Leading Through Digital Disruption: Case for Change in Morrisons

This study examines the digital strategies implemented by Morrisons to adapt to the pandemic and drive growth. It covers the case for change, gaining digital business agility, creating a digital ready culture, steering collaboration, and selecting leaders. Discover how Morrisons leveraged digital transformation to meet customer needs and increase profitability.

LEADING THROUGH DIGITAL DISRUPTION: “CASE FOR
CHANGE” IN MORRISONS

Executive Summary
Digital transformation can provide effective growth to an organisation. This study is based on
the digital strategies adopted by Morrisons in order to continue with their functions during the
pandemic situation. However, the following sections of this study will explain a lot of details
regarding the effective strategies of Morrisons.
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Table of Contents
Introduction................................................................................................................................4
Task 1: The Case for Change.....................................................................................................4
Task 2: Gaining Digital Business Agility..................................................................................5
Task 3: Create a Digital Ready Culture.....................................................................................6
Task 4: Steer Collaboration........................................................................................................8
Task 5: Select your Leaders.......................................................................................................9
Conclusion................................................................................................................................10
Reference List..........................................................................................................................11
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Introduction
The diversified products of Morrisons are the main attraction of people in the UK. This
retailing organisation was founded in 1899 and from the last 123 years a lot of major
decisions were taken by the leader of the company. The aim of this report is to determine the
digital transformation features adopted by Morrisons in order to gain a high amount of
profitability from the target market.
Task 1: The Case for Change
Background of Morrisons
Morrisons has two brands that are Safeway and McColl’s operating in 497 stores in
worldwide regions. This company offers different kinds of retailing products such as books,
clothing, food and drink, magazines, homewares, petrol and so on. According to the annual
report of this organisation the group revenue will be reduced from 17.7 billion in 2019 to 17.5
billion in 2020. On the other hand, the profit before tax increased from £396 million in 2019
to £408 million in 2020 (Morrisons, 2020). This indicates around 3% growth in the
profitability rate of the company due to the strategic decisions taken by the company. This
company is operating in Wales, Scotland, England and Gibraltar. Thus, around 11 million
consumers are serviced by 110,000 employees each week.
Reasons for digital transformation
Moreover, due to the pandemic outbreak the buying behaviour of customers has changed. In
order to fulfil the needs of customers, the leaders of this company have taken a lot of
approaches to use modern technology. According to the statement of Sampson-Choma
(2019), digital transformation in the correct way can provide a lot of scope to increase the
productivity of a company. Thus, digital transformation is beneficial to increase the
profitability rate and growth of the organisation. Business transformation involves a lot of
investment and strategic management. Besides that, proper training is important to be given
to the staff members so that they can accept the new business model in an effective manner.
As per the reviews of Rigby (2021), the online sales rate of the company has tripled due to
the supermarket diversified its digital channels in order to deal with the pandemic situation.
In 2021, the company adopted a lot of steps in order to deliver groceries through digital ways
to the doorstep of customers. This company ranked leading in “RXUX Top500 research” due
to the success achieved through its developed and transformed online service (Rigby, 2021).
During the pandemic situation, customers prefer to shop online by using their mobile devices.
In that period, the online booking system used by this organisation helped to meet the
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demands of customers and embrace the delivery system. The products of this company are
delivered by deliveroo in around 180 stores. This innovative strategy of delivery helped this
company to increase the sales rate by maintaining all the safety protocols.
Objectives of digital transformation
According to the findings in the above section, it can be evaluated that the organisation has
adopted a lot of innovative strategies for achieving success in worldwide regions. Thus, the
objectives of digital transformation in Morrisons are as follows;
● To satisfy the needs of customers by developing the internal technologies for delivery
system
● To improve the productivity rate of Morrisons for getting more profit in the upcoming
years
These two objectives can be fulfilled by Morrisons if more strategic directions are selected.
Task 2: Gaining Digital Business Agility
Digital Business agility has 3 main pillars that are “hyper-awareness”, “informed decision
making” and “fast execution”. According to Hathaway (2019), these pillars are technology
associated capabilities but not technologies. Therefore, adoption of any new technology in
business is dependent on the strategy, leadership, culture and governance of the company. A
value to all the stakeholders is added by the organisation. This is important for working in a
complex, ambiguous and uncertain environment. The ability to adapt to any external or
internal change easily is known as business agility.
