Angela Ahrendts, CEO of Burberry, recently spoke at the World Retail Congress held in Berlin in late September about how her company has managed to sustain sales and profit momentum throughout this wicked global recession. Burberry revenue climbed 21% in the first half of their fiscal 2011 (ended September 30), profits rose 49% and comp store sales increased by 9% in that time frame – pretty solid performance given the economic environment.

While she outlined several “Hard Strategies” such as cutting costs from the back end of the company, creating more accessible products in a wider array of price points and introducing new categories and locations for the brand globally, this veteran retail and fashion maven was convinced that most of the success can be attributed to what she called Burberry’s “Soft Strategies”.

This is a very interesting concept to think about separating the two types of approaches and emphasizing each of them (the point being both are necessary for long term and meaningful success). Ms. Ahrendts even admits that all companies have these types of strategies but to varying degrees of emphasis. I want to share some highlights from her presentation as they are very instructive:

1) Burberry set out to define themselves with a vision statement that was communicated to every employee in the company along with a plan to maximize their business

2) Their three “Soft Strategies” of “Style”, “Structure” and “Values” create alignment across the company and help empower innovation globally. According to Ms. Ahrendts, these soft strategies are “the glue that connects a young and old company and adds intuitive, visual and emotional depth to our toolkit”

3) The common threads that resonate for me when I hear Ms. Ahrendts speak is that communication and engagement are vital to maximizing a brand or organization’s potential. If there is no commitment to these two values, there is no alignment. When there is no alignment, there is less of a connection to the brand or the ‘centre’ as I would call it. According to Ms. Ahrendts “The more connected we are, the stronger the energy…The stronger the energy, the more we can achieve…” This only happens with constant and meaningful communication at all levels and a total commitment to employee engagement 12 months a year

In a previous post (Optimal Retail in Traffic Challenged Times – Part 2), we mentioned some keys we believe in especially in these trying economic times: communication, recognition and sustaining and emphasizing employee training and development. It is great to hear Ms. Ahrendts speak to each of these as underpinnings of her “Soft Strategies”.

Every organization should not underestimate the power of the “Soft Strategies” that can play a large part in achieving the goals of the organization and the dreams of the employees. After all, they are inexorably linked.

TheRetailTherapist 🙂