Michelle Gass, Chief Executive Officer, Kohl’s
Julie Sweet, Chair and CEO, Accenture  
Moderator: Alan Murray, FORTUNE

Most Powerful Women 2022 - Driving Fundamental Change

and so we're going to continue the conversation now with two leaders who exemplify purposeful leadership. Michelle Gass is Chief Executive of coals, she oversees more than 1100 stores e commerce operations and more than 1000 associates and julie Sweet is chair and chief executive of accenture. She was number two on this year's M. P. W list, so she still has something to strive for. Um and I'd also like to mention as they come out, please Michelle and and julie join me. That center was one of the founding knowledge partners for fortune connect. So we've enjoyed our support and partnership from them. Thank you both for being here and julie thank you for your support for connect. Well it's a great program so I will give a great plug for it because it's really helped us connect our next time leaders to great people in content. So we've really enjoyed being able to be one of the early partners know and you've you've helped us form it and Michelle, thank you for joining for this conversation. So, so the topic has changed, which is uh I mean I've been a journalist looking at business for more than four decades. I've never seen anything quite like what you all are dealing with now. I mean you have this huge technology revolution julie that you're right at the center of pretty much a complete rethinking of the purpose of the corporation, you have the energy transformation going on, which is huge. Uh and now thanks to the pandemic. We're all rethinking how we work at the office. So so many different levels of change going on at the same time and julie, if I can start with you, how do you advise companies on how to deal with this so much coming at them at once? Well, alan I think you you have you caught it well there is so much and so, you know, it's important as leadership teams to be able to both zoom out and zoom in uh in the sense of both what you're going to drive today, but how you think about the future. And so we are really talking to ceos today around five key forces of change, the first being the total enterprise reinvention through technology. I'm fond of saying that every strategy leads to technology and I think you're gonna hear a little bit more about that from Michelle and uh and that's different though than what we've seen over the last several years when you talk about digitization, because it's actually an approach that says, I know that I have to systematically reinvent everything that we do every part of the is everywhere we went, we engage and and that has profound implications for how you invest and how you think about the future. The second is talent and I'm sure we're gonna get into that and it's about how you access talent create talent and really unlock the potential of the talent. The third is sustainability broadly, of course it includes the energy transformation, but it's also about, you know re skilling your people, it's about diversity, that's what you do in the communities and how that all translates also to your bottom line. The fourth is the metaverse continuum. And I will say lots of debate around this, but there isn't a company or industry that doesn't need to be thinking about what is it going to be like to go through virtual in and out of the virtual and physical world and how will that profoundly change everything from what we buy, how we buy it to how we work. And then finally the ongoing technology revolution, which is both what we're investing in today. But you know, we we already have paid work in space and so you know, being able to think ahead and really understand those trends and how they might affect you is also an important part of what Ceos and their leadership teams have to do today. And I want to come back in a minute to how you do that, but let's dive a little deeper because certainly the retail sector has felt this In spades. I mean we saw the incredible acceleration of everything digital during the pandemic, but then also continuing trends. How's it affected cold? Oh my gosh! I mean when I think about the last time, I was actually at this conference 2019 to where we are today, like retail is a completely different industry. Um so many changes from, you know what living through the pandemic supply chain challenges the spikes in demand, that pull back and demand labor etcetera. But I say, you know when you take a step back, probably the thing we can all relate to is just the change in how people shop and what was already a trend going into the pandemic on online clearly dramatically shifted so that everybody um is comfortable. But I think more than that it raised the bar and the customer really is in charge. So you know, they want these, they want convenience, they want Discovery, they want inspiration, all of that and depending on what needs state, you know, depends on do they want an in and out experience or do they want Discovery? So for people like us, it's how do we deliver that online? It can be quick in and out or in the store where you do things like buy online pick up in store. Now. We're even doing that, not at the service desk, but you know, you can do it on your own with, but it is definitely not what we thought five years ago, the end of brick and mortar. Absolutely not. I am a huge believer in stores and you know, I think we've all felt this as well. Got back to some normalcy, you know, there's a social part of shopping, shopping should be fun and entertaining. Sometimes it's more mission driven and coles is great for that when you get your socks and your underwear and what have you. Very big businesses for us, but at the same time more and more, we're seeing customers who want unique brands and we're doing a lot of transformation on our portfolio, including our recent launch with support. I mean the other, yeah, the support deal we should talk about. But the other thing that's uh, must be so difficult right now is because in part because of these outside forces, consumer tastes changed so fast. I mean one day everybody's buying yoga pants and the next day they're on to something else. You can't really predict it based on past trends. No, and I think that's where data comes in. Um, so we have a lot more information today. Um, that's driven by data versus what did you sell last year? But I also think it's important as a retailer to not just react in the here and now, but look at long term trends. So for us, you know, we have this strategy to really win in the casual and active lifestyle. People, another shift coming out of the pandemic is, you know, maybe they're dressing up a little bit more, but their expectations about being comfortable is here to stay. So, um, they are still working to work. No, I mean look at look at what you're wearing on your feet, you get the sneakers, you're looking cool. I mean, so I think on the days where there's a formula, a formula for how you want to dress. But I think comfort is universal and that's right in cold sweet spot. But you have to constantly be adapting and evolving