Are outsiders required to tackle disruption?
An article from Forbes detailed how a number of retailers are making executive hires outside their sector or even industry to bring a fresh perspective to managing the ongoing digital disruption.
The hires this year cited in the article include:
- Janey Whiteside, who spent two decades at American Express, becoming Walmart’s first chief customer officer;
- Darcy Penick, the former CEO of Amazon’s fashion subsidiary Shopbop, becoming president of Neiman Marcus’s Bergdorf Goodman unit;
- John Gehre, former head merchant at H-E-B, joining The Container Store as EVP of merchandising and planning, the retailer’s first executive hire from outside the company;
- Helena Foulkes, EVP of CVS Health and president of CVS Pharmacy, becoming Hudson’s Bay Co.’s CEO.
“I think it is the natural and right progression, given the size and scale of the transformation that is underway,” said Chris Walton, a retail consultant and former VP of Target’s Store of the Future, told Forbes of the trend of outside hires.
In Walmart’s case, Ms. Whiteside’s hiring marked the first time the discount giant appointed a female chief marketer or one recruited directly into the position from outside. Walmart U.S. CEO Greg Foran and e-commerce chief Marc Lore said in a note to employees provided to Reuters, “Janey will play a critical role looking after our brand and thinking through the customer journey – from acquiring new customers to their shopping experience and resolving any issues they may have.”
An article last year from Drapers on surprise hires at Marks & Spencer and House of Fraser likewise noted that boards have become more open to outside hires because they’re more likely to embrace new business models.
“In an era when retail seems to be struggling more to keep up with its own innovations, such as ecommerce or logistics developments, we need to look a little more creatively at skillsets,” Mary Anderson-Ford, managing director at recruiter AquaRetail, told Drapers.
Outside hires have been on the rise overall as many industries are facing disruption, but the track record for outside hires in retail seems mixed. For every Hubert Joly (Best Buy) or Brian Cornell (Target) that have been beneficial, a Ron Johnson (J.C. Penney) or Stefan Larsson (Ralph Lauren) make headlines.
- Like Walmart’s Chief Customer Officer From Amex, Retailers Tap Outsiders To Remake The C-Suite – Forbes
- Walmart Hires New Chief Customer Officer And New CMO From Outside – Advertising Age
- Walmart creates new executive role aimed at serving customers – Reuters
- A Study of Hospitals Found That Outsider CEOs Make Their Organizations More Productive in the Long Run – Harvard Business Review
- Why fashion is recruiting outside the box – Drapers
- 2015 CEO Success study – Outsider CEOs – PwC
DISCUSSION QUESTIONS: How would you rate the pros and cons of hiring a CEO or key executive from outside the sector or outside the industry? Generally, when do such external hires make more sense versus an internal hire?