First Thing I Would Do If I Were a Retail CEO
Commentary by Dan Gilmore, Editor,
Supply Chain Digest
I am obviously not a
retail CEO. While I know the retail supply chain pretty well, I don’t know
much at all about store operations principles and strategies.
But I have many years
in the business trenches overall, and have become, partly out of professional
interest, an observant consumer as I head to the store.
One thing that drives
me crazy: store managers sitting in their offices while troubles, lines,
and other sales-preventing developments are occurring just a few feet away.
It is getting worse.
Some recent personal
shopping examples:
At one of the large office
products chains, where service overall has become a bit better as a group
from the horrible levels of a few years ago, I see the manager consistently
in the office even as lines pile up, and customers have strange returns
or other issues that staff members seem unable to deal with and which exacerbate
the wait problem.
Last week, the manager
at the store I most frequent could be seen talking to a floor associate
as all this was going on, either oblivious or unconcerned about what was
actually happening to customers in the store.
Another example: I frequent
a specific chain of convenience stores to get a drink during the day, stores
with increasingly large scale formats, including hot food, etc.
Again, the lines can
get deep, especially when either there is some problem (e.g., the corporate
gas card isn’t being accepted, and again frequently the person at the register
seems to have no clue what to do except say, “It’s not working”) or someone
is buying dozens of lottery tickets, etc.
Is the manager ever to
be found? Rarely. They are in the back somewhere. Often, there are several
other employees around, tending to food, doing this, that or the other
– anything but serving customers directly.
The
proximate cause of the problem? I believe it is all the reporting
required by store managers. So, to make corporate operations and/or financial
people happy, they spend most of the day filing reports of what happened,
what’s going to happen, or analyzing all the metrics a store can throw
off. They come to believe that is their job, not serving customers. Retail
store managers are spending most of their day at a computer.
So, getting to the main
point, if I were a retail CEO, I would make it clear that job number one
is serving customers. If there is a long back up, you get your rear end
out of the back office and either start serving customers yourself, or
start directing others to do so and helping solve the problems the staff
is incapable of handling or is painfully slow in doing.
If I came into your store
and found you in the back office while trouble was brewing at the front
of the store, you’d be looking for a job at a competitor the next day
– and I would be pleased if they would take you.
You would think “Management
by Walking Around” would be a no-brainer at retail
– but increasingly to me it is simply not.
Discussion Questions:
Do you likewise find store managers are often too remote to address common
customer complaints such as long lines and POS problems? To what degree
do you think required reporting by corporate is misguidedly pulling managers
away from the selling floor?
Yes, it’s important for the retail chain’s CEO to signal to store managers that the customer experience is job #1. This entails not only a smooth checkout process but also merchandise handling–so that shelves are kept full and neat, and the store as a whole easy to navigate. But it’s one thing to send this type of message, another entirely to make sure the store manager has the tools to accomplish these tasks.
With proper investment in IS tools (such as automated scheduling of payroll and freight handling), the store manager should spend less time in front of the computer screen and more time on the selling floor. It’s important for the CEO and operations executives to make unplanned store visits so these mandates aren’t just lip service but are actually being executed as part of the company’s culture.
Many moons ago when I was managing stores, I would make it a habit of trying to be on the sales floor as much as possible. I agree that nowadays, store managers are responsible for a lot of back office tasks. Not only in reporting, many chains require management to do purchasing, health and safety audits, employee evaluations, payroll, scheduling and a whole plethora of other non-service related tasks.
What separates a well-organized manager from the rest is being able to balance. I advise my clients to put high importance on presence on the selling floor. While I was working in the field, I would try to do as much work as possible on the floor. If my work required a computer or terminal, I would hole up at the customer service counter. You will probably find that stores that have back office managers usually score poorly in customer service. This is where leadership can improve that situation.
I do agree that managers do need to be on the floor especially during peak times. It is wise to make sure that all managers are cash trained. This goes back to the leadership thing I mentioned before.
Were that it would be possible, envision retail chains being managed and led by RetailWire panelists and contributors. Would today’s subject then not even arise? That raises a question: Where do today’s retail managers come from?
I agree wholeheartedly that customers need to see the manager on the floor, especially when things get backed up and there are problems to solve.
But to the point that the practice can create a culture of dependence on the manager to solve problems, I wonder if an astute manager could facilitate a solution process almost as fast as s/he could step in and do it for the employee. Then, perhaps, the problem in question would have a better chance of solving itself next time.
