the company can afford. They are not comparing Internal Marketing or E-commerce positions to say Advertising houses, but instead to say equivalent roles within their organisation.  

To be honest with the exception of the IT team (where developers have always been able to command salaries out of all proportion with their seniority or experience) salaries across business are tightly controlled.  You will never earn the same salary as for working for a dotcom or an agency, but the truth is that the opportunities and roles are fundamentally different.

Visibility of work -It is this lack of visibility/recognition that means that eCommerce types get neglected/under-resourced. 

Again without sounding like a broken record, every team from Ecommerce through to Marketing, Buying and IT always says this.  It is almost bible that a key gripe wherever you are based in a large company that you never have enough resources or enough recognition. With the possible exception of HR. Which always boggles me. 


The end result is that we are going to see an increasing trend of poorer results in these businesses. 

Or possibly the opposite result: that sales will be lower but because of better management and cost control Online channels will start delivering significant profits. Which surely is the next, and much needed, step change in the way that e-commerce operates within larger organisations.

Looking back at what I've written, I realise that I may sound like I'm taking exception to everything you're saying: please do not take it that way! I however do feel passionate about where e-commerce should be heading, and how it ought to be behaving in the context of larger businesses.

Integrate to dominate!

Above a certain magement level in any large business it stops being about technology, or business reality and starts being about people - i.e. politics. 

People get on not because they know more about something than someone else, but because they can get the right people under them, properly motivated (and controlled so they don't lose the farm) and resourced.  They also get on if they can sell the ideas of their people internally to other managers.

Most of all they get on if they can create the perception in the mind of their boss that they are doing the above. 

My experience of top-ish managers in large organisations is that their eyes glaze over very quickly if you try and explain the detail, they just want a few sound-bites and conclusions that they can use.  Often they are so grossly ignorant of the businesss sector they are running that my mind sometimes boggles. 

(The corrollary to this is that  successful senior managers are really cr*!p at running small businesses.)

Is this a good thing or a bad thing?  

I don't know.  But that is that way it is, and if you want to get on in business you had better get good at the politics. 

Personally I never was.  I speak as I find and get interested in the detail.  Which is why I am running a small business...

Bob