Lessons Learned: Why Companies Succeed … and Sometimes Don’t

Over the past year and a half we've presented numerous points of view, arguments and assessments around what we view as the opportunities and challenges of creating a successful workplace and what makes up the new “brand” of successful leaders. The question remains: why are some leaders successful and others not? There are endless studies that address this question, as well as analysts that pore over data to understand that elusive quality: SUCCESS. We offer less data and more (hopefully) practical common sense and experiential arguments as to what constitutes effective leadership.

Why Some Leaders Succeed in Industries When Others Don’t

In a recent Wall Street Journal article reviewing the success of Kohl’s in comparison to its peers, CEO Michelle Gass was asked what sets the company apart from other retailers both in its space and outside of it. Gass stated that Kohl’s doesn't think of itself as a department store; from the early days the leadership of the business created a model that focuses almost exclusively on knowing, understanding and learning from its core customer. What does it take to make it easier and more convenient for the customer to shop in any Kohl’s store?

When reading through the interview with Ms. Gass, several points were made clear.

• First, when asked a question, Ms. Gass never answers with “I” but rather with “we.” She clearly sees herself as the leader, but part of a leadership team and customer base that's always top of mind.
• Second, Kohl’s consistently seeks to make sure it's relevant and adapts as the retail sector evolves. A decision was made to make the company's stores smaller and more intimate (while increasing revenue through increased sales per square foot). In some cases walls are being built to create spaces that can be leased out to brands and businesses that Kohl’s doesn't carry, but that are necessary for customer convenience. An example is its alliance with the supermarket chain Aldi. Through research, Kohl’s leadership team found a correlation between its customers and those who shopped at Aldi. An “alliance” brings the customer convenience and Kohl's more productive space (on both sides of the wall).
• Third, Ms. Gass and her team researched and studied the potential impact of Amazon.com on the consumer landscape and how Kohl's would compete with this new retail force. In 2017, Kohl's partnered with Amazon to showcase some of the online giant's electronic products, thus allowing shoppers to return Amazon purchases in Kohl’s stores. As Ms. Gass explained: “There's a lot of space for both of us. In thinking about the partnership, it was how do we take Amazon’s dramatic customer base and combine it with Kohl’s physical stores to create value for both of us.”
• Fourth, Ms. Gass and her team recognized the need to attract millennials, knowing that this group tends to avoid department stores and focuses on more experiential shopping, something that department stores simply do not or cannot offer. Furthermore, department stores tend to have an older customer base and sell more mainstream, “safer” assortments. Gass and her team engaged PopSugar, a wide-reaching social media platform focused on female millennials. Kohl’s advertised select brands on the site, and subsequently designed and produced a collection with PopSugar. The first line is now in Kohl's stores, and the results may provide a new business opportunity to expand the department store's customer base.
• Finally, Ms. Gass addressed the need for innovation and speed. She acknowledges that change can be challenging, but states that “those that are too slow will be left behind.” She and her team are focused on innovation to stay relevant and meet the needs of current and future customers.

What lessons can be learned from the Kohl’s example? Obviously, a successful leader in this age of change must recognize the importance of the team and of engaging the team on evolving any successful company. Constantly challenging norms and traditional points of view is critical to staying relevant. Embracing, rather than defensively challenging competition, can lead to successful partnerships that grow traditional business through a series of wider channels (i.e., those not necessarily tied to the brick-and-mortar experience). Speed is important, especially when seizing upon new opportunities. Opportunities don't simply appear; they need to be researched and found, and new partnerships need to be developed. Leaders must constantly look for ways to innovate. Complacency, at any time, is what kills many businesses, particularly in the retail space where trends, tastes and attitudes change rapidly.

What Sets Leaders Apart

While thinking about this article, we were reminded of some of the research we came across that looked at great leaders, and George Washington in particular. Descriptions of Washington describe him as cold and quiet as a man who rarely smiled. Yet Washington was relentless and displayed an ironclad emotional control. He led his troops, but was also one of them. During a battle, he was up-front and leading them into battle. He avoided berating those who made errors or were insubordinate. After liberating Boston, Washington sent one of his generals to march into the jubilant city, while he chose to arrive the next day without fanfare. Like Ms. Gass, who is relentless in her pursuit of innovation and relevancy, Washington had an unwavering vision and focused on achievement of success. He improvised when necessary.

George Washington demonstrated behaviors that lead to effective and successful leadership. This much hasn't changed, as seen in Ms. Gass’s current work at Kohl’s. Innovation, relentless pursuit of victory, recognizing the importance of the team, and possessing a strong emotional IQ are all factors that make one a strong leader. Yet these traits were combined with humility. When Ms. Gass was asked questions about the success of Kohl’s, she always answered using “We.” Washington preferred to let his generals enjoy adulation after a victory while he stayed in the background. None of this should be a surprise. This is what's expected of successful leaders.

In the past three years, studies have increasingly shown that humility is a core quality of leaders who inspire their teams and create an atmosphere of close teamwork, rapid learning and high performance. In fact, Hogan Assessments, a leading maker of workplace personality evaluations, will unveil a new assessment in early 2019 measuring humility in both job seekers and leadership candidates. This is extremely interesting, especially in the current climate of endless information, opinions, and the general explosion of communication platforms and social media. We've addressed the impact of social media and communication in previous articles, and admit that it's refreshing that researchers are now looking at the importance of humility as a key success trait.

Final Reflections

What about the situation where a leader and an organization fail to be relentless, lack a strong emotional IQ, and don’t exhibit humility? In the recent interviews, testimonies and news coverage of Facebook, we see an interesting case where much of what constitutes truly effective leadership seems to be absent. Both Mark Zuckerberg and Sheryl Sandberg have demonstrated a certain arrogance that's not unique, but certainly has been counterproductive to both the business and the reputation of Facebook. Their failure to address issues and the arrogance of their posturing and denials lack any remorse, let alone humility. Their obvious lack of emotional self-awareness has damaged not only the reputation of their company, but has also had an impact on its financial results as well. This is only a single example. There are many other examples of how leaders who do not emulate long-term proven behaviors fail over the course of time. So why is it that something so simple is something that seems so difficult? Maybe you can answer that …

Frederick Lamster is the managing director at ZRG Partners, a progressive midsized global executive search firm that uses a proven, data-driven approach. Sharon Tunstall is a consultant at Connect the Dots, a leadership solutions consulting company.