And the manager could go back to being a goodwill ambassador to customers at large, with one eye out for the next bottleneck (disguised as a teachable moment for the employee involved) and another for ways to improve the customer experience overall.
“So, getting to the main point, if I were a retail CEO, I would make it clear that job number one is serving customers.”
You forget to mention whether you are going to adjust the manager’s work responsibilities so he can be out on the floor being gracious and welcoming to customers, which I would bet is exactly what he WANTS to be doing.
Retail executives can’t tell their store managers to focus on the customer and then keep dumping administrative, stock-keeping, and even cleaning duties on them. And then scratch their heads and wonder why bright young kids don’t see a career path in retailing.
The best lesson I ever learned from one of my regional managers was that “a 12 ounce glass only holds 12 ounces of water. Don’t punish the glass when water starts to spill over, punish who’s holding the pitcher.”
Looking at the design of the larger grocery stores and supercenters, it’s interesting how many put the managers office as far away as possible from the service desk. True, close to the loading docks and warehousing areas, makes it easier to oversee these operations and talk to vendors, but far away form the customers.
Store managers have responsibility for a multi-million dollar business in many locations, with all the associated system, personnel and management tasks on their plates as well. Not surprisingly, it is difficult for many store managers find the time to talk with customers–and will be another big factor in sales performance.
Sadly, I see more comments about negative store experiences on my shopping website, and many of them are tied to lack of training on the part of the cashier. Store managers are no where to be found when customer service issues arise.
I posted a question about Kmart on my site because I am oddly fascinated with its attempt at a retail comeback. And the question I asked was what advice they could give Kmart. The number one response was “TRAIN YOUR CASHIERS.” They are busy trying to create or promote frugal living promotions and no one knows how to run them and the manager is no where to be found. So while it’s getting people through the door, it’s also sending them running for the hills once they get inside.
If you want someone to do paperwork–hire it out! Spend the money on a manager whose sole focus is pushing paper and let the store manager get out there and do his/her job. Particularly in this economy where there are sure to be some pretty decisive winners and losers at the end of 2009, now’s the time to get in there and sell yourself to your customer. They have choices–and while they are going to pick stores where they can save, clearly, from my non-statistical straw poll of my members, service and training trump bargains.
I would bet any money that if you studied the amount of time an average retail store manager spends at their computer now versus a decade ago, you would see a dramatic increase today.
I agree that the CEO may not even realize the burdens his or her staff are placing on the manager for reporting, looking at store metrics and comparisons, etc, which is responsible for much of what is keeping them behind the desk.
There is a similar analogy with CRM and “sales force automation” systems for field sales reps in any industry. These can take on a life of their own, with marketing and the CEO wanting more and more information about what is happening in the field, to the point where the sales reps almost spend more time entering data than selling.
There are some exceptions–Trader Joe’s is a great one, as cited above. I think there it is a combination of culture and how the manager’s office is situated–open walls, right in the front. If every retailer did that, the situation would change over night.
It’s easy for a manager in any area to lose focus on what they really need to be doing, and get lost in the data side of things. Which is why “management by walking around” has become something of a lost art in retail and in business generally.
If a store manager has to be on the selling floor, the staff has not been trained well. A retail store needs to empower the staff. (More than 3 people in line, open another lane…customer complaint about hot coffee, give it to him free, etc.) The key word in the question is common customer complaints. If the manager is the “doer” he/she creates an atmosphere of no one does nothing without the manager approval which in most common retail stores causes major bottlenecks.
I don’t think required reporting pulls managers away as much as poor management selection. If it does, the retailer has many problems. Much of the reporting should be done with metrics, and electronically to avoid the old data entry and labor-intensive reporting mechanisms.
Earlier this year, I had occasion to contact retail CIOs and ask them who their chief customer officer was. Most of them laughed and said “Yeah, right. That’s something we need to address.”
Every retail company has chiefs of finance, merchandising, supply chain, and IT. Why in the world don’t they have someone whose job it is to maximize the customer experience?
With pressures on payroll and lagging sales, you would think that a manager would be on the sales floor. I’ve seen it both ways. Big box retailers seem to be less hands-on and log more chair time in their offices. Smaller box stores don’t have the payroll to afford that luxury. If you have hands and feet and a voice, you should be on the sales floor helping customers–in my humble opinion, of course.