Figure 1: Digital business Model
(Source: Global Centre for Digital Business Transformation, 2018)
Hyperawareness is basically the ability of detecting as well as monitoring any kind of
changes in the business environment. In this case, Morrisons has understood that the
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pandemic situation has changed the all over business environment for the company. In
addition to this, the buying pattern of customers has already changed during the pandemic
situation. Thus, there was a need to take a step in order to deal with the business in an
effective manner. The opportunities or risks of the business have been identified by the
hierarchy of the company. In the opinion of Lin et al. (2020), the sense of vulnerability and
need for adjusting the business model is the first step of taking action. As the governments of
multiple countries including the UK have announced a lockdown for reducing the spread of
the virus, people preferred online shopping at that time.
In this regard, Morriosons identified that using modern technologies can help to deliver high
quality products in a short time. Hyper Awareness of this organisation regarding the market
dynamics helped this company to take immediate actions. The next pillar of business agility
is informed decision making (Sobratee and Bodhanya, 2018). This explores the ability of a
company to make best possible decisions in any kind of critical situation. In order to follow
this step accurately this company collects data in the hyperawareness phase (Grinerud et al.
2021). This data is analysed properly by the organisation to take the best decision for the
company. Experts in Morrisons thoroughly analysed the depth of the situation and thereby a
lot of effective solutions were taken by the company (Singgih et al. 2020). As a result the
profitability rate of the company has increased. Now Morrisons is available in Amazon and
near about 50 cities and towns are offering the products of this company. Hendriyani and
Raharja (2019) represented that sales of Amazon accounts for nearly 10% of sales in the most
stores that are supporting the services.
Additionally, the multichannel strategy of Morrisons helped to generate £17.6 billion
revenue in 2021 that is 0.4% higher than the previous year. In addition to this, retail sales of
this company have increased by 7.8% LFL as well as 0.8% growth in whole sales have been
identified (Morrisons, 2022). Thus, it can be evaluated that the fast execution of the digital
transformation model helped this company to fight the pandemic situation in an easy manner.
This organisation has the capability to carry out all the business plans in a quick way and
effectively implement the solutions. Proper amounts of investment have been collected by
this company to execute the plan effectively. The use of AI for the delivery process helped to
enhance the tracking process that helped to improve the services of the company.
Task 3: Create a Digital Ready Culture
Utilisation of digital culture in this company is now ready to follow digital transformation.
According to Çöteli (2019), digital ready culture is important for following digital
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transformation in the company. Morrisons can further attempt a lot of steps to achieve
success in the company. Some features proposed by Google (2017) are as follows;
Figure 2: Characteristics of Digital Ready Culture
(Source: Google, 2017)
In order to follow digital ready culture as proposed by Google this organisation needs to
follow some strategies. First of them is putting consumers at the top most priority. According
to Kontić and Vidicki (2018), customer satisfaction is the first important part of success of an
organisation. Thus, satisfying the needs of customers is important to increase the revenue of
the company. In this regard, Morrisons needs to recognise the needs of customers in all areas
operating by the organisation (Delanoy and Kasztelnik, 2020). Therefore, knowing what
customers like is the most important part of the success of an organisation.
In the next step, a collaborative workplace culture is important to be created by the company.
A collaborative working environment helps employees to work together for achieving
success in the company (Baker et al. 2020). Collaborative working environment helps to
increase the communication among the staff members in the organisation. New ideas of
innovation can be found through this process. As mentioned by Hemerling et al. (2018),
higher productivity is associated with teamwork of an organisation. In this regard, Morrisons
can follow different kinds of teamwork strategies in order to increase the growth of the
company.
The third step of creating a digital ready culture is instilling innovation. As per the opinion of
Mendes et al. (2018), innovation is important to change the dynamics of different kinds of
business operations. In this regard, Morrisons needs to invest more in the R&D department of
the company in order to adopt new ideas of innovation. Contributing an amount for the
research purpose and hiring experts in this department can help this company to change the
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business model (Beauchamp et al. 2021). Digital transformation can be easily implemented
through applying fresh ideas. Any new idea is associated with different kinds of risks
(Castillo et al. 2018). Henceforth, identifying the risks in the company is important to create
new mitigation plans for effective growth. Thereby, taking calculated business risks in the
company can help this organisation to reach the goals of the company. For example, Apple
has invested a lot of money in the R&D department for improving the financial growth of the
company (Sepuru and Mohlakwana, 2020). High tech solutions used by this organisation
helped to get the attention of customers in the company.
