BREAKING "THE" BAD - new perspectives for the fashion industry

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BREAKING "THE" BAD - new perspectives for the fashion industry

Tuesday, 1. October 2019

by Stefan Rassau and Norbert Pühringer

 

The fashion industry lives in a paradox: it is one of the most creative sectors of society and yet is subject to the same efficiency constraints as all other highly mature branches of industry. Logic tells us that creativity costs time and money – but that assertion runs contrary to the required efficiency. Yet one way these supposed opposites can be successfully combined into a new business model can be copied from another industry that has already felt the pressure to radically change its organization and working methods. Here is the success story of Netflix & Co.
 

1. The creativity-efficiency dilemma

Before we look at this model, however, a brief inventory of the state of the fashion industry. Let’s let 97-year-old icon of New York style Iris Apfel have her say: “There’s no more creativity”, she complains, “everyone copies one another, everyone looks the same. Individuality seems to be a dirty word today. There are so many choices today, and yet everyone looks like they’re wearing uniforms”. Iris Apfel’s statement sums it up. Copying and bestseller management are simply so much faster, and speed-to-market so much more in demand today than ever before. But where customers always see and find the same thing, it’s the price that determines the purchase. The defect is built into the system of most companies: Creative minds and commercially minded businesspeople get in each other’s way. The familiar functional models are no longer sufficient to take team performance to a new level.

2. The success story of the US TV series industry

The US entertainment industry faced a similar dilemma: rising production costs were accompanied by stagnating viewer numbers. It was generally virtually unpredictable strokes of genius that led to extraordinarily successful productions, and it was difficult to predict in advance what a movie would gross in the end. The portfolio concept was expected to do the trick. A business model that stood on increasingly shaky feet due to the high production costs. But then came the series format – and changed the entire entertainment sector. The series is a far more agile form of blockbuster development, in which spectator behaviour can be taken into account and risk better controlled.

The enormous success of this entertainment format is also reflected in figures. In 2008, almost 200 series were launched every year, while today the figure is over 500. The largest platform, Netflix, now has over 150 million paying users in 190 countries with around 9 million new subscribers every quarter. Netflix is investing 14 billion US dollars this year in new content – and an ever-increasing proportion of it in its own series production.

These figures show the pressure under which series have to be mass-produced – as if on an assembly line – to satisfy the hunger of users who have morphed into speed watchers. The only question is: How can this be done at this speed, while at the same time producing truly creative content that inspires viewers and keeps them glued to their screens?

 

3. The writers’-room model

The answer is the writers’-room model that Vince Gilligan developed in 2008 as part of the Breaking Bad series. With this model, the blueprint was delivered to enable development of creative storytelling at the fastest possible pace. The basic principles are teamwork at eye level, clear roles and rules, highest transparency for all participants, fast communication and high reaction speed. These are principles that are also highly regarded in the fashion industry and yet often do not lead to the desired success in implementation. Let’s take a closer look at how the model used in series development works.

 

The showrunner and the team

The team is led by the so-called “showrunner” as the final decision-making authority. He or she is fully responsible for the content, sets the tone and style of the series, writes the “bible” that everyone follows, shapes the spirit of teamwork and is the link between all departments, the film team and the broadcaster.

The team works at eye level when developing the story. Everyone has the same voting rights in contributing to the creative development of the story. Accordingly, teams are assembled based on diversity – a good mix of different authors and experts involved is the best guarantee of stories that are as credible as possible.

In the fashion and retail world, this corresponds to an expanded role for brand and/or category managers. Their main task is to set the tone in the brand book and orchestrate the specialists in areas like products, procurement, sales, retail, e-commerce and marketing. They coordinate with all relevant internal and external stakeholders, are responsible for the overall result and ensure that the team has a clear picture of the target direction at all times. At the same time, brand and category managers must not be patriarchs who decide everything, but rather colleagues who integrate themselves into the team.

 

The writers’ room as the creative core

The writers’ room is a real space in which the team spends a lot of time and energy until the series is broadcast and beyond, and in which everything takes form visually. In a joint creative brainstorming, countless ideas are developed within a short period. The most exciting and attractive of them are selected and re-combined as required. This is a playful process in which the possibilities of the series can be explored at an early stage. Ideas can be found just as quickly as they are rejected. That costs little time, doesn’t consume too much heart and soul and yet produces good results. Only the most convincing stories are later developed by the team members.

 

The fashion and lifestyle industries are also increasingly setting up creative workspaces for more cooperation and faster communication. But they must make sure that these superficial measures are not the end of their efforts. In fact, the power of the writers’ room comes primarily from a new quality of teamwork. Coffee bars, creative spaces, whiteboards or game material can provide effective support for more productive and creative work. What is decisive, however, is whether team members have trust in each other, whether conflicts are constructively resolved, whether all team members are included and regularly reflect on their own performance and whether the overall result has clear priority over status and ego thinking.

