Canadian HR Reporter

MAY 19, 2014 CANADIAN HR REPORTER & STRATEGIC CAPABILITY NETWORK Starting a whole new chapter Starting a whole new chapter Strategy evolution helped Indigo navigate periods of rapid change Strategy evolution helped Indigo navigate periods of rapid change BY LIZ BERNIER STAYING TRUE to an organiza- tional mission can be a powerful driver of success — but in a rapidly changing business environment, that original mission has to be able to evolve to meet customers' changing needs. at was the central message Laura Dunne, senior vice-pres- ident of human resources and organizational development at Indigo, shared at the Strategic Capability Network's 35th anni- versary event in Toronto. Sticking to and building around the company's original mission enabled Indigo to become a pow- erhouse over the past decade, with more than 6,500 employees across Canada and enviable brand recognition. But with the advent of e-reading and online retailing, the organization's strategy had to evolve quickly to keep up. Living up to the mission Almost two decades ago, in 1996, the retail landscape for book re- tailers was dominated by Borders and Barnes & Noble in the United States, and Coles, Chapters and proprietor-run outlets in Canada, said Dunne. But, in 1997, Heather Reisman opened Indigo's fi rst lo- cation in Burlington, Ont. "She opened a store and opened a few more stores and, over 1998, '99 and 2000, Indigo stores began to pop up around Canada, and customers loved them," said Dunne. Indigo was built around one key mission: To be Canada's most in- spiring bookstore. "Indigo, a relative startup, was now neck-and-neck in brand rec- ognition and brand aff ection in Canada up against brands that had been around for half a century or nearly a century," she said. "All of a sudden, this brand new brand was right there in the hearts, minds and wallets of Ca- nadian consumers. It became a place where people wanted to be, it became a place where people got great decision support on the books that they wanted to read, and they got to connect with the people who were associated with those books." e challenge then was how best to leverage that success, said Dunne. "'Where do we go from here, what do we want to do?' And then there was the acquisition. Indigo was the minnow that swallowed the whale. Indigo had a huge le- verage buyout of Chapters (and) became the largest book retailer in Canada." ' e winds of change' at success was soon met with more complex challenges, as online retailing and e-reading be- gan to carve out a foothold. "And then there was this thing called Amazon," said Dunne, add- ing that the online book-selling behemoth created stiff competi- tion in Canada and the U.S. alike. e change that occurred in book retailing was seismic and practically instantaneous. "Overnight, the digitalization of reading changed the way that people experience reading… and, all of a sudden, what it meant to be the most inspiring book retailer changed truly almost overnight," said Dunne. "So there's Indigo, and we're the best at something that is starting to feel increasingly irrelevant. So the mission of being the most inspiring bookstore suddenly doesn't have the kind of trajec- tory that we thought it was going to have." As the industry reached a tip- ping point, it became very diffi cult for retailers to re-orient them- selves to the new economics of the business — and new customer expectations. In the U.S., Borders didn't antic- ipate it quickly enough, she said. It shuttered many of its stores al- most overnight. "And the most astonishing thing is, the next year, Barnes & Noble's revenue dropped. So imagine — you lose your biggest competitor, who had $3 billion worth of sales, their stores are gone, and your revenue drops. And so where did it go? A huge amount of it went to Amazon," she said. "It's very tough to compete." It's even tougher when the so- cial media boom begins to eat up a lot of time and resources. "Everybody had to fi nd a way to respond instantly to custom- ers and manage distemper and seize opportunities," she said. "It was consuming an inordinate amount of capacity within the organization." Evolving strategy Senior leadership at Indigo looked at all of these diff erent factors, added them up and asked them- selves, "Where do we go from here?" said Dunne. "We had a moment of epipha- ny where it really was: We have a purpose and not a mission. And our purpose is to enrich the lives of our customers. And we do that by igniting their passions and un- leashing their creativity. at's the experience that we want custom- ers to have when they connect with Indigo," she said. "We're not just enriching peo- ple's lives through a book experi- ence and through a bricks-and- mortar retail experience… Now, (it's) not just about connecting that book-lover with their next great read — it's about inviting people into our environments, and inviting them to experience something — whether that is something joyful in home decor, something thought-provoking in reading, something imagina- tive and creative to stimulate their kids, something wonderful and new to try in gourmet or en- tertaining. It is all about making them think of something that's possible for them, that maybe they hadn't thought about before." Indigo has to maintain this in retail and online, in addition to connecting with customers on multiple levels — social media, mobile apps and more. "But it's easier because we now have this as a guiding beacon. It's not just that 'We'll be the best, give us any measure, give us any target — we'll beat it.' It is, 'How can we be guided by what we're creating for our customers?'" said Dunne. "We experienced the need to reframe the strategic plan- ning from 'What is the output?' to 'What is the purpose?' And it has now put us in a place where we feel much more confi dent and much more agile, going into what we know will be a continuously changing environment." Credit: Shaun Best (Reuters) Credit: Oleksiy Mark/Shutterstock.com (Cover)

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