[Covid] has returned us to our roots as a grocer… Being able to unify behind a single purpose exponentially accelerated what we could deliver. Suddenly there was no such thing as a silo.
Perhaps no industry, save for healthcare, felt the pressure of delivering a successful Covid pivot more than the retail grocery sector. Once considered an everyday, and largely underappreciated, consumer staple, the sector was quickly recognised as an ‘essential service’ by government – its online ordering and delivery services became critical lifelines for lockdown-bound people.
We speak with the decorated digital leader Steve James, Head of Technology for Countdown (the NZ arm of the retail grocery giant Woolworths Group), on the challenges and opportunities presented through the Covid pivot, why lifecycle management offers far more than just a ‘necessary inconvenience’ for tech teams, and lessons from the world of retail in building trusting, confident and mutually empowered relationships between governments and constituents.
FST Government: The last 18 months has no doubt challenged many organisations on the digital front: from the logistic hurdles of intermittent Covid lockdowns to growing ransomware and DDoS threats on the cyber front, alongside persistent critical skills shortages and legacy overhang.
Could you take us through some of the major pressure points for Countdown’s tech team and infrastructure over this period?
James: Suffice it to say, our team is exhausted. During the first lockdown, we were the heroes of the company; we finally got to show that everything we’d been prepping for and investing in was paying off. It was a massive adrenaline high, but we never really took our foot off the pedal.
The other big thing that’s changed in the last 12 months, as you mentioned, is the increase in cyber-attacks. Recently New Zealand’s, both government and private sector, organisations have faced a lot of DDoS attacks, which has taken out their services for up to several days.
The NZ Government has defined us as an essential service; we wouldn’t necessarily have considered ourselves that before.
This has really upped the ante in terms of how resilient we need to be and how we manage enterprise and cyber risk. We’re lucky enough to have a very strong and mature cyber and risk practice within the Woolworths Group, and that’s paying dividends now.
There’s also ongoing challenges around legacy. We’ve really started to see that clash between whether we invest in new features or address technical debt. That’s across our digital and our core platforms.
FST Government: How have you sought to deal with this technical debt?
James: Over the last four years, we’ve heavily invested in our core technology to get us to a state today where we can tell our board and our customers: ‘You can trust us’.
We’ve got disaster recovery and BCPs (business continuity plans), and resilient and modern infrastructure. We’ve moved from multiple incidents each week to almost nothing. But that conversation around whether we innovate in this new feature or whether we lifecycle manage some old equipment is ongoing.
It’s a point I’ve made before, but lifecycle management is the new ‘sexy’.
The conversation used to be about simply replacing servers or networks or what have you; we’ve now turned that on its head to say that, every year, we’re going to invest X amount – and it’s a large figure, probably half of my capital portfolio – in lifecycle management, because we recognise that that’s what enables our innovation and our ability to go fast when, say, a situation like Covid arises.
All that infrastructure is already there. We don’t have to think about replacing those ‘1,000 servers’ before we can do anything else. We can actually just go! Addressing that technical debt is a huge unlock for innovation.
FST Government: Do you feel, then, you’ve reached a point where legacy is no longer a significant burden for the business?
James: Yes, as the summary word, with some red colouring on the heat map. Some legacy systems still need substantial work; however, services that support key functions for customers and supplier partners have all been addressed.
When I came on board four and a half years ago, things were in a bit of a state. Our group function, which supplies about 70 per cent of the services we consume in New Zealand, was halfway through its modernisation program. They’ve come a long way since.
We’ve just now moved our digital platforms onto Azure – probably the biggest thing we’ll do this year – that will modernise the final core piece of technology that we rely on.
We’re in a good spot, but there’s still more to do.
FST Government: So the goal is to move all-in on public cloud?
James: Public cloud where we can. But the reality is that it’ll be a hybrid for a period of time. (We do want to get to a point, though, where you can cut the cord on any one key function without interruption).
