Asking the wrong question in times of trouble


I was interviewed on Comcast’s Money Matters a few years ago about how The Gap could rebuild its brand after several disappointing quarters of financial results and amid high-level leadership changes. Paul Pressler, their CEO of four years had just resigned, and the former fashion leading-retailer appears to be in dire straits.

I was asked by host Mary Caraccioli “Can The Gap recover? And if so, where should it begin?”

I responded that when a company gets in trouble, the leaders often ask, “What’s wrong?” It seems like a legitimate question, but it is often the wrong question. It’s usually far better to first ask, “What’s changed?”

For The Gap, a lot has changed: competition; fashion; consumers; and perhaps most of all, the Gap’s leadership. The company began with a strong fashion and design conscious founder Donald Fisher. Here was a leader who understand the fashion business, changing tastes, and how to respond to the market. But then he stepped away from leading the company in 2003.

As the years passed, competitors entered the market and began to offer shoppers alternatives. The Gap’s leadership gradually changed toward people who were better at business than at fashion – and better at meeting the numbers than at delighting customers.

Over time, The Gap’s dominance slipped. They acquired Banana Republic in 1983 and launched Old Navy in 1994 to move up-market and down-market. And while they made some seemingly good business decisions, they apparently spent more time watching their spreadsheets than watching customers.

Meanwhile, retailers like Target hired great designers to create new styles at lower prices. Customers looking for hip fashions left The Gap. So did some of the more conservative Gap customers who grew tired of the sameness of the company’s offerings. Gap leaders forgot that fashion is a constantly changing industry that requires you to pay attention every single day.

So now The Gap is trying to recover. They are looking for a new leader – and they have a big choice to make. Should they look for another business person who can manage the numbers, operations, manufacturing, merchandising, and all the rest of the business side? Or someone who knows how to lead the fashion world and attract buyers back into the stores?

Is it one perspective or skill set – or the other? Is that the choice they have to make? Or do they need to make room for both – working together. The Gap right now is proof that having just one perspective (business) is not enough.

So if you answer the question of “What’s changed?” – and acknowledge that in The Gap’s case it’s consumers, competition, tastes and trends, and perhaps much of the fashion industry – plus their own leadership perspective, perhaps now you’re ready for the next question….

“What’s wrong?” It seems to me that the answers to this question are now much clearer. The place to start fixing things at The Gap is at the top.

Re-posted from our archives