Amen to what’s throughout this thread. This is such a common and serious problem, touching such a nerve, that I predict a record or near-record for number of responses on this one. Rick, George, what’s the record so far, anyway?
There is an “Iron Law” in retailing – Bad Systems defeat Good People, Everytime.
That’s systems “Big S”, not just (or even primarily) computer based systems (which, thus far, this thread seems to suggest is a root cause).
As a Store Ops guy several times over you tell me who is the better Store Manager, the person who is always “jumping in
” on the front end to solve problems or the person who says “Why is there a need to constantly jump in on the Front End and what can I and the rest of the folks do about eliminating the root cause(s) for these frequently recurring busts and then goes and does whatever it takes to get the problem resolved – permanently” ?
I happened to focus in on the Front End. However, it could be any number of areas of the store.
If the Store Manager is (re)solving the same problem, over and over, he’s not doing anyone a favor.
In a similar vein, for all you HQ types who work outside the four walls of the store if you want the store folks to spend less time doing ‘stuff’ so they have more time to interact with customers then give the store folks less (of your) stuff to do.
What I like and really expect each time I shop at my local A&P/SuperFresh is to visually see either the front end manager at his/her stand in front of the store or the store manager working the customer service counter.
I know that I can address to either one any problems, stockouts, assistance at the service deli, seafood counter, fresh meat or bakery that I would encounter during my shopping visit.
The manager is the face for the store. When I step through the door during each visit, I want to find a clean, well stocked store, which I usually find, since the manager is out there stocking or walking the store. I want to feel like “company”, just the way I would treat visitors in my own home. And in return, I make sure that I return the grocery cart to the cart area or under the canopy, put used circulars in the trash, and never block a parking space with an abandoned shopping cart.
In my humble opinion, no group of individuals in the retail consumer products industry faces more difficult, multi-dimensional daily challenges than store managers. Between the personnel management issues and the requirements handed down from above, it takes a real talent to juggle all the spinning plates.
I learned recently that some supercenter store managers receive in excess of 1,400 business-related emails a day, most marked “urgent”. Do the math: if a manager spends just 15 seconds reading and acting on each one, that adds up to six hours a day at the computer.
In that context, attempting to engineer store manager behavior solely through incentive pay borders on cruelty. I’m all for alignment of interests, but it’s also the retail management’s responsibility to empower managers with business practices and tools that can help ensure store-level success.
Most retailers do an abominable job of making store management an attractive career track for bright, educated young people. They don’t recruit or promote enough on college campuses. Worse yet, a lifetime of shopping experiences are a turn-off to business majors. If chains want to get store management right, they had best work on ways to make store management a respected and desirable career.
These observations are all too true. Yes, in some cases it’s the paperwork that’s become the master. Sometimes it’s just misplaced priorities. Consider these 6 keys that need to be in place to get better performance, and you’ll probably find a reason or two why those managers are in the back room instead of on the sales floor:
1. Focus … are they clear on expectations?
2. Measurement … is anyone actually measuring their personal performance?
3. Accountability … does it really matter that they spend time on the floor, or can they get away with it?
4. Training/Coaching … do they actually have the skills needed to be a manager?
5. Support … does the organization give the manager the right support (# of staff hours, proper reporting, etc.) to do the job right?
6. Celebration … is it worth while for the manager to get on the floor?
We know that when all 6 keys are in place you get better performance. Miss out on just one of them and you get, well, a manager sitting in the office.
The absolute best place not just for store managers but the rest of the retail management team is on the floor. Paramount is the opportunity to help drive sales though customer service but there are also several other key reasons including:
– merchandising
– observing and developing other store managers and selling associates
– identifying operational problems or opportunities;
As a store-level manager for Macy’s in the mid-80s (both pre- and post-LBO), it was imperative to spend most of the selling hours on the floor. This was as true for sales and group managers as it was for store managers, at least the good ones.
Most of the really great “lessons” from my store manager and group manager came on the selling floor. In turn we were able to develop associates in the same way. Last, it was the only way to see how business was going in real time, through both observation and checking the POS terminals!
For the most part, I’ve seen store managers upfront interacting with consumers, solving problems and helping create a better shopping environment. At Staples, Ralph’s and Trader Joe’s, managers are easy to spot.
As Dan says, managers should focus on consumers and their needs. Corporate management needs to accept and reinforce this.
