2022: Focus and Modularity as the Antidote for Volatility

Ryan den Rooijen
Ryan den Rooijen

Nearly two years into the COVID-19 pandemic, we were supposed to have things figured out. How to roll out vaccines, how to return to the office, how to adapt our business models. Yet from new virus variants and inconsistent policy responses to looming market volatility, it does seem like those initial self-congratulatory predictions were rather premature. Looking ahead to 2022, the only thing that is certain is that there are few certainties.

2020 was a annus horribilis for most industries, with the exception of tech. By contrast, 2021 was a year of significant growth in many markets. Driven by pent-up consumer demand, revenge spending, and household savings, retailers in particular saw record sales. What 2020 and 2021 had in common is that they both required “all hands on deck” engagement. The pendulum swung from averting bankruptcy to capturing growth opportunities.

In some situations, prioritising resources is a bit of a non sequitur. Photo by sippakorn yamkasikorn

For executives, the last two years required broad engagement across the organisation, and attempts to provide support to as many as possible. This was a natural response in an age of servant leadership and digital transformation. Of course, this scale does not preclude a modicum of structure, with task forces and programmes meant to manage efforts as effectively as possible. Yet governance cannot offset limited resources.

There are three key issues with resources having been spread so thin. Firstly, at scale it can be hard to deliver the degree of quality and resulting resilience that is desired. Secondly, large programs make it more difficult to pivot quickly, particularly when proceeding at pace. Finally, while a degree of pressure can serve as a motivator, over time it can wear people out, leading to decreased happiness and productivity; people start to burn out.

Now, given the lack of certainty about the year ahead, it seems prudent to change tack. Like many retailers, 2021 was an excellent year for us with strong performance across our channels. But with factors such as rising acquisition costs, supply chain challenges, increasing market volatility, and wavering consumer sentiment, we need to increase our resilience. The two pillars of this are strategic focus and modular capabilities.

The idea of strategic focus goes beyond identifying brands, markets, or channels where we anticipate the greatest growth or profitability. It also involves placing selective bets on capabilities we believe to represent potential force multipliers across our business. The trade-off here is that in focusing on the particular “big rocks” we have to sacrifice a multitude of smaller scale initiatives, often with their own clear merits if pursued.

These modular high-tech toys allow easy to use and reuse. Photo by Susan Holt Simpson.

Modularity is a less obvious goal but none the less important for it. Anticipating economic headwinds, some choose to shy away from investments and espouse the benefits of freezing recruitment. Yet given the obvious disruption in our industry we cannot afford to wait. Therefore we will continue to recruit and build, but in a modular fashion that allows us to pivot to meet evolving demand and drive value no matter the landscape.

There is a constant pressure one feels in a commercial role to ensure both growth and profitability. Often the temptation is to engage in many different ventures to try and either capitalise on opportunities or to preempt potential losses. Yet with the year ahead full of uncertainty, it is important that organisations adopt a pragmatic stance. Investing for the future, while hedging for challenges we know lurk just over the horizon.

– Ryan

Ryan den Rooijen

Now Chief Ecommerce Officer; formerly Chief Data Officer.