Wednesday, November 16, 2011

Consumer ability to improve operational agility?

In the McKinsey Quarterly article “Competing through organizational agility” they discuss Zara, the Spanish clothing store as a good example of operational agility. Operational agility they define as “the capacity to identify and capture opportunities more quickly than rivals do” Zara was used as an example because it uses real-time raw market data to capture these opportunities.  I think it is interesting to explore the role that consumers can play in improving operational agility. Zara is able to use their structure to go into the field and into their stores and figure out why something is not selling. The article states,

“Daily sales statistics revealed that the items were not selling but shed no light on why. Zara marketing managers visited the stores to explore the situation in person and learned...women could nto fit into their usual sizes”.#  

I wonder if you could add the consumer into the above process, if it would improve operational agility.  I work for a retail clothing store and learned yesterday that as a sales associates we are supposed to solicit feedback from our customers and nightly report that feedback to my store manager.  The store manager then reports it to headquarters and the appropriate department explores the problem.  For example, last week we learned one of our blazer’s buttons fall off very easily.  Within 36 hours of hearing the complaint from two different store managers, headquarters and the design team pulled the blazers out of stores and fixed the button problem.  This seems to be to be similar to Zara’s model, however it engages the consumer to provide feedback and then is reactive to that feedback. Rather than sending marketing managers to the store to discover the why, they skip a step by directly engaging with the consumers to determine why.   I am a frequent customer of the store and before I worked there never knew that. Therefore, the  problem is the company does not advertise the ways in which the consumer can do this and ultimately it is a huge help for the company.   On the one hand, I can see where a company is hesitant to admit failure, however involving the customer more seems like it may build brand loyalty.  It provides a basis that customers know they can rely on the company to fix their mistakes and make a quality product moving forward.
The idea of customer feedback is not fit in well nor is it advertised as part of the process. However, it seems that if built into the design, the process can be better streamlined and operational agility can be improved.  The article points in to the idea of “boosting the odds of beating rivals to opportunities”.  Involving the consumer more heavily may help as ultimately a retail store like Zara needs to appeal to and is driven by its consumers. I am wondering therefore what role consumers can play in improving operational agility and how organizations can design their business models to do so.  As I ponder this, I am drawn to looking at social media models that are so reliant on feedback by consumers for development because it is a communication stream.  It is this communication stream that retail stores seem to lack is a direct communication stream or plan to allow consumers to participate.  I am curious as to what role they can ultimately play in improving an organization’s operational agility.

Sources: Sull, Don. “Competing through organizational agility”. McKindey Quarterly.

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