American retailer Bed Bath & Beyond is in the headlines after its new CEO fired six C-suite executives.
Virtually every traditional retailer has been affected by the rise of online retail, and Bed Bath & Beyond is no exception. Like so many retailers, Bed Bath & Beyond has struggled to deal with the impacts of digital, raising questions about its future.
In an effort to address the challenges it faces, the company recruited Target’s chief merchandiser, Mark Tritton, to be its new CEO in early November. The hire made a lot of sense as Target is one of the top examples of a large traditional retailer that has found a way to adapt and be successful in the digital era, and Tritton is said to have played an important role in that.
But to fix what ails Bed Bath & Beyond, Tritton apparently believed that new blood was necessary, as he waited little more than a month to fire the company’s top merchandising, marketing, digital and legal executives. Bed Bath & Beyond’s chief brand officer resigned a week before these terminations took place.
According to Tritton, the brutal culling of Bed Bath & Beyond’s C-suite is “the first in a number of important steps we’re taking” and the company says it will seek “fresh perspectives from new, innovative leaders of change” when filling the roles permanently.
Next year, Tritton will unveil his turnaround strategy for Bed Bath & Beyond, which has seen same-store sales decline in each of the last 10 quarters, and there is little doubt that digital will play a huge role in that strategy.
Change versus transformation
Digital transformation is a hot topic in many industries, including retail, and is generally seen as an urgent imperative. Yet many of the topics that digital transformation touches on, such as corporate culture, organizational structure, cross-functional alignment and technology acquisition, typically focus in practice on change, not real transformation.
Yet there’s a significant difference between change and transformation. As Ron Ashkenas, the co-author of the Harvard Business Review Leader’s Handbook and partner emeritus at Schaffer Consulting, has explained:
Transformation is another animal altogether. Unlike change management, it doesn’t focus on a few discrete, well-defined shifts, but rather on a portfolio of initiatives, which are interdependent or intersecting. More importantly, the overall goal of transformation is not just to execute a defined change — but to reinvent the organization and discover a new or revised business model based on a vision for the future. It’s much more unpredictable, iterative, and experimental. It entails much higher risk. And even if successful change management leads to the execution of certain initiatives within the transformation portfolio, the overall transformation could still fail.
From this perspective, companies should consider that transformation is not necessarily a process that can be easily controlled and executed using the existing resources of the business, human and otherwise. Instead, transformation can demand quick and drastic action, sometimes at the very top of the organization.
While not every company will need or even be able to fire its top leadership in one fell swoop, Bed Bath & Beyond’s C-suite purge is a reminder that in at least some cases, transformation realistically cannot occur with old blood, especially in the executive ranks. As companies embark on digital transformation journeys, or assess where they are at with ones already underway, they are wise to honestly evaluate the ability of those in charge to effectively lead a wholesale reinvention of the business.
In cases where they are not, Bed Bath & Beyond-like action might be appropriate – no matter how ugly it is.