Building a culture of adaptability and resilience

Building a culture of adaptability and resilience

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  6/13/2018 1 Building a Cultureof Adaptability & Resilience built The Collective Journey “You cannot enter any world for which you do not have the language.” - L. Wittgenstein “The language which we are using today is insufficient to deal with the territory we have already entered." - D. Whyte
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  6/13/2018 2 The Traditional “Language”of LP LP Stores Safety Shortage People • Who are you in service to? Answer = Stores • What do you protect? Answer = Safety • How do you add value? Answer = Shortage • How do you accomplish this? Answer = People • Is your LP model adaptable enough to change? • Is your program resilient enough to persevere in todays changing retail environment? ? Step #1: Always Consider The Customer LP Business Safety ShortagePeople Customer • The Digital age has presented new opportunities and risks for the customer. • Customer touch points will always include stores, we must adapt the LP model to include all areas that touch the customer. • In order to adapt you can ask… How will this affect the Customer?
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  6/13/2018 3 Are you adaptingto the new expectations of the Customer? The role of Loss Prevention is clearly defined in looking for abuse, fraud & theft. We play a key role in guarding Customer TRUST. In Customer surveys, 83% say loyalty is driven by “Trust” and we believe the evolving role of LP centers around protecting that trust. Step #2: = Evolving Our Traditional View of “Safety” BCP Cyber Physical Safety Enterprise Risk • Resiliency in defending against all risk. • Think multiplier!
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  6/13/2018 4 BCP: Ten Disciplinesof Organizational Resiliency • Resilient-minded corporate culture & leadership. • Educated, empowered & self-directed workforce. • Community, no one stands alone. Cyber: Physical • Convergence: Gates, Guards and Guns + Gigabytes, Geeks and Governance.* • Data as an asset worthy of protection. • Clear Mission: “Create a physical firewall…”. • Concept: Stores as publicly-accessible data centers. • Risk: Reputational Crisis. *Source: James L. Turgal, Jr., Deloitte & Touche LLP
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  6/13/2018 5 PHYSICAL FIREWALL Risk & Compliance LeveragedResources Monitoring, Incident Response & Reporting (Cyber Defense) Partnerships Training, Awareness & Education (Governance) Cyber: Physical Enterprise Risk Modeling 0 500 1000 1500 2000 2500 3000 0 100 200 300 400 500 600 700 North America International • Use of “Traffic Light Protocol”. • Evolution of the Store Visit.
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  6/13/2018 6 Cyber: Physical Step #3:Evolving Our Traditional View of “Shortage” • New forms of shrink. • Fraud. • Margin Loss & Cost. DC/e- Comm Shrink Fraud Margin Loss Loss
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  6/13/2018 7 Erroneous Costs and Loss ofSales Margin Loss Total Loss • Broader scope increases business relevancy. • Identifiable Loss vs. Quantifiable Loss. • Focus on comprehensive approach to Future risk. • Build the model that fits your business. Bad Debt  Online/DC Shrink and Freight Claims Store Shortage Step #4 – Building a Resilient Mindset • Empower your team to set direction and be innovative. • Enable Performance – Cost Per Order (CPO) Model. • Explore the new “core competencies” of LP. Empower Enable Explore Evolved LP Team
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  6/13/2018 8 Empowering Innovation -Digital LP 1. Cyber - Lead evolving work related to emerging cyber risk – Physical. 2. Omni - Support business growth by enabling our Omni-channel business initiatives. 3. e-Comm - Manage entirety of the Gap Inc. e- Commerce platform. Three Functions Two Goals 1. Raise the collective IQ of Field & HQ ensuring Digital risk is understood and mitigated. 2. Reduce “Total Loss” in key categories of On-Line risk; Shrink, Fraud and Margin Loss. Enabling New Performance Metrics Digital LP “North Star” • What is your Total Loss? • What Payroll/Budget is partially or wholly dedicated to reducing that Loss? • What other Resources do you pay for? = Total Cost Per Order Metrics $0.55 per order $0.14 per order $0.07 per order $0.76 Digital Cost Per Order $0.76 Digital Cost Per Order $- $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 2016 2017 2018 2019 2020 $12.5 mil in Annual Opportunity
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  6/13/2018 9 Explore The NewJobs of LP…. Fraud Investigations and Chargebacks Freight Claims Investigation and Tracking e-Commerce Shrink Auditing Resale Website Auditing (ie eBay, Craigslist) Law Enforcement Requests e-Commerce Order Audit Store Protection Assurance Audits “Penetration Testing” Partnerships Training, Awareness & Education Monitoring & Incident Response Reporting Online DC Shrink / Transfer Shrink Omni- Channel Risk OiS Overrides/ Abuse Store Shortage Online Returns / Institutional Shrink Foreign Object Investigations Store Credit Card Fraud SVC Devalues SFS Rejections, Expires & Claims Investigations: ORC, CS, AI’s, etc. Total Loss Promo Abuse Loyalty Abuse KEY Cyber Omni-Channel (Store) Risk E-Commerce Collaborative Governance & Compliance Enterprise Risk Modeling Leveraged Resources OL Fraud Team Customer Abuse The Journey… Empower and Enable your LP Team Add value by addressing Total Loss Protect against Enterprise Risk Service Customer and BusinessLP is in service to the Stores LP protects against Safety incidents LP is focused on reducing Shrink The LP Team should focus on traditional LP Adaptable • Small shifts in the way we view our industry allow for exciting evolution Resilient • The core essentials of LP will be evolved to support the evolution of Retail
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  6/13/2018 10 The New Ecosystemof LP Digital Brands BCP Cyber Safety All Fraud All Financial Los All Shrink Cost Enabled Empowered Trust Stores LP Business Risk LossPeople Customer LP Store Safety Shortage People