Candor’s Role in Transforming Retail
NEW YORK, NY– February 16, 2018
Sam Kliger, founder of KWI, takes a page from Jack Welch to change his company, and help retailers too.
Sam Kliger, founder and chief executive officer of KWI, departed a formal education in computer science and math in the mid-1980s to pursue a vision of offering computerized systems to specialty fashion apparel retailers.
The genesis of his vision was based on observing long lines of shoppers at a Benetton store. After unsuccessfully finding a computer system to help the retailer out, Kliger created the first cloud-based platform. Today, that solution has evolved into a “unified commerce” cloud-based platform that is used by fashion brands such as 7 For All Mankind, Bandier, Veronica Beard, David Yurman, Tom Ford and Nars, among others.
And amid the current changes in the retail and fashion apparel space, Kliger’s company recently acquired e-commerce firm BestRetail in a deal that he describes “wasn’t a rocket science acquisition, but kind of a common sense acquisition.” Changes in the retail industry – such as the growth of e-commerce and the Amazon-effect – are forcing companies to transform themselves, and Kliger said there’s a lot of pain points in the process – mostly of the internal kind at each brand.
Kliger has some advice for retailers and brands, and it isn’t about investing in the latest e-commerce
or CRM platform. His advice has to do with people, and it’s based on the transformation of his own company that started with insights from a guy called Jack Welch.
Seven years ago, Kliger found himself– at first – unwillingly attending a three-day conference in Palm Beach. But the management sessions with former GE chairman and business guru Jack Welch captivated Kliger. He learned about the Candor’s Role in Transforming Retail Sam Kliger importance of candor and of resistors. “Candor refers to the absolute necessity of an organization and its people to be candid with one another,” Kliger explained. “And when I mean candid with each other, I mean two-way candor up and down the organization.
To be candid with his or her prospective team members, his or her peers and his or her boss, and vice versa.” Why candor? Candor is not just about the courage to have an open conversation. “Candor is a critical component of agility, because those who react the quickest, get to the quickest outcome,” Kliger explained. It’s noteworthy that candor plays a key role when KWI is working with clients. For example, the implementation of “agile development” has allowed for candor to play a critical role in the development process, Kliger said adding that when the company built its most recent Cloud 9 POS software, “it had the feedback of our clients at the heart of the product.” Kliger said a “lack of candor is an absolute killer in any business in today’s world.”
He cited the board members of Blackberry at the onset of touch screen technology. It was a lack of candor that contributed to the misguiding of the company, Kliger said. “Candor is easy when there is good news to share,” he added. “We believe it is equally, if not more, important to share bad news. And we celebrate when that happens.”
With retailers, it is a lack of candor that causes the systems they invest in to not be fully harnessed. Often, they’re more focused on the “shiny new object,” but don’t utilize the full benefits. Kliger said this is why it is critical to galvanize the people, the employees, within the organization.
With “resistors,” Kliger said many businesses “are resistant to change” and it is across all levels of an organization. “Resistors are the cancers to every organization and that’s why people don’t change, and that’s why companies falter.” For his part, KWI transformed itself by fostering candor with the organization and letting go of the resistors. Kliger said retailers and fashion brands need to deploy the same approach. “I think retailers in general have a resistive tendency, because they’ve been doing things such a long time that they have difficulty changing.” And that includes being open to the idea of using new technologies to improve the shopping experience or increase internal efficiencies. To make it work, though, Kliger cites the wisdom of Jack Welch, who noted that business is people- driven. And that’s where the change needs to occur. “If the director of HR reports to [chief financial officer], fire that person immediately, and find the smartest person in the world that you can find and have them report directly to you.” And put them in charge of employees. You have to make your organization a “people first” one, Kliger added.
At KWI, “we’re all together in one building where we can learn from each other,” Kliger explained. “Retailers have a challenge with their employees being geographically dispersed. It makes it harder to communicate effectively.” When asked about KWI’s solutions, and “unified commerce,” Kliger is blunt, and said it’s not jargon. “What does unified commerce mean?” he said. “Unified commerce means that a customer should get the same experience online as they do in the stores and vice versa. Unification of commerce.”
Kliger acknowledged that while unified commerce is straightforward, there’s a lot of catchphrases in the market – much of it misleading. “Tech companies use it to lure people in,” Kliger said. “But machine learning and artificial intelligence is the biggest quack of falsehood in the world. A computer cannot think. Show me a computer that can think. That doesn’t exist. Retailers think that by buying artificial intelligence and machine learning, that they can replace the job of a buyer. Imagine someone like a Marvin Traub being replaced by machine learning. Is that a fantasy? It’s impossible.”
“Unified commerce means that when I shop online, I’m able to transact pretty easily and when I walk into a store I can transact pretty easily – online and point of sale are the same,” the ceo said adding that most retailers have separate systems for online and in-store and never shall the twain meet. “Which makes marking down items difficult,” Kliger added.
Kliger was quick to note that there’s no silver bullet solution to be successful during retail’s transformation. Even with unified commerce, organizational silos have to be removed. Again, Kliger goes back to the wisdom of Jack Welch. “You have to implement candor,” Kliger said. “You must have an organization that can have a candid conversation with each other, because if you don’t you don’t have a shot.” “And the customer too,” Kliger added. “The customer has to come first.”