A new survey of 135 CEOs and presidents within the retail industry revealed that 74% of the respondents say they will search for leadership positions from outside the industry in the next 5 years primarily because they "want leaders with a new perspective." The survey also found that 73% of the respondents revealed they do not have a formal CEO succession plan in place.
The top three greatest challenges facing the retail industry in developing future leaders, according to the respondents, are "understanding new ways to connect with and market to consumers (62%)" followed by developing cross-functional capabilities (58%) and "keeping on top of a quickly changing competitive landscape" (57%). Ranked lower in importance was "adapting to the ever increasing speed at which business decision are made (39%), recruiting (33%) and retention (30%). The survey asked respondents to choose all that apply.
Of the 74% who say they will search for leadership positions outside of the industry, the biggest reason, say 69%, is they want leaders with a new perspective and 52% say they want leaders who are better prepared for new ways business is conducted. Only 43% of the respondents believe the talent pool in retail is limited.
Biggest Challenges
The biggest challenge facing the retail industry in developing future leaders was identified as understanding new ways to connect with and market to consumers by 62% of the respondents. The leaders identified other important challenges as "developing cross-functional capabilities" for talent, and keeping on top of a quickly changing competitive landscape. Ranking lower in terms of priorities were training (45%), recruiting and retention (33 and 31%, respectively), and compensation which received only 17% of the vote.
The Right Stuff
The leadership skills the respondents say most contributed to their own success were strategic as opposed to managerial or tactical skills and experience: Having a "strong vision for the company" garnered 80% of the vote, followed by "understanding the consumer" (79%), and "fostering talent and team building" (72%). Tactical skills and experience ranked toward the bottom of the list of important attributes for rising to the top.
Marketing was the primary area of expertise (51%) which the CEOs and presidents had prior to becoming a top executive, followed by sales (44%) and merchandising (42%). A third of the respondents' backgrounds were in product design and developments while only 26% came from operations and 23% from finance.
When asked if they would choose retail if they could start their careers over, almost three-quarters (73%) said yes.
Retail Leaders Plan for the Future
The respondents say the single highest priority for their company's growth or success over the next five years is "talent acquisition and development," which garnered 16% of their vote followed by e-commerce which was tied with product development(at 14%) and international growth and branding (tied at 13%). Marketing in a new media landscape ranked lower (10%), as did mergers & acquisitions (8%), new retail store locations (7%), and licensing (1%).
Asked to identify one discipline that would be the most effective pipeline for the next generation of leaders in retail, the leaders chose merchandising (26%), followed by marketing (21%) and product design/development (13%). Less popular were digital/technology which tied with international business (11%), operations (6%) sales (6%) and finance (2%).
To maintain top talent in the next 5 years, the respondents say the most effective retention tools they will use are career development/advancement programs (66%) followed by bonuses (65%). A total of 47% say salary increases while only 39% chose stock options and restricted stock (26%).
Attracting the Best and Brightest
A whopping 90% of the CEOs and presidents say the retail industry is not attracting the best and brightest from college campuses. The main reason they believe they are not attracting the best entry-level talent is that "sexy careers are elsewhere (financial, media, digital)," according to 57%, followed by compensation (55%), and poor communication about the industry at the college level (44%). Long hours in retail ranked lower (43%) as did lack of formal training programs (38%).
The online survey was conducted by Women’s Wear Daily and executive recruiter Herbert Mines Associates. There were 135 respondents, who hold the title of CEO, President, Partner/Owner or Board Member. The profile of the respondents is: 62% male, a median age of 52 with an average tenure of 10 years at their current company.
Source: PR Newswire, November 1, 2010
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