Upload
ngothuy
View
220
Download
4
Embed Size (px)
Citation preview
The Cosmopolitan Hotel Las Vegas April 19, 2017
Toys“R”Us Turnaround: Culture & Customer
Experience
Dave BrandonChairman & CEO
Toys“R”Us
What Do These Five Organizations Have in Common?
Changemanagement!(Myexperiencehasbeen…changeisconstant)
Toys“R”Us
How Do I Approach Change Management?
• Understand and Embrace the Fact that … Change Creates Stress – and Stress can be Good!
• Create a “Change Culture” in the Organization
• Make Change a Positive (“Sudden Change Drill”)
• Manage Change vs. Allowing Change to Manage Me!
Toys“R”Us
Organizational Behavior / Performance
“The Stress Curve”
Per
form
ance
Desirability
Anxiety - Stress - Tension
0 0
100 100
Lo Mid Hi
Toys“R”Us
ChangeCase for Change Vision Skills Incentives Resources Action Plan
Status QuoVision Skills Incentives Resources Action Plan
ConfusionCase for Change Skills Incentives Resources Action Plan
AnxietyCase for Change Vision Incentives Resources Action Plan
Gradual ChangeCase for Change Vision Skills Resources Action Plan
FrustrationCase for Change Vision Skills Incentives Action Plan
False StartsCase for Change Vision Skills Incentives Resources
Managing Complex Change
Toys“R”Us
U.S. Stores 2005
U.S. Stores 2016 + / -
3,702 5,229 1,527
1,397 1,806 409
--- --- ---
8 113 105
901 879 (22)
230 223 (4)
Case for Change
Toys“R”Us
U.S. Stores 2005
U.S. Stores 2016 + / - Revenues
2005
3,702 5,229 1,527 $288 Billion
1,397 1,806 409 $53 Billion
--- --- --- $2 Billion
8 113 105 $6 Billion
901 879 (22) $11.3 Billion
230 223 (4) $2.1 Billion
Case for Change
Toys“R”Us
U.S. Stores 2005
U.S. Stores 2016 + / - Revenues
2005Revenues
2016 + / -
3,702 5,229 1,527 $288 Billion $486 Billion 70%
1,397 1,806 409 $53 Billion $74 Billion 40%
--- --- --- $2 Billion $136 Billion 6,800%
8 113 105 $6 Billion $12 Billion 100%
901 879 (22) $11.3 Billion $11.5 Billion 2%
230 223 (4) $2.1 Billion $1.3 Billion (38%)
We Have…More Competition
Bigger Competition
Better Competition
Case for Change
Toys“R”Us
Adaptability Pattern..Trends..Market
Translating the demands of the business environment into action
“Are we listening to the marketplace?”
MissionDirection..Purpose..Blueprint
Defining a meaningful long-term direction for the Company
“Do we know where we are going?”
InvolvementCommitment ... Ownership … Responsibility Building human capability, ownership, and responsibility “Are our people aligned and engaged?“
ConsistencySystems… Structures… Processes
Defining the values and systems that are the basis of a strong culture
“Does our system create leverage?”
Organizational Culture Survey…
Toys“R”Us
Organizational Culture Survey# Of Responses
1332NUMBERS DENOTE PERCENTILES | 10/30/2015 | 2013 Normative Dataset
©Daniel R. Denison, Ph.D. All rights reserved
Toys“R”Us
©Daniel R. Denison, Ph.D. All rights reservedNUMBERS DENOTE PERCENTILES | 10/30/2015 | N=1332 | 2013 Normative Dataset
IN ALL CASES, A HIGHER SCORE INDICATES A MORE FAVORABLE CONDITION.*For this negatively worded item, the raw score has been reversed.
The way things are done is very flexible and easy to change.
We respond well to competitors and other changes in the business environment.
New and improved ways to do work are continually adopted.
Attempts to create change usually meet with resistance.*
Different parts of the organization often cooperate to create change.
Customer comments and recommendations often lead to changes.
Customer input directly influences our decisions.
All members have a deep understanding of customer wants and needs.
The interests of the customer often get ignored in our decisions.*
We encourage direct contact with customers by our people.
We view failure as an opportunity for learning and improvement.
Innovation and risk taking are encouraged and rewarded.
Lots of things "fall between the cracks".*
Learning is an important objective in our day-to-day work.
We make certain that the "right hand knows what the left hand is doing".
