05 Oct CIO Leadership Series: Kohl's Jeff Marshall challenged by explosive growth
Menomonee Falls, Wis. – Jeff Marshall is juggling a number of important strategic initiatives for Kohl’s Corp., but it’s not easy to pinpoint which one is the most critical.
If you ask people in logistics, you get one answer (logistics, of course). If you ask people in the stores, they would cite store initiatives to improve the customer experience and a partnership with Chase to better manage credit operations. If you ask the board of directors, they would say merchandising initiatives and new stores have the greatest impact on the balance sheet.
In truth, the answer is “all of the above” because Marshall, senior vice president and CIO of Information Services for Kohl’s, loses sleep over all of the balls he has in the air, but mostly he tosses and turns over how best to accommodate the company’s rapid growth.
Thanks to that growth, Kohl’s IT environment has, in turn, grown in complexity. The challenge is to stay ahead of that complexity, which places demands on IT resources and deliverables.
How much demand? Kohl’s, which reported $15.5 billion in sales in fiscal year 2007, will add 112 stores this year and have 929 stores in 45 states by year’s end. What’s more, the corporation plans to add 100 more stores per year over the next five years.
As Marshall explains, there is a trickle down affect to adding stores – not only more cash registers to integrate into the network, but the entire network infrastructure has to grow to support it.
Adding even more complexity is all the new merchandise, cosmetics, fragrances, and national brands each new store is stocked with. Accommodating this complexity means working very closely with various business units to make sure all business processes are synchronized to the greatest extent possible.
“It’s a process issue and it’s a people issue, and they all have to be in lockstep,” said Marshall, who previously served as CIO and president of the Men’s Wearhouse corporate apparel division.
And, of course, it’s a technology issue. Adding the right technology solution enables the national retailer to work more efficiently, whether it’s integrating data and business applications with the Tibco enterprise service bus technology, which is part of a new service-oriented architecture with SAS analytics sitting on top of it, or whether it’s adopting tools that automate processes to assure greater alignment with business objectives.
There are many opportunities to use technology to improve planning and allocation of merchandise so that Kohl’s can better “buy, sort, and market it,” explained Marshall, vice chairman of the National Retail Federation’s Information Technology Council.
The technology deployments have had a dramatic impact on the merchandising process, specifically more precise planning and allocation of merchandise. Kohl’s is one of the rare companies that reports higher growth in profits (31.7 percent in FY 2007) than sales (16 percent).
“We’re pleased with the results,” Marshall deadpanned.
No failure to communicate
Marshall said Kohl’s has set up a fairly consistent decision-making process for IT implementations across the enterprise, one that focuses on cost and return on investment. The company applies that approach to every project, large and small, to manage what it does and what it spends.
Communication is both internal and external to the IS organization, and valuable for getting the word out and tracking user feedback. Each business unit knows what’s expected of it and what its responsibilities are, and Marshall doesn’t take this aspect of IT planning for granted.
“It’s a critical element,” he said.
Marshall is not part of the Kohl’s board of directors, but he regularly meets with a number of senior executives to make sure everything is “synched.”
There is no one single lesson he’s learned from a large IT implementation, but many little things. First, ensure that employees and project managers and those executing each project clearly understand its requirements, motivations, and expectations. Then, there is testing, testing, and more testing throughout the implementation process – testing the business case, the component systems, and end-user acceptance.
Part of that communication has nothing to do with implementation, but encouraging innovation. “There are always opportunities here to think outside the box,” Marshall said. “That’s encouraged.”
At Kohl’s, there have been innovative initiatives for new processes, different personnel deployments, and for new technologies or the integration of new technologies.
The IS Department is encouraged to devote time to designing and developing ways to operate faster and smarter. Good ideas get “bubbled up” and challenged along the way, and they are tested against ongoing business and cost objectives and the company’s strategic platform.
“If it passes all those gauntlets, we invest in it,” Marshall said.
Having active employee participation in the innovative process is an underestimated worker retention tool, he added, something he has been preoccupied with during the company’s recent growth spurt.
With the growth has come dramatic expansions in the IS workforce – 100 new people in 2006 and 70 to 80 more expected this year and next. In this growth phase, Marshall spends a great deal of time trying to understand what IT professionals look for in a prospective employer, and he tries to give workers opportunities to express themselves in their day-to-day and in their technical-professional responsibilities.
Marshall, a graduate of Columbia University and the Julliard School of Music, understands the creative process. “We are pretty flexible in allowing people to try new things,” stated Marshall, who was recruited by the Men’s Warehouse to improve its strategic information and technology initiatives. “We try to focus on investing in their strengths. People, if you give them the opportunity, they will do some amazing things.”
At various career stops along the way – founding Icon Network Services, serving as executive vice president and chief operating officer of Johnson Controls, and a stint with Honeywell Information Systems – he has learned that compliance can be a friend, albeit a difficult one.
In retail, there are Payment Card Industry requirements of Visa, MasterCard, American Express, and Discover Card. They require Kohl’s and other merchants to pass quarterly remote vulnerability scans conducted by credit card companies – scans that are required for all Internet connection points – and to successfully complete a security self-assessment questionnaire with specific questions about internal security practices on websites and throughout the office.
Since Kohl’s is a public company, it also must adhere to mandates imposed by federal and state governments, including Sarbanes Oxley.
“It’s been good for us, but it’s sort of like taxes and insurance,” Marshall said of compliance. “You’d rather not, but it’s probably a good idea to have some insurance.”
Marshall oversees a IS staff of 620 – the company employs 114,000 people overall – and all IS employees are based at Kohl’s Menomonee Falls headquarters.
He does not distinguish CIO leadership from leadership in general because, in his view, the challenges of a CIO are not all that different from those of other executive leaders, nor are the tenets of leadership.
“I’m a strong believer in servant leadership,” he remarked. “My job is to promote, provide, and protect for 650 folks here.”