The fourth step is becoming a digital champion. Morrisons needs to embrace the complexities
as well as capabilities of different kinds of digital technologies for becoming digital
champions. In the opinion of Maskun et al. (2020), different kinds of organisational issues
can be dealt with through the use of effective decision making strategies. For example, the
use of AI in Amazon warehouses helped the company to enhance the supply chain
management of the company (Ding et al. 2019). Moreover, Morrisons can also achieve a lot
of growth in business through the adoption of innovative strategies. Retail business is now
more efficient and competitive in nature (Chakraborty et al. 2020). The e-commerce channels
are helping the retailing industry to fulfil the demands of customers. Morrisons supplied
Amazon Fresh as it delivers different kinds of groceries to the Prime members of Amazon.
This feature helped the company to deliver all the needed products to 50 cities and towns of
the UK.
Task 4: Steer Collaboration
A bunch of boxes for online delivery is ready in Morrisons for supporting all the vulnerable
as well as shielding customers. In addition, a phone ordering delivery box is another feature
adopted by this company to fulfil the demands of elderly customers (Shuffler and Carter,
2018). Customers who are not having internet access can order their required products by a
single phone call. During the pandemic situation self-isolated customers also got the support
from this company that helped to achieve the financial target in this year (Hallinger and
Hammad, 2019). Now the company wants to create a new role that is Chief Collaboration
Officer (CCO), in order to enhance the teamwork in the company.
Thus, the role and responsibility of CCO would be;
1. Maintaining communication between the team members
2. Enhancing motivation and collaboration among the team members
3. Encouraging people to accept innovation through change management
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4. Staff planning, recruitment
5. Risk management
6. Providing necessary training
All of the above mentioned roles are an important part of a CCO's job in the company. The
CCO in Morrisons can increase collaboration among the team members as well as other
departments of the company (Peduzzi and Agreli, 2018). Arranging meetings and
conferences in the company can help this organisation to boost employee-employee relations.
A proper bonding among the staff members can be maintained through using this technique.
As per the reviews of Ilan (2020), maintaining transparency with the team members of the
company can help to create a positive bonding among the staff members. However,
development of management style in the company can help to support the employees in the
organisation. All the team members can be encouraged by understanding Tuckman’s theory.
The theory of Tuckman mentioned that, there are different phases of teamwork and team
development (Reeves et al. 2018). Therefore, improving the relationship between the staff
members in the company is possible through using innovative strategies such as enhancing
communication, building trust and so on.
Task 5: Select your Leaders
The leadership style of Goleman is appropriate for digital transformation as it helps to
motivate the staff members to work together. According to this theory, there are 6 types of
leadership styles that can be followed by a leader in a company. These are;
1. Democratic
2. Authoritative
3. Coaching
4. Pacetting
5. Coercive
6. Affiliative
David Potts is the CEO of Morrisons who has taken a lot of decisions in the business to adopt
digital transformation. The affiliative leader supported all their employees while taking major
decisions in the company. Potts has 40 years of experience in the retail industry that helped
him to lead this position and take this organisation to this place. The digital transform
company can use further approaches or techniques to develop its leadership styles. According
to the opinion of Mutis and Ramachandran (2021), affiliative leadership is important for
making a positive working culture for all the team members in the company. This, the
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actionable advice or any kind of correction in the ongoing business process can be taken by
the company by this leader. However, in order to increase the efficiency of digital
transformation in this company the organisation needs to follow more initiatives. The Growth
model is described in the below section to elaborate the functionalities of the leader.
● Goal: Coaching session is important to be given in the initial phase by the leader of
the company. In this regard, a well defined target is important to be followed by the
company.
● Reality: An opportunity to mentor the employees of the company is important. This is
another important part of leadership development in an organisation.
● Obstacles or options: The next step is becoming creative in nature. In the opinion of
Adler and Laasch, (2020) creativity is an important part of achieving obstacles in the
company.
● Will or way forward: In order to achieve the goal of reality it is important to take a
step forward. According to Landon et al. (2018), an organisation can achieve growth
through effective performance management strategies.
Conclusion
In order to conclude this report it can be suggested that proper execution of digital
transformation is important to achieve success in a business. In addition, complexity is a part
of new strategies and there may be different kinds of challenges. For achieving success it is
important to take a lot of risks. Morrisons have successfully identified the purchasing
decisions of customers during the pandemic situation and thereby a lot of business decisions
were taken by the company to follow multi channel strategy of delivery.
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