Katie Finnegan yesterday announced on LinkedIn that she plans to resign from Walmart and specifically from both her roles as founding principal with Store No8 and as CEO of Spatial&. Having followed Finnegan and the Walmart PR machine closely over the past few years, at first this news was perplexing, but upon reflection it actually may not be that surprising at all because “innovation” is so much more difficult to do in practice than it is to say with air quotes.
Experimentation is not the same thing as innovation. It is easy to experiment, but it is hard to innovate, which is why Finnegan’s resignation yesterday is so intriguing and why, no matter what the true impetus for Finnegan’s departure was, it is time for Walmart to take stock of its efforts and to ask itself some difficult questions about how it plans to ready itself for 21st-century retailing.
One of the running jokes that people within the innovation space have around corporate innovation programs goes something like this: “Sure, those ping-pong tables and nap pods look really cool right now, when everything is fresh and new and there are no clearly defined deliverables, but what will they all look like in a few years when the company decides to shut the entire innovation team down?”
The basic gist of the joke is that sometimes companies get carried away. They get excited about trying new things, they might buy or invest in a few cool companies, they might hire some cool people to run them, and, yes, they may even buildout an entire “innovation” space, replete with ping-pong tables, nap pods, and the latest and greatest microbrews on tap.
But, at some point, it always comes time to pay the piper and to prove out the return on investment of such efforts.
Could this be what is about to happen at Walmart?
Evidence suggests it is at least worth asking the question.
Case in point: Katie Finnegan was the founder of Store No8. Store No8, according to its own website, was started in 2017 (yes, barely two years ago) and is the self-proclaimed “incubation arm of Walmart.” Scroll further down the website, and you will also learn that Store No8 “exists to incubate companies that are developing the next generation capabilities” that Walmart believes “have the potential to transform retail.”
In an interview with Cheddar, way, way back in January 2018 (yes, that is sarcasm), Finnegan herself even mentioned that Store No8’s goal was to pursue incubation activity that will have an impact on as far out as a “10 year” time horizon.
But really? A 10-year horizon? If so, then why leave after two years? The work has barely gotten off the ground.
When asked to comment on Finnegan’s departure, Walmart declined to offer any further information other than to confirm her departure and her final employment date of June 7, 2019.
Well, Rome wasn’t built in a day either. And, neither is an innovation portfolio, but two years is a pretty quick tenure and especially so, if any of the planed Store No8 initiatives truly had the capability of lighting the retail world on fire or if any of them were on the brink of bringing Finnegan a huge financial windfall.
So, let’s look deeper at the evidence. Is the portfolio well-positioned or is Finnegan smart to get out now?
To date, there are five publicly known or, maybe better said, fancifully discussed activities surrounding Store No8.
The first is Jetblack. Jetblack is Walmart’s experiment with personal shopping over text messaging for the upper crust of Manhattan. As not to lead you astray with any undue bias, you are probably best left to decide the merits of this initiative for yourself, so here is a recent podcast with Jetblack’s CEO Jenny Fleiss, as well as a previously penned critique of the concept: Four Troubling Concerns About Walmart’s New JetBlack Service. One word of caution—base your assessment of Jetblack on the sum total of the arguments presented and don’t let the New York slick of the former sway your judgment, no matter how Anderson Cooper-like the podcast interviewer sounds.
The second is Spatial&. Spatial&, aside from its deft spelling, is Walmart’s attempt to build immersive experiences that tap into the emotional power of VR. Spatial& burst onto the scene via a VR gala in Beverly Hills, made a recent appearance in Walmart parking lots for the release of How to Train Your Dragon: The Hidden World, and also, interestingly enough, until yesterday, was run by Finnegan herself as CEO.
The third is LOCAL Theory, of which little is known, except that, according to a Walmart spokesperson, it is in “stealth” mode and “focused on the application of Artificial Intelligence/Machine Learning for localized merchandising.” Or, said another way, it is already a veritable trade show’s worth of buzzword soup.
The fourth and fifth initiatives are Project Franklin and Project Kepler, both of which there is also little known about at this point in time, and Kepler doesn’t even show up on the Store No8 website. I asked Walmart to comment on both, but Walmart did not provide any further information by the time of publication.
The running thread through all of the initiatives above is, yes, one can make the argument that they are each in some way related to retail, but are they actually related to the core flywheel of how Walmart makes money?
The last point is a stretch. The difference between these initiatives and Amazon’s approach is that Amazon’s initiatives ladder back to its flywheel. Everything ties back to Amazon’s promise of low prices, selection and convenience. Amazon’s experiments feed a virtuous cycle. They are not standalone ideas. Even if the above concepts do have legs, it is hard to see how they augment Walmart’s core business vs. just standing alone as random successes.
Store No8, in contrast, reads like nothing more than a venture capital arm of Walmart that is betting on the come-out roll of popular opinion. And it is an arm that after less than two years, one of the founders (Finnegan) moved out of her leadership role to lead one of the incubation companies (also weird) and then quickly left that endeavor in a hot minute as well.
Walmart’s brand promise is Save Money. Live Better. That is Walmart’s swim lane. Digital flights of fancy are just that if they are left unchained and to operate outside the core of who Walmart’s customers are and what they need from the retailer. Voice, messaging, and the always favorite threesome of VR, AI and ML (the veritable trifecta of retail gobbledygook) may sound glossy and cool for PR releases, but unless you know how these ideas translate from $50 a month services for people living in Manhattan apartments with doormen (i.e. Jetblack), they are nothing more now than sound and fury signifying nothing in the long run.
So, the hope, the sincerest hope, in light of Finnegan’s resignation announcement yesterday, is that Walmart will pause and ask itself some hard questions about the intent of its Store No8 initiative. Now is the time for Walmart to be honest with itself and to manage the work better. Long-term strength will come not from the above, but from more focused innovation efforts, like the wonderful work Walmart presented on omnichannel fulfillment at Shoptalk, and from ensuring that the leaders of said initiatives don’t exit through stage left before Act I is even over.
As sweet and as seductive as the siren song of experimentation may be, it is important that Walmart stay focused on the needle moving plays, not the niche one-off business ideas that are a long shot down the road. It is discretion, not delusion, that is the better part of valor, lest Finnegan’s resignation become the first sign of Walmart’s very own ping-pong tables becoming further punchline fuel to the running joke of corporate retail innovation hubs left unchecked.
This article originally appeared on Forbes