Case Two: Nordstrom’s Innovation Efforts Recognize the Importance of the Soft Side of Implementing Change Based in Seattle, Washington, Nordstrom Inc. is an upscale department store chain that operates more than 300 stores across the United States and Canada. The company got its start in 1901 as a small shoe store in downtown Seattle, and it has since grown into a well-regarded fashion specialty chain with net sales of more than $13.1 billion in 2014. Nordstrom has built a loyal customer following through its quality products and its almost legendary customer service. The company prides itself on its culture, which supports and empowers employees, and for the last decade, the company has consistently been named one of Fortune magazine’s “100 Best Companies to Work For.” In keeping with its commitment to quality, Nordstrom has invested heavily in innovation throughout its organization—by embracing omni-channel retailing strategies that allow customers to make purchases in the store, online, and via mobile devices, and through its approach to developing and supporting the variety of information systems that fuel the company’s growth. For instance, Nordstrom looked for innovative solutions to help it revamp its approach to developing mobile apps after a detailed analysis of internal processes determined that its typical development cycle for updating customer mobile apps was 22 to 28 weeks—far too long to keep the company competitive in the rapidly changing mobile marketplace. The project was successful (cutting development cycles down to 30 days or less) because the company took the time to thoroughly map all of the processes—and then shared that detail with employees and other stakeholders. Through that process it became clear to everyone involved how much change was needed in order for the company to stay competitive on the digital front. In addition, having every step mapped out showed each individual team how it needed to change. According to Courtney Kissler, Nordstrom’s vice president of e-commerce and store technologies, the process analysis work that Nordstrom performed at the start of the project provided the data that helped build momentum for change within the organization. Kissler’s advice to other teams looking to make such a transformation is, “Make the conversation as much about data as possible and not about emotion. A lot of the skeptics come around once they see [the data].” In another effort to strengthen its innovation practices, the retailer recently made changes to its “Innovation Lab,” which it established in 2010 to focus on jumpstarting technology projects. Over time, the company came to realize that those efforts needed to be better integrated into the business groups in order to spur collaboration between the technology innovators and other Nordstrom employees—and encourage acceptance of new initiatives. Therefore, the company moved most of its technologists out of its central lab and into the different business groups so they could work more closely with end users, especially those who work directly with customers. This approach “works better because we have a broader intake of new ideas from both business and technology teams,” according to Nordstrom CIO Dan Little. These changes in the way Nordstrom is innovating and providing the information systems that support its core business mean that Nordstrom employees—both on the technical and the business side—need to learn new ways of working with technology and the development process. However, the changes also mean that new innovations have a higher chance of adoption and acceptance because end users are more connected to the innovation process. Keeping an organization as large as Nordstrom competitive and innovative requires all employees to embrace change. And for Nordstrom, its focus on the soft side of implementing change is paying off. Nordstrom has been able to build on its organizational culture to encourage innovation and acceptance of change. As Sam Hogenson, vice president of technology at Nordstrom, puts it, “If you don’t pay attention to culture, everything is really hard to do. But if you do, everything else works.” 1. What resistance from the business units might have inhibited the movement of technology innovators into business groups? What strategies or actions could management have taken to reduce this resistance?