How Lulu Lemon Overcame a Pandemic With Digital Transformation

Key Things Discussed

• Factors that contribute to the 70% failure rate among companies attempting to execute transformation, which can be attributed to:
  • Lack of audacious, bold goal-setting on the part of leaders.
  • Lack of clear-cut KPIs.
  • Lack of alignment among key stakeholders and leadership messaging.
  • Lack of transparency and buy-in across teams and missions.
• OKRs and communications that ensure smooth adoption of initiatives.
• Common challenges associated with M&A scenarios – and critical tactics to ensure a smooth and human-centered integration. 
• Why it’s okay to fail – and preferably to fail fast. Then learn from it!
• An insider’s look at the composition of boards, their roles and responsibilities as well as the need for more diversity.

Show Notes

• [00:01:20] About Karen’s migration  from focusing on business psychology to a strategic, inter-disciplinary global consulting role with KPMG and IBM.
• [00:03:08] How 12 years ago Karen made the decision to go out on her own, providing three things:
  • Consulting with companies navigating transformation, M&As and other strategic initiatives.
  • Serving on boards.
  • Angel investing.
• [00:05:08] Karen reflects on the whys behind a 70% failure rate among companies attempting to execute transformation:
  • A reluctance on the part of company cultures to act audaciously and boldly.
  • A lack of clear-cut KPIs.
  • Non-alignment among key stakeholders and in leadership messaging.
  • Not having “the recipe” for securing buy-in across the enterprise.
• [00:09:28] About digital transformation and what does it actually entails:
  • The first priority is creating a mindset shift within the business and organization.
  • Clearly define customer needs and the consumer landscape. “It always starts with where you think the market will go.”
  • Deploy the same technology – platforms and apps – both internally and externally.
• [00:14:06] Karen shares factors that set the stage for successful adoption of change:
  • Research and metrics to understand customer behavior.
  • Consider necessarily cultural changes.
  • Roll out pilot programs – but don’t stay in pilot mode too long. Prepare to scale.
  • Align customer-facing technologies with those used inside the enterprise.
  • Be prepared to fail. Do it fast – and learn!
  • Ensure that leadership is coming along on the journey.
• [00:20:44] About all things M&A and special challenges and tactics for managing them.
  • #1: Make sure the value case is clearly understood from the outset.
  • #2: Understand the multiple cultures at play on both sides of the acquisition.
  • #3: Create an integration management function to ensure the initiative has structure, stewardship and clear communications.
  • #4: Don’t neglect ripples within the customer base. Address concerns and offer transparency around changes.
  • #5: Maintain clear objectives and key results to measure financial outcomes, growth and cost synergies.
• [00:25:12] Karen shares her key top-line metrics on the scorecard for M&A success:
  • Growth in shareholder value.
  • The rate of talent retention and attraction.
  • Employee insight surveys. Positive or negative? Inspired or disaffected?
  • Customer retention and satisfaction data.
  • Track the valuation of cost savings synergies as well as growth synergies.
  • Implement Day 1 operational performance and resource management.
• [00:28:45] When, whether and how to deploy OKRs:
  • Be bold with intention from the outset to win hearts and minds.
  • Prioritize team engagement with the mission.
  • Establish key metrics to analyze customer, employee, financial, processes, technology.
  • Think first about what you should measure – then consider whether that objective is achievable.
• [00:33:12] Strategies for managing M&A leadership integration and reorganization:
  • Anxiety is par for the course and expected. Ditto ego!
  • Make fairness and transparency a central feature of any go-forward plan.
  • Make decisions swiftly to maintain stability.
  • Build relationships and understand people’s motivations upfront to smooth transition.
  • Prepare to be a coach and mentor through the emotional upheaval and insecurities.
• [00:37:22] Why measuring for success in transitioning merged workplaces has to do with retention, which is quantitative, but also must be assessed in qualitative experiences. Did people feel respected and supported whatever the outcome?
• [00:40:06] Karen shares perspective on serving with nine private equity-backed boards, both as chair and a non-exec.:
  • The role has evolved in recent years.
  • You are responsible for serving multiple constituencies, including shareholders, employees, governance, compliance and public perception/reputation.
  • Composition of boards depends on multiple factors, such as skills sets required.
  • OKRs have an important role to play in guiding the oversight provided by boards.
• [00:47:22] Quick Fire Questions for Karen:
  • What’s your Dream with a Deadline? Twofold: Her family’s health and happiness and, personally, to get her book written and “out there.”
  • Can you describe a strategy execution challenge you’ve faced and how you responded? Moving an energy company through transformation inside multiple cultures and with limited digital capability or capacity among employees.
  • What advice would you give to boards that aren't looking at OKRs right now? Why should they use them? “It's an old saying, but I always go to what gets measured gets done or what gets measured gets managed.” It’s critically important to establish a goal (doesn’t have to be comprehensive) and put some OKRs under it.
  • What’s top of mind for you these days? Tough times economically on the horizon and what that will mean for priorities such as diversity and green initiatives.

About Our Guest:

Karen is an Interim Executive Committee member, Consultant and NED with 25 years’ experience leading complex enterprise-wide transformations and M&A integrations to $105bn turnover. Her interim and consulting clients over the last eleven years have included Accenture, Microsoft, EY, Invesco, National Grid, RELX Group and PE funds where she has successfully led major programs of change. She has been on private equity backed boards to drive value creation and achieve a major fundraise or exit, working alongside major investors.  Karen has proven expertise in strategy and transformation of complex global businesses involving the creation of new and disruptive operating models to reduce cost, grow the top line, extract greater value from data and technology, create new dynamic cultures and deliver customer centric and digitally delivered customer experiences.

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