From this, we’ve been able to rapidly switch to a work from home capability; three years ago, this would’ve been considered a substantial project. Our SaaS-enabled contact centres, which use Genesys Cloud, have been a huge unlock for the business, where onboarding and day-to-day job functions can now all be done remotely, rather than having to do this through our physical centre. I love this!
We’ve also got Genesys plugged into our virtual assistant, Olive, which takes advantage of Google’s voice services. Through this chatbot, for example, we can enable customers to make refund requests through voice rather than having to speak to someone. Of course, that capability is still developing.
FST Government: How has Covid impacted Countdown’s digital agenda and, indeed, how has it redefined your leadership?
James: We’re lucky, Countdown’s always had a passion for the online space and there’s continued investment throughout. We’re in our 15th year of offering an online service. Our first incarnation of this service (which was sent out through CD and emailed customers orders to us!) would hardly be recognisable today. Today, we’ve got world-leading penetration of online sales – between 13 and 15 per cent of our total sales are now online.
As with everyone else, Covid effectively propelled our digital strategy two years into the future.
We immediately saw a bump in users and a bump in capacity requirements, which obviously put a strain on all logistics. However, a few key things changed for the business. During the first lockdown, we transformed five of our walk-in stores into what we call ‘dark stores’ – that is, purely for collecting online orders.
The big leadership shift is – and I’ve mentioned this before – is best illustrated by example. During the first lockdown, we had an executive crisis meeting and the initial questions were posed: ‘How were sales? Did we manage to deliver orders?. At this point one of the execs stood up and said, ‘Stop! Can we just stop talking about sales!? We are a grocer and our role is to get food to families that need it’. Of course, everyone acknowledged that they were right.
We’re essentially returning to our roots as a grocer: getting food to customers and their families as quickly as possible, identifying the people that need it the most, and getting it to them first. That was a big turning point and a defining singular purpose for us.
FST Government: This consolidation of purpose is an important mindset shift, recognising, first and foremost, you are very much an essential public service.
James: I’ve heard this from so many companies. Being able to unify behind a single purpose exponentially accelerated what we could deliver. Suddenly there was no such thing as a silo.
FST Government: You’ve been rightly commended for your qualities and successes as a technology leader. What do you think best defines your leadership style?
James: This is going to sound very trite, but authenticity is really important to me. And not in the sense of simply telling you about everything that’s going on in my life, but bringing my whole self to bear.
If I’m truly authentic with myself, I must also acknowledge my whole self.
For instance, I can be judgemental at times; adding empathy into that judgement can ensure that it’s also constructive.
FST Government: And that’s also indicative of some strong self-reflection as well, understanding your limits and characteristics about yourself that might or might not play well with your team.
James: It’s a hard journey of self-discovery if you want to be a good leader, without a doubt. It’s filled with self-reflection, self-doubt, and hard truths where you have to understand why you do those things that you do. And no one ever really solves it.
But the realisation and understanding that, if you’re going to be in a real leadership position, you’ve got to know yourself. It’s recognising that you’re going to have to put it out there, take some risks, and show some vulnerability – that’s where you’ll see a big shift in your leadership.
FST Government: The influx of data has presented both an opportunity and an encumbrance for digitally enabled organisations – and no less for a retail business like Countdown dealing with a growing stream of transaction data and customer data. Firstly, how can you ensure you’re utilising these assets in an ethical way?
James: When we talk to our customers about what they want from us, we’ve distilled down to the idea of ‘Know me’: Know who I am so that you can add value to the relationship we have.
Customers want us to know them, but they want us to feel that it’s a privilege to have their information; that’s an important responsibility.
We may collect it, but it’s not our data – it’s the customer’s. It’s about designing systems that can give you great insights, but also give you a lot of control and granularity to pull that data and give the customer transparency around the data we have.
FST Government: How then is data shaping your wider technology agenda?
James: The old school thinking – and it’s still relevant – is that there has to be a benefits realisation. We try to bake that into what we’re doing from the start. We ask: Are we getting value? Are we releasing value early?
