Jun. 12, 2013
C-suite leader must be
focused on the consumer
I recently spoke with Les Berglass, one of the deans of the executive recruiting business who is also a great trend spotter in retailing. Numerous private equity investors consult with him before they invest in this sector. We were talking about retailing and he was lamenting the struggles going on in the c-suites, and among corporate boards, about choosing leaders who can navigate in an era when traditional shopping patterns have been turned on their heads. Blame the Millennial wave, that often eschews traditional brick and mortar for click and mortar and “small screen” shopping. Our conversation reminded me of one of the most important rules many smart value investors like Warren Buffett live by: They seek companies with outstanding management.
Knowing and understanding the talent at the top can be more telling than the spreadsheet figures in a financial statement. Steve Forbes calls it understanding the “head knocker,” which has long been a trademark of company stories in Forbes Magazine. The guest post below, by Berglass, argues that big retailers need to stop bringing back successful management from yesteryear, as has recently been done with little success at retailers like JC Penney (JCP -2.82%) and Aeropostale. You can’t always teach an old dog new tricks. Retailing is in turmoil and radical –Millennial-minded–changes are needed at the top.