NSL Blog

Mothercare needs to acquire the new literacy of business

November 28, 2011

In November 2011 retailer Mothercare reported devastating financial losses dipping some £80m into the red.

There is no doubt we are in hard economic times – but there is more to this story. As Executive chairman Alan Parker, made the point that the company had lost its way.

The question is how long has this drift into irrelevancy been going on? And why did the company get lost? Apparently it made a decent recovery up unto 2009, and then things went badly wrong.

Perhaps the key strategic mistake is perceiving whether the business is in retail, or whether its a service platform for mums, and what that means. This key question comes down to the nub of it all – relevancy. As Seymour Pierce analyst Kate Calvert said: “We believe that Mothercare has lost its modern-day relevance for mums.”

Failure of a world view: John Berger wrote, ‘what you see is shaped by what you know’, and the language by which we describe the world around us either limits or empowers us in how we act in that world. Our non-linear world changes the rules by which we have previously organised our businesses. Mothercare has failed to assimilate a changing world, understand how it describes it and therefore acts in it.

Take LEGO, who faced becoming culturally irrelevant with the rise of games, gaming, and multiplayer games. They faced the very real prospect of being thrown onto the commercial slag heap of history. LEGO acquired a new language based around co-creation, and participatory leadership, allowing it to evolve new R&D, production, marketing and commercial processes and a runway to a sustainable future. That language evolved into a new world view: Markets are participatory, cultural, and redistributive.

In 2006 I wrote:

commercial success in this wired up world will belong to those businesses that attract, engage and organise communities to meet multiple social and commercial needs. By creating strong communities online and off, businesses will be able to build customer loyalty to a degree that today’s companies can only dream of.

Think of HMV and Mothercare. Would they struggle as much had they developed a community strategy which was embedded into all that they did? Could they have beaten the big supermarkets and internet players by revising their bricks and mortar strategy?

5 things Mothercare could do to help them connect to their best possible future

1. Acquire the new language and literacy for how to do business in a non-linear world
2. To develop new skills and disciplines
3. Prototype new best possible futures
4. Become a platform and a service (not a series or retail stores)
5. Constantly iterate as a platform would

More information on breakthrough innovation