It’s not just talking about widgets, but about talking value, articulating a factual story from the start, and then proving it out upon delivery.
FST Government: Coming from the retail space, you’ve got a unique, ‘outsider’s’ perspective on local governments’ capabilities as a digital services provider. Where do you see the successes and where have you noticed any glaring gaps in local government services?
James: It’s been pleasing to see a shift to online services – though, of course, with varied success. I haven’t had to call a contact centre for many years to get a service from my local council, which probably indicates they’ve been designed particularly well.
A government agency is something we, as the public, naturally throw rocks at because it’s ‘our money’ without necessarily taking into consideration the value that we get back in return.
However, my challenge to everyone in local government and also national government is to be customer-first – after all, your constituents, for the most part, fund the work that you do.
This is not only about improving the experience, but also in measuring those experiences and telling your constituents that it has improved in order for them to really see the value they derive from your services.
There are also a lot of opportunities to make processes transparent to people and bring that to the fore. For instance, in the retail space, someone who buys a banana might want to know how fresh it is or how ethically it was sourced. Using blockchain, they could trace it back and see it came from, say, Ecuador, as well as who grew it and how long it was in transit.
FST Government: That point on transparency is crucial, and certainly key aspect of reinforcing trust between government and their constituents.
James: Imagine where you can, for instance, report a pothole, submit a photo to a government site, and, crucially, track its repair status. You might get a notice that it won’t be repaired for six months, but at least you know and can then lobby to get it done faster.
If the government can show me that they’ve taken action on a constituent’s behalf to save them from having to come out to an office, and then share value back with them that their issue will be addressed within a period of time, I see that as an enormous value-add.
FST Media: What lessons do you think the public sector can take from the retail sector’s approach to front-line digital services innovation?
James: It’s harking back to my earlier point on experience led with customer-centricity.
We’ve got to stop talking about widgets and start talking about value.
I don’t care that you re-gravelled my road or replanted some trees: Why did you do that? What was the benefit? Sell the story to me – that’s key!
The other thing would be to take a structured approach to innovation. We can’t just jump on every new idea that comes through and say, ‘We’re innovative!’. If there’s a new innovation, we need to ask: Will it solve a real human customer problem we have? And will it deliver value back for your customers (or in this case, constituents)?
FST Government: You touched on blockchain in retail space as a means of tracing the supply chain for goods, which in today’s consumer-conscious could prove a huge game-changer for the sector.
Looking to the public sector space, what technology do you feel will fundamentally transform the workings of government and perhaps society at large?
James: This may sound ridiculous, but in the retail space at least we’re seeing opportunities in virtual reality (VR) for training new team members. Rather than having to bring trainees to a dedicated facility, they can sit in a staff room of a supermarket and work through all their initial training. From our experience, people are really liking it and they’re actually learning faster!
Broadening this out, however, and coming back to the early point of transparency, I think the smart cities framework, tied in with 5G, will have an enormous impact.
Providing transparency on the flow of the city – of population movements, electricity and lighting usage, traffic and so forth – could be transformative.
We can really derive a lot of value here, using APIs to democratise this IoT sensor data from around our metropolises, to develop new services or improve the liveability of the urban landscape.
Personally, I’d also love to see governments leaning into the technology aspects of urban farming. For instance, robotic farming could sit within a supermarket, a department store, or even a suburb and be shared amongst the community. We could look at mandating that all new apartment complexes must have some sort of renewable urban farming attached to it. That’d be amazing. There’s also a nice piece of theatre attached to the experience of knowing that the lettuce you bought was grown right through that glass window.
Embracing some of those technologies that could drastically impact our primary industries, I think, is a huge opportunity for us in New Zealand, for our local governments, and our local retail industry.
Steve James is a featured keynote speaker at the 4th Annual FST Local Government New Zealand Digital Summit, exploring leadership and the changing dynamic in principles and team dynamics.
