By Hal Gregersen and Jeff Dyer
Always look through the customer’s eyes. Follow the customer. On the surface, these are two simple phrases. But for U.K.-based e-tailer ASOS, these are founding and guiding principles, fueling the fast-fashion brand’s meteoric growth – and its high ranking on the Forbes’ Most Innovative Growth Companies for 2016.
The customer, emphasizes ASOS CEO Nick Beighton, is the most powerful change agent there is in any organization. And who knows how to reach and engage with twenty-something millennials better than twenty-something millennials?
ASOS launched in 2000 (originally as “As Seen on Screen”) at the dawn of the new millennium. It was a small operation with big ambition. From emulating celebrity fashion a decade ago, today it’s setting trends – selling more than 850 labels. So how did this tiny start-up with just three employees become the U.K.’s leading fashion site? Arguably, the reasons are many: it offers something for everyone – men and women; big, small, slim, curvy and pregnant. Its prices are reasonable and accessible (its new line of fashion-forward bridal gowns start at just $200). Its clothes have an (eco) conscience – organic, fair trade and faux fur. Its site is easy to navigate and it’s painless (and free) to return items.
ASOS is well on its way to establishing itself as a designer brand, not just an online “store.” Its own-label creations are worn by such high-profile fashionistas as Rihanna, Kate Hudson, Taylor Swift and Malia Obama. It’s a smart strategy, actually. Rather than pursue traditional advertising, ASOS recently provided dresses to President Obama’s daughters; their fashion sense is developing and fashion magazines and blogs are interested in knowing – and publishing – what they wear. The publicity was free for ASOS and drove huge interest in the brand.
We recently spoke with Beighton, and it’s clear the company’s secret sauce isn’t solely its clothes; from the top down, ASOS is fluent in the language of its millennial buyers. The company has processes to deeply probe into and understand millennial thinking and behavior. ASOS’ greatest source of customer insight and innovation is arguably its own people. The company demonstrates distributed leadership in action. Every employee (many millennials themselves) is expected – and empowered – to conceive and create meaningful products, services and processes that speak to its twenty-something customers.
Eighteen months ago, ASOS made some changes to its onboarding. Every new hire, regardless of position, starts on Tuesday – because who likes Mondays? And instead of thumbing through the employee handbook or browsing files to “learn” about the culture or job requirements, each new employee goes right into a meeting with the executive team.
Beighton, who served as ASOS’ CFO before taking the reins from founder and former CEO Nick Robertson last year, shared: “We ask them to share something other people in the room won’t know, something about themselves. We ask questions that range from: ‘who’s your ideal leader?’ to, ‘if you were a movie star, who would you be?’ Or, ‘if you have a time machine, where would you go and why?’” He continued: “And we [the execs] reciprocate. Why? Because it’s your first day in, you’re meeting company executives and you’re sharing something really personal. It never gets any worse than that.”
The barriers are broken, the hierarchy is eliminated, he explained: “It’s no longer, ‘Here’s the CEO.’ It’s ‘Hey, it’s Nick B.’ It’s not, ‘There’s the CFO.’ It’s, ‘There’s Helen. Helen just told me something very funny and very embarrassing.’ Our millennial workforce responds. It builds rapport right from the first day.”
But it takes more than a personal connection to grease the wheels of innovation. At the end of the Tuesday, Beighton also takes the neophytes on a personal tour – a history of where ASOS comes from and a vision of how it will get where it’s going. It’s not just pie in the sky, here are all the extraordinary things we’ve accomplished; more telling could be the ideas that didn’t turn out so well, like the story of the chameleon phone.
Parents of millennials might remember that corded phone – an animated plastic green reptile on a log that played Culture Club’s “Karma Chameleon” when it rang (made popular by a British Telecom advertisement). ASOS, struggling financially at the time, capitalized, deciding to sell the phone during the 2003 holiday season to bring in quick sales, which it did. The phone quickly sold out and solved the company’s cash flow crisis. But almost half of the orders were returned in January. “Cool tune, crap phone,” recalled Beighton.