 

The beat sheet sets the time signature

An important success factor of the writers’ room concept is clear rules that everyone can rely on. Some specifications are surprisingly narrow and have their origin in predefined advertising windows. A 60-minute episode contains three ad breaks, resulting in four acts. Each act contains about five to eight scenes (termed beats), each lasting only 1.5 to 2 minutes. The structure of the story is developed at the beat level. At the end of each act there is a cliff-hanger to ensure that the viewer is still present after the commercial break. It is precisely these narrow guidelines that give the team the focus to concentrate fully on the creative content of the story. Only when the beats are released are the dialogues worked out in detail. The writing takes place in a very short time, because now the direction is already exactly defined. To get an impression of the efficiency of the model: the writers’ room is usually set up nine months before the broadcast. During this period, a series of 23 episodes is shot and parts of it are already aired. While the first episodes are running, the audience reaction is evaluated and the findings channelled back into the writers’ room. This is how characters are further developed or quickly given up.

 

There are also useful instruments in the fashion industry such as brand books, collection master plans, marketing calendars and sales management guidelines. These are mostly used by specialists, are often rigid and are only used selectively. They are not clear rules that can be relied upon. Superiors are also happy to interpret them individually or, if necessary, throw them overboard. It would be more effective if a cross-functional lead team working within a creative workspace could jointly take full responsibility with the help of a storyboard. First with the focus on the seasonal story, then with the focus on the development of the right products, styles and colours, later with the focus on implementation at POS. The lead team would have the chance to develop a convincing story and adapt the underlying content to the customer’s reactions during the season. The team members could rely on each other and share an awareness of the effects of their decisions, creating the necessary transparency and acceptance within the team.

 

4. Call to action

Digitalisation is accelerating social change on an unprecedented scale. Business organisations must react to this if they want to remain relevant to their customers. What Netflix viewers already get today is what fashion customers also want: in addition to great products, they want new and interesting stories all the time, an exchange with like-minded people and simple 24/7 access it all. To meet these requirements, a “keep it up” approach with classic structures will no longer work. The good news is that young people in particular are demanding a rethink of how work is organised today. They want to have the feeling that they are doing something meaningful and that they are able to apply their abilities as autonomously as possible. What they no longer want are conventional hierarchies that are primarily geared toward stability. The existing model has proven itself over many, many years. But those days are over, as the entertainment industry had to learn a decade ago and as the fashion industry is now increasingly experiencing.

 

The bad news: This change confronts management with the need to radically redefine its own profession. Power is organised differently, authority is distributed, cooperation is favoured over individual heroism, transparency fosters trust and cooperation at eye level. Just like in the writers’ room, this creates a creative and efficient organisation, which is able to effectively adapt to ongoing market changes. These companies do not follow customer expectations, but set new standards and convince customers to follow them voluntarily.

 

Principles of decentralized organizations

The analogy presented here is essentially an example of how an industry rethought its work environment very early on and radically changed it. The omnipotent studio bosses were replaced by decentralised working principles to counter the pressure of increasingly unpredictable environmental changes. It was only with the introduction of autonomous showrunners and author teams that series could be created in the level of quality and customer orientation that made the Netflix & Co. business model so successful. As a result, the series industry was able to convert flexibility and adaptability into a competitive advantage at an early stage.

 

In practice, decentralized organizations have four principles that are applied at all levels.*

 

1. Purpose orientation

The “bible” is the “reason why” of the series. In the corporate world, the purpose creates the necessary motivation for people and gives direction to the whole organisation. The purpose is more than just a strategy. It gives employees a sense of commitment to the company’s cause, of making it their own.

2. Distributed authority

Self-organised teams work autonomously, and decisions are made where the action is. Supervisors create the framework and concentrate on decisions with broader impact. In the writers’ room, in software development and increasingly in other industries, agile approaches such as scrum have already replaced classic project management methods.

 

3. Transparency instead of control

The transfer of decision-making power naturally also raises the question of control. If several teams work together and make decisions on their own authority, transparency is essential, as it is the only way to create a common reality. Mature organisations make relevant information available to all employees.

 

4. Evolutionary learning

The decentralised model also abandons the illusion of plannability. In a complex world, customer needs are less and less predictable. Instead of planning, the organisation’s ability to react quickly to changes takes precedence. Constant learning and adaptation increase the ability to survive. Knowledge of customer behaviour is immediately used to create even better offerings for customers.

 

*Based on an article that appeared in the German newspaper Frankfurter Allgemeine Zeitung on July 16, 2018: Self-organisation needs clear rules (Babette J. Brinkmann, Prof. for Organisational and Group Psychology at the Technical University Cologne and Matthias Lang, Co-Founder of dwarfs & giants, Organisational Consulting)

 

Norbert Pühringer

is a partner and corporate developer at Team Retail Excellence. He supports retailers in placing the customer at the centre of their actions. He is convinced that this can only succeed if managers and employees find the right attitude and enjoy shaping positive change.

 

Stefan Rassau

is a partner and corporate developer at Team Retail Excellence as well as an experienced entrepreneur and sales manager. His passion is to modernise companies’ business models in terms of both substance and organisational structure. He develops modernisation projects in the force field between stationary and digital spheres, always with an eye to an inspiring, authentic customer experience at POS.

 

 

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Unternehmensstrategie