Rich McMahon Discusses Why Most Retail Transformations Stall | Lessons From Building a $1.5B Digital Business

Rich McMahon spent nearly two decades inside Bed Bath & Beyond as it grew into a multi-brand retailer exceeding $12 billion in revenue across North America. He joined as the company’s first Chief Information Officer, launched its eCommerce, omni-channel, and mobile businesses, growing them past $1.5 billion in annual sales. From there, he led the global supply chain, served as Chief Strategy Officer, launched the company’s international businesses, drove and integrated multiple acquisitions, and led the company’s institutional division as its CEO.

He left in 2015. What happened to the company in the years after, its decline and eventual bankruptcy, is, he says, the clearest case study he knows of the failure he now helps companies avoid. “The growth years taught me how to scale. The years that followed taught me what scale can’t protect you from.” As founder of cda Ventures LLC, McMahon advises CEOs, boards, and investment groups across the retail, consumer, and consumer technology sectors, and that distinction sits at the center of the work.

Most “Transformations” Are Just Re-Platforming

McMahon is blunt about why so much transformation spending produces so little change. “Most transformations I see today aren’t transformations. They’re re-platforming with a bigger budget,” he says. “True transformation only happens if the operating model changes: how decisions get made, how work gets done, and whether the customer experience becomes measurably different.”

The technology, in his experience, is rarely the binding constraint. Alignment is. “If your transformation leader can’t tell you specifically which internal fights they’re prepared to take on to get the customer outcome, they’re never going to deliver alignment,” he says.

The Question Most Leadership Teams Stop Answering

The deeper failure is quieter. As companies add marketplaces, SKUs, platforms, and automation layers, the original reason customers chose them gets diluted one decision at a time. “Almost every stalled transformation I’ve seen comes from a leadership team that lost the answer to what the company is actually for,” McMahon says.

He’s deliberate about framing his former employer’s trajectory as a pattern, not a verdict on anyone. “I’m not interested in relitigating anyone’s decisions. I wasn’t in the building for them,” he says. “But from the outside, it looked like an organization that kept optimizing the parts and lost the whole. The customer promise that built the company got chipped away in the name of margin improvements and efficiency, and once that’s gone, no platform brings it back.” It’s why he treats the customer promise as the first thing to protect in an engagement, not the last.

The Gap Between the Narrative and the Floor

McMahon’s method starts below the executive suite. In his first 60 days inside an organization, he walks stores, distribution centers, and contact centers, and talks with employees several layers beneath senior leadership. “The gap between the executive narrative and the operational reality is where the real work is,” he says.

He points to the multi-year effort to launch buy-online-pickup-in-store as the experience that shaped his approach. The technology was solvable; the standoff wasn’t. Store leaders feared inventory inaccuracy and disappointed customers. Digital teams feared conversion friction. Each side optimized for its own P&L. “The failure was that I couldn’t frame it as a shared customer initiative,” he says. The breakthrough came from reframing the program around a single measure both sides owned – fulfilling more customer orders, more reliably. “Once it was one number both teams were measured on, the fights stopped being territorial,” he says. The capability went from stalled for years to one of the company’s most-used omnichannel services.

That, he says, is the work he sells now. “I get hired when the strategy is clear and the execution is stuck. That’s almost always an alignment problem wearing a technology costume.”

Where the Next Disruption Actually Lands

McMahon is wary of how the industry is framing AI and agentic commerce. The common worry – how to optimize for AI-driven search and discovery, is, in his view, the wrong altitude. “Everyone’s asking how to get found by the agent. The harder question is what’s left to differentiate when the agent is making the choice,” he says. If buying agents commoditize the front end, the retailers that win won’t be the ones with the most efficient digital marketing; they’ll be the ones whose operations create something a model can’t easily replicate.

“Companies that flattened themselves chasing efficiency are going to find they don’t have much left to differentiate when the front end gets commoditized,” he says. The mandate he presses on CEOs predates AI: stop running digital and stores as separate P&Ls, because customers stopped shopping in channels a long time ago.

Transformation as a Discipline, Not a Project

For McMahon, the thread running from the growth years through the collapse to the work he does now is a single idea – the companies that endure treat transformation as an operating discipline, not a technology project. “Enterprise growth and digital transformation aren’t different problems. They’re the same problem at different altitudes,” he says. The organizations that win the next cycle, in his view, will be the ones that stay connected to the customer when every incentive pushes them toward efficiency for its own sake.

“Scale will expose whatever you haven’t decided,” he says. “The work is deciding, and then holding the line.”

Follow Rich McMahon on LinkedIn or visit his website for more insights.