Faced with seismic changes in the retail world, companies want leaders who can navigate through a complex, evolving market environment and create a vision for a company that captures the fast-moving customer. We talked with Hal Reiter, Chairman and CEO of Herbert Mines Associates, the go-to guy for C-suite executive searches in the retail, apparel and other consumer-facing industries.
As the retail world evolves, is the merchant prince still king?
What’s interesting about the present and future of retailing is that merchandising has remained the driving force with a storied past. The model CEO understands that what is paramount is drawing customers into the store, then getting them to open their wallets.
Would you ever envision the next merchant prince coming from an online retailer?
The young online entrepreneur may be the new merchant prince of now. But you won’t find the 30 or 35-year old founder leaving his or her business and going to work for a traditional retailer. Online retailing is a virtual experience, very different from the brick-and-mortar world. Someone running an online business, for instance, has no idea where the cash goes out of the cash register at the Tyson’s Mall at the end of the day. There are lots of reasons that the old saw is true: retail is detail.
Some successful retailers believe that the best way to lead is by intuition. Is gut instinct enough?
The CEO is a manager of managers. He uses intuition in everything he does—selecting people, merchandise, bankers, communicating with Wall Street bankers and stockholders. But gut instinct is not any more important than managing your inventory or managing your balance sheet. You have to have good right and left brain instincts. As for other qualities, a leader has to be a good listener and communicator, have personal presence and charisma. A leader should also be able to generate a positive feeling about a company in the outside community. Plus he or she has to have a strong financial sense, particularly in today’s climate.
Is it tougher today to find new retail leaders?
Right now, the industry faces a huge war on talent. But the demand for skilled leaders has always existed. If you go back and read the writings of Confucius, you’ll find that he talked about the “dearth of talent.” The number of people capable of running large, complex organizations are few.
Has the blurring of the traditional retail-vendor relationship affected your recruiting process?
We’ve seen manufacturers become retailers and retailers become wholesalers. The collapse of the boundaries of the selling channels means we’ve had to make some transitions. In the past, we would find a product development head for a wholesaler and now we’re finding the product development head for a retailer. Before we’d find a head of store operations for a retailer, now it’s for the wholesaler. For instance, Burberry now has a head of stores. Macy’s has a head of product development to create products that look like Burberry’s. Same church, different pew.
Is an MBA degree a plus during these challenging times?
At the end of the day, an MBA isn’t important to run a business. You can hire plenty of people with business credentials to work for you. Merchants are not trained, they are born. You won’t find a lot of introverted engineers running retail companies. Instead you find people who are charming and good with people, who have an instinct and passion about product and who think the retail business is fun. Their passion for apparel, for instance, is deep and broad, and it extends from fabrics and buttons to thread to simply watching people as they shop. Your merchant CEO has an appreciation for the product and it doesn’t matter if someone is selling tires or hubcaps or Hermès ties.
How savvy does a CEO have to be about social media and e-commerce?
CEOs certainly need to be aware of the importance of the Internet and the contribution it can make to the top line. It provides them with opportunities to share company views and financial information and interact with employees. But social media is still in its infancy. One recent study showed that 64% of CEOs from the world’s largest companies are still not using social media channels. With the sea change in retail, do you have any advice about how future leaders should be trained? Future leaders need to grab as much knowledge as they can on the way up. It’s up to them to take responsibility for their own growth and development. The more they learn early on about various disciplines—planning, inventory, merchandising—the better off they will be in their ascension to the C-suite.
Harold D. Reiter is the Chairman and CEO of Herbert Mines Associates, the leading executive search firm specializing in C-Suite, senior level and corporate board placement for fashion, retail, e-commerce, food, chain restaurant and consumer product companies. Hal and his colleagues at the firm have secured top-tier executives for an impressive roster of blue chip clients including Barneys New York, Wal-Mart, Avon, Macy’s, Starbucks, Rue-La-La, Chico’s and Pier 1.