The Tortoise & the Hare: Short term dollars vs. Long term strategy

This is an article I wrote several years ago and posted on LinkedIN. I decided to re-post a few of the articles I've written because as many of us start to rejoin the workforce and adapt to our "new normal" its important to polish our skills and keep our employees top of mind. Now, more than ever, employees are facing unprecedented challenges. We as leaders, experiencing the same upheaval, will be looked at to help navigate through new territory.

It's been a year since my last article, and brick and mortar retail is encountering more challenges on an even broader scale.

Bargain shoppers, online competition, mass availability - it is truly a buyer's market where convenience is king.

While I don't believe that "Retail is Dead", I know first hand that it is continuing to change at a pace that most retailers aren't equipped to deal with; the first course of action for most seems to be deep discounts, layoffs, and shuttered doors. While in some cases it is necessary to rid yourself of dead product while scaling back your retail footprint, if these drastic measures aren't combined with a shift in perspective and newness in strategy, business will continue as usual, meaning, a steady decline and ultimate failure of a situation you've managed to prolong for maybe a few months or even a year.

I have been through, and am currently experiencing, several brand restructurings and re-brandings. My former employer Coach is probably one of the best examples, and teachers, I've come across. Hardly immune to recession, the accessible luxury category (think Coach & Michael Kors) was hit hard. The unthinkable of laying off staff and closing doors began with a closure at one of its factories in Italy. Then, the typical snowball effect took place with home office positions being eliminated, low volume store closures and districts re-aligned. So many retailers have done this and yet still failed - what not only made Coach able to do this on such a small scale in comparison to the size of the brand, but come out on the other side with a new face in the Fashion world?

In my opinion, as someone who experienced it in the beginning and closely watched it's development under new leadership, it was a two-fold strategy. First, they took care of their people. It's never a pleasant thing when letting people go, but making sure they are taken care of (whether placed elsewhere in the organization, severanced out, or assisted in their search for new employment) is crucial. It speaks volumes about your relationship with your employees and it is all around just good press.

Secondly, they defined who they were going to be as a brand and then implemented the changes with new leaders, store structures, and online presence. They followed the money and expanded their outlet presence while capturing a new demographic - the fashionistas and "It" girls and boys of the fashion world less affected by a downward turn in the economy than it's mainstream client.

This may seem like common sense, but it is a vast undertaking with a lot of heartache. Another transition I lived through with a much smaller company, didn't fair so well. The brand tried to grow overseas without first having its home base secure; people were stretched too thin, the original markets failed and eventually the brand folded. It was definitely a cautionary tale of long term vision versus short term dollars - the short team gains (overseas interest) seemed to be a blessing, but in the end it was the downfall of the company.

While retail, more so than most industries, is all about adaptability, flexibility and the ebbs and flows of the economy, it seems the secret to success is consistently a few things: taking care of your people (if only because no one wants a disgruntled employee facing your customer, especially when times are tough), having a strong sense of self (brand), and a long-term strategy. There's a reason we're all taught from a young age - slow and steady wins the race.