PERCENTILE0 25th 50th 75th 100th
Creating Change7
6
5
22
27
Customer Focus15
14
16
6
10
Organizational Learning17
18
21
7
25
1st 2nd 3rd 4thQUARTILE
Toys“R”Us
2014 Temkin Customer Service Ratings 2014
Rating Company Industry
Temkin Customer
Service Ratings (TCSR)
Company TCSR vs Industry
TCSR
146 Toshiba Major Appliances 51% 0
159 Toshiba Computers 49% -1
70 Toyota Auto Dealers 59% 2
105 Toys 'R' Us Retailers 55% -4
173 TracFone Wireless Carriers 47% 4
10 Trader Joe's Grocery Chains 69% 4
159 Travelers Insurance Carriers 49% -10
87 TriCare Health Plans 57% 13
30 True Value Retailers 65% 6
35 U.S. Bank Banks 64% 6
Toys“R”Us
Strategic Pillars Make Talent and Culture a Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Create a World Class Experience for Our Customers - Innovate & Lead
Create a Strong Financial Foundation
Long-Range Goals
• Earn recognition as a Great Place to Work • Achieve top-quartile scores in every category of the Denison
Culture Survey • Embrace diversity and inclusion • Create a culture of high performance – empower team
members to be accountable • Provide ongoing career development opportunities and ensure
succession for all team members • Recognize and celebrate team member achievements
• Be recognized for global corporate citizenry • Establish and lead best-in-class global sourcing and safety
practices • Create high brand(s) engagement by becoming best-in-class in
CRM and digital marketing • Be loyal to our best customers • Make our vendor relationships a competitive advantage • Grow global Private Brands • Build the BRU brand in Europe & Asia • Remodel and re-image all TRU and BRU stores
• Be a leading specialty retailer delivering seamless multi-channel capabilities with strong in-stock conditions at every point of sale
• Establish a seamless brand transition for the customer from BRU to TRU, becoming a vital, trusted authority for families
• Operate brick and mortar stores that are attractive, technologically competitive, and flawlessly execute in every way
• Operate a webstore that provides a superior customer shopping experience
• Achieve >$1 Billion in EBITDA • Consistently grow profitable SSS in BRU & TRU and grow
our share of market every year • Stay “Fit for Growth” while we create a greater focus on
GROWTH • Work towards a simpler, more efficient capital structure • Create positive trends in sales growth, market share growth,
and EBITDA growth that will make TRU an attractive IPO candidate
Strategic Pillars Initiatives
• Conduct Denison Culture/360 degree Surveys • All leaders conduct regular store visits • Over-communicate results with team members • Create an effective succession planning process • Schedule & launch global best practices summits • Develop several initiatives to recognize and celebrate team
member accomplishments • Create a safe working environment for all employees
• Eliminate brand offensive stores • Execute a focused social media strategy/CRM • Improve global vendor relationships • Create a focused Private Brand and sourcing strategy for growth • Develop a rigorous process to qualify, approve and monitor vendors
for quality and compliance
• Increase our SFS and fulfillment capacity • Upgrade, train and empower SMs and DMs to “own” the
operations of their stores • Create user-friendly, efficient, and affordable customer care
processes • Develop the means for customers to order products whenever,
wherever and however they want to shop • Establish a selling & service culture in our stores
• Continue to lower operating expenses as a % of sales without impacting the customer experience
• Evaluate the size, mix and effectiveness of our annual promotional spend every year
• Create global “Centers of Excellence” around key support functions
• Create solutions to our capital structure issues
2017 Strategic Pillars
SMAC Objectives
• Conduct a GRC Denison Culture Survey by 10/31 and improve in all areas versus 2015 results
• Conduct a minimum of 2 LT hosted Brown Bag lunches per month at the GRC beginning 4/1
• LT members collectively increase the number of store visits versus 2016 levels
• Execute a minimum of five (5) GRC Huddles • Recognize either a Champion Pay/ABCD Award/Hall of Fame
recipient at every Huddle
• Achieve Private Brand growth of 3% or greater globally (2% or greater US)
• Execute top-to-top meetings and joint business planning with the top (in total) 15 toy, baby and licensing partners leading to their overall sales and share growth
• Complete the installation of ICIX by 7/30 and have GSO and non-GSO private label vendors utilizing the system by 9/30
• Fix 95% + of the 858 P1 issues that impact 338 stores by 10/1
• Install traffic counters in our brick and mortar stores by 7/1 • Achieve average brick and mortar store NPS score of 73 and
70 or greater on dotcom fulfillment • Create a pipeline of fully trained SMs and DMs to provide us
with trained and ready leaders - 103% coverage of both positions by 10/1
• Reduce the number of escalations to our Customer Care Center and the amount of appeasements versus 2016 levels
• Achieve $--- million or greater in EBITDA • Increase the CEO contingency by a minimum of $10 million
as a result of targeted zero-based budgeting initiatives and partnering with store operations to identify productivity opportunities through store-to-store benchmarking