This is generally a problem I see with large sterile big box stores. Some of the best-run retailers are those where the manager situates himself near the checkout and is always accessible to customers. Generally, when the manager’s salary is 80% bonus, you will be sure to find him on the sales floor.
Aside from conducting in person audits–which are expensive–it is difficult for the retailer’s management to “know” if their store personnel are “on the floor.” The metrics for measuring performance are also cumbersome to identify–is it purely hours out of the office? Number of customers personally checked out? Customer satisfaction scores? Or other evaluations?
What can be measured–and is therefore substituted for true management and customer service at the store level–are the metrics that lead to the backroom or office work–tracking number of employees, number of widgets sold, amount of sales between hours X and hours Y, etc. It is a problem that can only be corrected by changing the requirements of the job, the training, the sourcing of candidates, etc. Seems so simple–but the execution has been difficult to pull off.
It was reported years ago that often the closer a person was to death the less time family and friends spent with that person. As retail (and most other businesses) approaches serious downturn, managers spend less time at the face of the problem–connecting with customers and employees.
I ran into this the other day, though not in retail. I was asked what managers needed to do right now. My reply was to get out and support employees, keep their vision alive, help them realize that there are infinite possibilities out there and failure/bankruptcy, etc. is just one of them. So is phenomenal prosperity. Keep their desired outcome as a unifying focus and intention for every employee. The response I got was that as managers “we don’t have time for all that.” So what the heck do they think “leadership” is if it’s not to keep the fire lit in the hearts, minds and spirits of their people? Sometimes we get what we deserve!
I think Dan is dead-on with his analysis. As a former retail manager with Dominick’s in the 70s and 80s, there was nothing that bothered me more than long lines, dirty front ends of the stores, and cashiers who were talking to one another. I made it a point to stand up front, facing all of the cashiers, thanking customers after they had paid for their groceries. By no means was I perfect, but it was just the right thing to do. I can tell you this, it doesn’t happen today.
Go to a Best Buy, and watch the lines grow long, while the manager is nowhere to be found. The same is true for an Office Depot, a Barnes & Noble, a Borders, and the list goes on. Compare that when you walk into an Apple store, and all of the colored shirts descend upon you. Some retailers do it right; most don’t get it.
And then they complain that their sales are down 11%.
This is such a no-brainer that it is hard to believe it still exists. Everyone from the CEO down needs to spend a percentage of their time on the sales floor where the business is actually interfacing with their customers. If top management spends time on the floor, you can be assured that lower management will as well. Far too many decisions are being made in the “ivory towers” that make no sense at all in the consumers’ minds. Any manager that isn’t in tune with the sales floor should be working on his resume.
As a consultant, I once had the opportunity to meet with the founder of one of the most respected c-store chains in the U.S. (one of very few in that industry with any emphasis on delivering a good customer experience). He was advising a foreign client of mine, who was considering the c-store business in his home country. When it came to store design, the founder’s advice was “build your store without an office.” Put the computer and all the reporting in the sales area in the middle of the store. That way, there’s nowhere for the manager to hide–he has to be with customers and associates. I’m sure that wouldn’t work in a bigger box, and it only solved part of the problem, but in a c-store it was a brilliant step.
This is an interesting discussion. But it would be an error to categorize this problem with such broad strokes. Depending on the retailer, the job of store manager is quite different. In some organizations the manager has an enormous number of tasks and reports they must attend to each day. While it would be great if some of these things could be assigned to others, keeping labor costs down is a major part of the manager’s job. For “on-the-floor” functions within their stores they have assistants.
In other retail organizations managers spend nearly all of their time on the floor overseeing the activities and people within the store.
The one thing everyone here must understand is that managing a high volume retail store is very hard work. Most of the managers I know work a staggering number of hours and do so because they love the work. While the store manager’s job has changed over the years, the responsibilities have only increased.
If you have not done so, I encourage you to spend some talking with some store managers. I believe you will find them to be hard working, dedicated people who are enthusiastic about their jobs and the companies they work for.
An observation—–often managers and assistant managers who have been recently promoted from within, up through the ranks, can be the worst culprits. Now that they are managers they want to be seen as “more” than sales help both to customers and to their previous peers. In order to demonstrate that elevated position they frequently assiduously avoid the sales floor. Or, if they’re on the floor and are approached with a question from a customer they will often demur and offer to find them “a salesperson”.