“We’re sharing moments in our journey,” he added. “Those are the things we do to get them right into the culture. Right into the history … then I say, ‘This is how we behave. This is why we behave this way. This is what makes us different. These are our founding principles, as important to us today as they were 15 years ago. You are an ASOS entrepreneur.’”
It’s harder than it sounds, especially during times of change and growth. “Sometimes you start putting in command and control structures because you think it’s appropriate – that’s what grown up companies do. And then you end up with hierarchy,” Beighton admitted. “We’re in the process of dismantling all of those and allowing them [employees] to thrive on the chaos and putting decision-making right back down to the lowest level.” By doing so, ASOS is ever closer to its customers. And according to Beighton, as long as its in-house entrepreneurs look at problems and solutions through the customer’s eyes and apply the ASOS lens – its founding principles – “they’re not going to make a bad decision.”
This is the Innovator’s DNA (iDNA) in action. Our research shows how five distinguishing discovery skills – questioning, observing, networking, experimenting and associating – set great innovators apart from the good. Beighton and other ASOS leaders help its millennial employees strengthen their iDNA skills from the second they step foot through the door. It’s refreshing – and rewarding; it’s largely what led to the success of ASOS’ new bridal line.
The inspiration started online – where ASOS’ millennial employees and customers are most comfortable (and also where ASOS, as a culture icon and fashion brand, thrives). At ASOS, social media isn’t a tool to market. It’s a way to engage and do so authentically. It’s an opportunity to surface new insights and act on them. Remarked Beighton of the company’s social media presence: “This should feel like your best friend sharing a message, sharing an idea, sharing something funny, rather than the company pushing something to you.”
A flux of chatter and inquiries on online channels around bridesmaids’ wear piqued the retail team’s attention. For the twenty-something bride and her besties, choosing a dress they all love can be a “bloody nightmare.” Confident they could create a sexy, diverse, on-trend yet inexpensive collection of dresses, ASOS took the leap. The results exceeded expectations – so they then set their sights even higher (and bigger): bridal gowns.
Beighton wasn’t convinced. It’s one of the most important days of a bride’s life. How could ASOS possibly get these gorgeous gowns delivered around the world in appropriate packaging without damaging the dress while avoiding exorbitant shipping costs? But he didn’t stand in their way. The team solved the problem, and the packaging is almost as innovative as the dress line: a pizza-like box in a pizza-like bag. At the ASOS warehouse, a dedicated bridal team looks after, packages and hand delivers the boxes to the couriers (even wearing white gloves when handling the dresses).
Added Beighton: “Bridal has been one of our best pieces of product innovation. The feedback is simply brilliant. The product is exquisite. The price points are amazing. Tweets are coming in, ‘I just want to get married so I can buy one of your gowns.’ When you deliver that experience to your customer, it’s the most heartening thing a chief executive can ever see because you know everything is in the right sequence. And it didn’t have anything to do with management. It came straight up through customer feedback. The team said, ‘We can do this.’ And off they went.”
But it does come back to building and nurturing a culture of innovation. And giving employees the tools – and runway – they need to create.
Beighton recalled a moment recently when one of the product team employees challenged him on that very notion. “There were about 30 of us in the room. She said, ‘Nick, one of the reasons I love ASOS is the freedom to create amazing products for people like me. And I love that you give me the freedom to do it. But you’re not a product guy. How are you going to improve me?’ Whoa. I asked her, ‘What do you need from me to help you design more products? She went, ‘I need this, this, this, this and this,’ and I said, ‘Okay, let’s talk about that. Don’t expect me to design a dress for you, but expect me to get the barriers out of the way.’”
Leadership and innovation can be – should be – uncomfortable at times. But it’s those tough, awkward moments that can have the biggest impact. ASOS is no longer a scrappy startup; it’s a maturing brand that started out riding the digital revolution. Where it once followed, it now leads, earning its reputation for pushing beyond what’s expected and easy. As Beighton told us, “Never be afraid to turn left when everyone else is turning right.”
