Why ASOS must unlearn the way it thinks business should be run

ASOS, once hailed as a trailblazer of ecommerce and a disruptor to fashion retail, is currently at a crossroads. Its recent earnings reported a drop in revenue as well as a fall in active customer numbers and it has experienced a number of senior exits over the last 12 months.

The business has confirmed it is undergoing a turnaround strategy, as it struggles to adapt to the fast-changing retail landscape. Many of its rivals, such as M&S and Inditex, have caught up with ASOS in developing their technology, online operations, customer experience (CX) and building out stronger brand offerings.

However, what has afflicted ASOS is not dissimilar to other businesses and sectors. There comes a time when the disruptor becomes the legacy business and rivals emerge. Growth can be maintained but only if the business retains the ability to transform, innovate for its customers and flex to meet the curveballs thrown by the modern age – ranging from logistics snarl-ups to rising costs of raw materials.

I consult with many businesses on a regular basis on how to solve the challenges they face when undergoing change in the current business landscape. One of the biggest pieces of advice I give is that you’ve ultimately got to unlearn the way you think business should be run.

I know it sounds outrageous. But if you want your business to be future proof, you must change. The business principles and practices of the past that helped you reach a peak are soon outdated. What seemed like a great solution at the time may no longer be the right strategy for today and sticking with archaic methods can risk progress, adaptability and speed. If you want your business to thrive you must reassess what you do, how you think, deliver and work. Simply sticking to ‘business as usual’ and maintaining a certain level of efficiency is nowhere near enough. I always tell my clients that they need to be in the business of constantly improving your business.

Of course, experience does count for something. But it can also stop us from changing. Too often, when approaching transformation, businesses tend to rely on experience and intuition. The problem is that experience is only based on what you have done before, and intuition is your internal belief system that is rarely challenged. Together they can lead to a cycle of repeating old solutions that are unable to fix new problems, and ultimately failure. The smart cut is to allow external knowledge to challenge your pre-conceptions, a classical growth mindset.

In my recent book, The Future Business Formula, I explore 12 approaches a business can adopt to challenge this mindset. One of them is to look at the people in the room. Tackling complex issues needs more than just intelligence and skill, you need to have a diverse team that can challenge the current status quo and give you different points of view. And diversity is not just about demographics. You can't have a business that is full of mavericks and creative people, nor one that is full of those that are excellent at operations or detail. You must find a balance whilst recognising that the two are complementary. 

This diversity of thought is crucial to encourage better scrutiny and ensure that teams are aware of their own biases. You should also be mindful about it when considering your customer. ASOS launched two-decades ago and marketed itself as a “fashion destination for twenty-somethings” - but that generation of twenty-somethings has since grown up.

We’re now looking at a Gen Z customer, and its necessary to adapt to their needs and wants to hit the mark. This could be in the form of building Gen Z advisory boards so you can listen first-hand and understand what they want, rather than assume it. It may seem strange taking on advice and suggestions from someone with less life experience than you, but it will influence the future success of your organisation. You also need to be where these new customers are. A lot of industries are worrying about their next customers, not because they don’t exist, but because they aren’t in the channels to market that the company has historically used.

Earlier, I mentioned that a successful business is constantly improving. This is a mindset I feel is really important. Just because you have succeeded in your ‘transformation’ doesn’t mean that is where it ends. Consumer expectations, needs and challenges are evolving all the time, and businesses too must evolve to be equipped to handle and solve them. 

But this constant transformation need not be a fancy new product or service launch. Think of your business as an operating system - one small upgrade or adjustment can make a huge difference. It is how you can remain ‘agile’ and that constant process of improvement to capabilities can help your products, services and experiences stay fresh and maintain levels of differentiation.

If you saw a car from 60 years ago, or even a phone from two decades ago you would instantly recognise it as outdated. And a business that is the same age - maybe even older - is still likely to look and function in the same way it has always done. The same management structures, practices and principles from decades ago when the world was simpler. But it is not too late for a business that was a former disruptor and is now falling behind to switch up its thinking and evolve. 

The key to success is to disregard learned practices and experiences and be open to challenging the current status quo. Create diverse teams that can offer different perspectives, especially when you may have blind spots. Overhaul processes from R&D to customer feedback to keep up with the pace of change. And this does not always mean momentous changes that can send a seismic shock through the business and take then eye off the customer. Small, incremental upgrades to certain processes or functionalities can be enough, from website functionalities through to internal improvements.

Change and transformation is not a start/stop activity and instead should be a fundamental attribute to every department, team, process and individual. Being able to adapt quickly and effectively can help keep organisations alive and relevant in the face of new rivals.