With the historically low pay in retail the prestige of being a manager is often psychologically very important to an individual and they look to cement that recognition however possible. This important issue must be discussed honestly when deserving people are being promoted. The expectation and insistence by upper management that they will be out on the floor and leading and serving by excellent example must be made part of the deal with new managers from the very beginning. CEOs must assure this discussion is actually happening and not merely assume that it is.
The question of where the manager should spend time is as simple as asking if a football coach should spend the “game” in the locker room or on the field.
It is far easier to find people with the talent to fill out reports than to find people with the talent to run the plays. This is why quarterbacks make more than the trainers.
In over 30 years of participating in the field, there is no question that the most successful stores are where the managers [General, Assistants, floor supervisors] have a commitment to a flawless customer experience which translates to spending the big majority of time of the floor.
This has to be the most complex issue in the entire world. Every single reply offers a logical response and all agree that store management belongs on the floor with employees and customers. So what’s the problem? Could it be that store managers aren’t allowed to do a job that is basically quite obvious?
I would submit to you that store managers aren’t trained or are the personification of the Peter principal. Surely upper management is not the problem! The gurus at headquarters couldn’t possibly make a mistake, could they? Folks, the truth of the matter is that store managers spend all their time trying to straighten out mistakes that end up at their store because it is the last link on the supply chain. Everything that can go wrong often does and it ends up in the store manager’s lap and headquarters depends on the store manager to fix every problem created by personnel, operations, buying, warehousing and shipping.
In addition, the store manager has to deal with a slew of self absorbed [consumers] who wander about the store talking on cell phones (I don’t really need this cottage cheese so I’ll leave it here with the Peanut Butter), clogging up the isles because they have poor buggy discipline (headquarters assures me two buggies can pass with 1.5 inches to spare).
The problem isn’t in the store, that is just where it shows up. The problem is the end product of a system that is built upside down. No one up the ladder is judged by those down the ladder and as a result when the problem shows up it is merely a symptom and while frequently addressed, is never cured.
There have been a couple of articles in the Wall Street Journal in the last months talking about Meijer and Ann Taylor Stores using software to apply standard times to the time Sales Associates spend with customers, and to the time Check Out Cashiers take to process customer orders. Associates are required to meet these times or eventually be moved out of their positions.
Not flattering articles, they talk about how shaving seconds off the transaction times translates to thousands of dollars in direct labor savings. Looking simply at transactions with customers as a direct labor expense only, and apparently not considering all the other values these positions are contributing, and potentially can contribute to the business.
One can only hope there is a lot more thought being applied than the articles would imply.
Of course it’s a struggle managing large groups of people like a large store checkout operation and maintaining and raising productivity (particularly since there is no natural machine-based heartbeat system to pace activities).
But which managers are the most effective? Those who mostly sit in their offices analyzing data? Or those who mostly spend time on the floor actually observing what’s going on, talking to people, really assessing the value of an individual’s contributions, and determining where they need help. Make no mistake; the data is very useful, but it’s always secondary information.
Hire the right people, train them effectively and follow-up with consistent coaching. The Store Manager has many hats to wear all important at any given time. To monitor, mentor and lead by example on the sales floor is mission critical. Time management and planning must be trained into the leaders’ DNA. After spending two decades leading, coaching and building specialty retail stores, our focus was ensuring that customers were getting the best service delivery by highly training sales associates. This was not executed in the back room reviewing the numbers or fielding merchandise replenishment requests.
Store managers are only as good as their staff. Most retail CEOs of nonunion stores excuse their high staff turnover as “typical for retailing” . The stores with the lowest turnover have the least-stressed managers because folks know their jobs. Experienced people don’t need to be micromanaged. And it’s exhausting to be a micromanager.
A store manager’s time is divided between running the business and serving the customer. However, it is easy to identify your busy times and work around these accordingly, thereby offering service and productivity. Retailers have area managers; what are these guys doing? If a store manager is not motivated by profit enough, they are going to spend a large part of their day in the office. If they can make a difference to their salary then they will spend the time on the floor. What do retailers want, someone who can open and lock the store or someone who can run the store? Money talks.
Store Managers should have a constant view over the infrastructure of a retail store. They should monitor problem areas and quickly find solutions, if not to at least bring it to the notice of a higher authority. The staff at the back end will force Store Mangers to prepare reports at the earliest, so they can finish their work early and sit idle. This might be the reason keeping store managers away from the front.