your, you know how you're showing up to make sure it's relevant. So julie, you advise companies in multiple industries on how to deal with that. What's the top level advice you got? Everybody in this room is dealing with this in one way or another. I think there's no question about that, what's the top you give them on how to manage it? Well first I just want to reinforce that, I'm not giving up my yoga pants. I was like no, I'm not giving them up. It is very very very good. You know, I would go to data as being the universal and you just heard that from Michelle and and you know this is the area where I think everyone intuitively understands the data is important and I have not yet found a company that has actually solved the problems of data and that's in part because up until really the pandemic, lots of things around data were point solutions, you are solving a specific problem because it was really expensive too To solve the big data problem. And what we've been going through over the last 2.5 years is actually a fundamental shift in business where we're re platform ng to the cloud and just to give you some sense of it a decade ago, our cloud business is a billion dollars today. It's $26 billion $12 billion dollar business. So it is just massively changed. And the reason that's so important when you think about what companies have to do with data is that is it is the fundamental foundation to be able to use data in real time. What you're starting to now go to and you are already leading, there is data at the edge in the store, in the hands of those who are serving customers in the hands of the customers. There's a fundamental different way that you have to both build your technology but understand how people want to shop and then how do you deliver that and how do you deliver that at the right time. And so as you think about, you know, the fundamental changes whether it's the long term business trades the five key forces of change, Making sure you understand what is your path to true. Being able to capture your own data and other data to use it as a competitive advantage is probably one of the highest priorities today for companies, people have questions anybody want in here. I want to make sure that if you do have questions, as I said, I know all of you are dealing with this happy, happy to take them. Let me ask you while while people are getting their hands moving into the air, uh recession seems to be on everyone's lips, we're headed for one. How does that affect with so many demands on the business to invest for change? How do you do that when resources start to get squeezed? Yeah, so sure I'll start that. I mean, I think the coals, you know, we've already started feeling it. Um you know, we operate in the more discretionary categories as opposed to food and gas and where a lot of buzz Are being constrained and so as we see this unfolding, we are quickly adapting to make sure that okay, parts of our product portfolio that stand for value, we're amplifying. I'm so excited. We just talked about consumer data. I mean we serve 65 million customers across the country. We have over 30 million. Our loyalty program, it is like for someone passionate about data, it's it's a treasure trust and we're able to tailor and actually do different offers for julie and Allen based on what's going to get them motivated to come and shop. So that that especially in this environment is extremely powerful to make sure that you're giving offers to people who need it versus not. But there has to be a temptation julie when you start looking at those numbers and the resources start to shrink of saying, let's hold off on that, let's hold off on this, I would say yes and what more companies today that what we're seeing is they're using this as a catalyst for change. So the harder things oftentimes, the harder things are around really structurally changing your cost structurally changing the way you're working. And if we go back to the need to do Total Enterprise Reinvention, one of the barriers is that it was easier to do things around the edge to talk about innovation as a separate group to do something that's very clear at the consumer actually fundamentally run finance differently, go from finance all the way to the customer to change the supply chain so you can act on the data. It fundamentally changes lots of people's jobs. You know, manufacturing is a great place, great companies right now who are leading or digitizing manufacturing. One of the first things they dealt with is that plants have are like kingdoms, They the person who runs the plant, they got to decide. So suddenly having someone come in and say, techno is going to change and you're not going to have a choice. It's a huge change. Using a time like this, right where you want to be investing to win, where you've got cost pressures more ceos that I'm talking about. I'm not talking about cutting back. They're talking about now is the time. I could not agree more with that. And I have heard you say a number of times that the gap between the leaders and the laggers is widening. It sounds like at a time like this, there's the potential for it to get even wider. It is, although the shift, I think that's happened over the pandemic and and I think that's what Michelle is gonna talk to is you have more companies who are saying we want to leapfrog and who and, and and and that is driving. We certainly driving our business. We had 100 clients last year who did $100 million of bookings or more on a quarter with us as compared to 72 the year before. In the face of all that uncertainty. Why? Because that's a proxy. It's yes, of course, it's good about our results, but it's a proxy for the ambition and level of change that is happening even as those same companies are seeing the interesting Michelle. You have an extra fun pressure which is activists in your stock. I mean, you had one group that you dealt with now, you have a new groups calling for you and your chairman both to resign. You, you the the pace of transformation is so fast and then when you have this added issue on the side, how do you deal with it? Well, first and foremost, you gotta stay focused on the business and your team. Um, I engage with all of our shareholders. I engage with the activists always open to ideas that can drive long term shareholder value. Um, I feel very confident our strategy. I just building on what you said. I mean, we're navigating the here and now the pressures that we are feeling, especially in our customer segment. At the same time, we're spending hundreds of millions of dollars to roll out before because that is our future. And so, you know, we're in it to drive shareholder value for everyone and you know, that don't be distracted totally. One last thing I have to do before we let people go to law lunch, uh, julie, I happen to know today is your birthday. It's a big one. It's a big one. And so I think before you get your lunch, you should all sing. Happy birthday to julie. Happy birthday to you. Happy birthday to you. Happy birthday, Dear julie. Happy birthday to you. Thank you. Thank you. Thank you. Thank you.