• Improve financial health by achieving targeted quarterly metrics in gross inventory and net accounts payable
2017 Critical Missions
Serve Our Customers with What They Want – When and How They Want It
Provide a World-Class Digital Experience Bring Our Toy Stores to Life Transform the Babies “R” Us Brand
2017 Critical Missions
Initiatives
• Implement a new planning and allocation system that lowers inventories and improves in-stocks
• Improve our promotional planning and communication processes to ensure that our DCs have required product to support featured items
• Reduce the operational costs associated with our supply chain activities
• Successfully launch our new webstore with improved functionality and customer experience
• Launch a new loyalty program that will grow our number of loyal customers and encourage repeat visits to our stores
• Significantly improve the EBITDA production of our webstore • Make CRM a sales and traffic driver for BRU and TRU
• Execute a significant item reduction in brick and mortar stores • Expand our American Girl shop-in-shops by a minimum of 25
stores • Activate our stores with events and activities that will provide a
“toy fair” experience
• Execute a significant item reduction in brick and mortar stores
• Launch a new BRU Registry that is competitive with other baby registries in function and design
• Successfully roll-out a unique and user-friendly car seat customer experience by 6/1 and a similar stroller customer experience by 10/1
2017 Critical Missions SMAC
Objectives
• Each functional unit impacting in-stock levels in our stores will set a SMAC objective related to their role and will successfully achieve it to create an improvement in every one of our in-stock measures
• Achieve a 90% in-stock level in all DCs on all featured items • Deliver a minimum of 3 customer pain point solutions for our
omnichannel experience
• Successfully launch our new webstore with improved functionality and customer experience as measured by an improvement in traffic and conversion metrics by 7/1
• Achieve a dotcom store contribution rate of 17.7% or better • Successfully launch our new loyalty program by 10/1 • Implement a targeted experience for 3 large customer segments:
build sustainable process (EOQ2), and key data in-house (EOQ3), and make CRM technology decisions (EOY)
• Grow total transactions versus 2016 • Item reduction of 10% or greater • Maintain or grow our 2016 Market Share position in the Toy
category • Plan and execute a minimum of 5 national traffic driving out-
of-season activation events • Create 4 new shop in shop experiences in a minimum of 300
stores
• Grow total transactions versus 2016 • Successfully launch a BRU registry mobile app native 1.0 by
7/1 and launch an upgraded mobile app native 2.0 by 10/1 • Achieve growth in Registry sales by 5% versus 2016 levels • Item reduction of 10% or greater • Achieve market share of 22.8% or higher in 2017 as reported
by NPD
Toys“R”Us
Strategic Pillars
Make Talent and Culture a
Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Toys“R”Us
Strategic Pillars
Make Talent and Culture a
Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Create a World Class Experience
for Our Customers - Innovate & Lead
Toys“R”Us
Strategic Pillars
Make Talent and Culture a
Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Create a World Class Experience
for Our Customers - Innovate & Lead
Create a Strong Financial Foundation
Toys“R”Us
Strategic Pillars
Make Talent and Culture a
Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Create a World Class Experience
for Our Customers - Innovate & Lead
Create a Strong Financial Foundation
Long-Range Goals
Toys“R”Us
Strategic Pillars
Make Talent and Culture a
Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Create a World Class Experience
for Our Customers - Innovate & Lead
Create a Strong Financial Foundation
Long-Range Goals
Strategic Pillars
Initiatives
Toys“R”Us
Strategic Pillars
Make Talent and Culture a
Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Create a World Class Experience
for Our Customers - Innovate & Lead
Create a Strong Financial Foundation
Long-Range Goals
Strategic Pillars
Initiatives
2017 Strategic
Pillars SMAC
Objectives
Toys“R”Us
Strategic Pillars
Make Talent and Culture a
Competitive Advantage
Grow and Build the TRU and BRU Brands Throughout the World
Create a World Class Experience
for Our Customers - Innovate & Lead
Create a Strong Financial Foundation
Long-Range Goals
Strategic Pillars
Initiatives
2017 Strategic
Pillars SMAC
Objectives
Toys“R”Us
Overall Assessment Since Program Launch
✓ Aggressive timelines were achieved and implementation was very smooth
✓ Significant improvements in the customer experience over past 6 months
✓ Overall Net Promoter Score went from 66 to 68
✓ Current performance is 68 – Average
✓ FY17 Goal is 73 – Above Average
Toys“R”Us, Inc.
✓ Our teams give positive feedback that the platform is intuitive, immediate and impactful
✓ The Mobile app is a clear winner for our Marketplace Leaders!
• Store Managers have been able to contact customers to solve bad experiences and build on positive ones
• Provides quick feedback on customer behaviors