Macy’s CEO Seeks to Avoid Ivory Tower Syndrome

Discussion
Apr 14, 2009

By George Anderson

Macy’s CEO Terry Lundgren doesn’t want to
lose touch with what’s going on in his business and the best way for him
to achieve that is to spend as much time as possible in the company’s stores.

"It’s
just a good experience," Mr. Lundgren told The New York Times. "I
learn as much by going through a store as anything I do, much more than
sitting in my office at my computer or holding a big meeting here, because
I’m learning and seeing exactly what our customer is seeing."

According
to Mr. Lundgren, he is out in the field two or three days a week. "I
just go and pop into a store. I have the cell phone number of every store
manager, and I call them and 95 percent of the time they’re there. And
they have a little small heart attack at first and I pick ’em up
off the floor… So we walk through the floor, and they have had no time
to prepare for my questions, they’ve had no time to prepare the store."

"Ultimately,
they (managers) view it as a good experience," Mr. Lundgren told the Times. "If
I have my issues or concerns or my complaints, I generally don’t take it
out on that store manager. I would take it back to management, you know,
about what we’re doing to the store to not make it as good a shopping experience
as it needs to be."

Being
accessible is difficult in an organization with 170,000 people, but Mr.
Lundgren has added monthly 30-minute webcasts to
his store visits to avoid being isolated from the company’s employees.

"When
I do these webcasts, I say: ‘I’ll find 30 minutes every single month
to talk to you guys. But here’s my plan, I’ll speak for 15 minutes about
current events, what’s the most important things that are happening that
you need to know about, and then I’m going to take your questions for the
next 15. And you just e-mail me your questions, and Ill give you an instant
response.’ And I always get more than I have time to answer."

Discussion Questions: How important is it
for top executives to spend time in stores? Are there common mistakes
that headquarters executives make when visiting stores? What other ways
can management be sure it stays in touch with employees and customers?

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35 Comments on "Macy’s CEO Seeks to Avoid Ivory Tower Syndrome"


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Charlie Moro
Guest
Charlie Moro
13 years 1 month ago

This should be a model for all businesses that truly aspire to be customer focused. I have spent a lot of time with senior management visiting stores that had days and weeks notice of our arrival. You seem to never get a true sense of what is happening and what you really can do to help and focus the organization to grow.

Ron Margulis
Guest
13 years 1 month ago

In my book, job one for any retail executive should be in the stores. All headquarters staff, executive, director and manager level, should get out to the stores frequently, even (or maybe especially) the accountants and legal team. Merchandisers should basically work in the stores. The only way the supply chain folks can improve the way product is received at retail is to be at retail. One of my clients uses the mantra buy what you sell, don’t sell what you buy. Well, you really can’t know what’s selling and how it’s selling just looking at a computer screen.

Max Goldberg
Guest
13 years 1 month ago

This is just common sense. How can someone run a chain of retail stores and not visit the stores regularly? Kudos to Mr. Lundgren for arriving unannounced and experiencing the store the way a consumer does. I wonder if he makes a purchase in each store before calling the store manager? That would be valuable as well.

In any business, not just retail, management needs to stay in touch with the business by regularly being “on the floor.”

Dick Seesel
Guest
13 years 1 month ago
There is no better way for a retailer to learn than to shop his or her own stores. The trick is for a high-level executive to see the store experience through the eyes of the customer, even though the “unvarnished truth” might not be attractive. Decisions made at corporate headquarters about content, staffing and presentation are done in a vacuum unless somebody inspects the consequences. Mr. Lundgren might be considered “old school” in his approach, but he is 100% right. Unannounced visits, such as the ones Mr. Lundgren describes in the interview, are more likely to be revealing than “state occasion” tours, where the store management has had a chance to spruce things up, beef up the staffing (for a day) and prepare a bunch of reports. It’s important for big and increasingly centralized companies like Macy’s to instill the culture of “inspect what you expect” throughout the headquarters organization. There are many people at the start of their retail careers who are moving through the planning and buying ranks, without the “real world” grounding… Read more »
David Biernbaum
Guest
13 years 1 month ago

Unfortunately, the executive walk-through is usually symbolic on all sides. First and most important, executives really need to WANT to truly know what employees and customers are thinking, doing, and carrying on. If the interest is truly real and sincere, and if the executives believe that knowledge and sharing will improve their business, then they will find countless ways to “find out.” This goal is not complicated at all. The truth is out there but many executives truly believe that all the answers are in the conference room. I’m sorry but that’s the reality, I have experienced a lot of conference rooms!

Doron Levy
Guest
Doron Levy
13 years 1 month ago

It’s all about presence and attitude in retail. Without the front lines, you have no business so it’s in everyone’s best interest to keep focused on the trenches. I love touring with execs at the store level. Some execs really know how to tour. I call these tours People Walks. You get out and talk to your people. Really simple but extremely effective. That’s how you find out the pulse of your company. Others, not so good. I could call some tours I have been on zombie walks. Any chain that works with an ivory tower deserves to fail. Plain and simple. This direction is a good one and Mr. Lundgren has a lot of ground to cover but Macy’s needs this right now. It’s a great brand with a lot of history behind it.

Kevin Graff
Guest
13 years 1 month ago

Right on! We continually rant in our newsletter and directly to our clients to ‘get out into the stores!’. It is shocking how little time head office staff actually spend in the stores. We always say, “you spend money at head office, you make it in the stores”.

If you’re running a company, do two things: Mandate time in the stores for everyone at head office, and then model it by doing it yourself.

Pradip V. Mehta, P.E.
Guest
Pradip V. Mehta, P.E.
13 years 1 month ago
The most common mistake senior executives visiting stores make is that they begin to micromanage some of the store display and layout. Once a store manager figures out what the visiting executive likes and dislikes, that store manager can fool the visiting executive. I know a company where stores would have displays in one way to please the visiting executive, and as soon as he’d leave, change the displays! Now, this is absolutely counterproductive! In my opinion, the best way for a senior executive to make store visits effective is to do it just like any customer. Go visit the store unannounced just by yourself, without any assistants in tow. Make notes of what you observe. If possible, even buy some merchandise which can be returned later on, so that you actually go through a “customer experience.” Then come back to your office and share your observations with the store manager and appropriate executives for explanation of what you found. Effective store visits conducted properly are the most effective method of keeping tabs on the… Read more »
Bob Phibbs
Guest
13 years 1 month ago

Classic case of a PR drive but true to Macy’s heritage. Back in 1866 founder RH Macy made sure reporters knew he promoted a saleswoman, Margaret Getchell, to store manager, making her the first woman to hold an executive post with a major American retailer.

But have any of you visited a Macy’s and found, “It’s just a good experience” as did Mr. Lundren? I’ve written about three and none were even average: one, two, three.

The legacy of Macy’s seems to be PR, not “a really good experience.”

Kenneth A. Grady
Guest
Kenneth A. Grady
13 years 1 month ago
Should retail execs visit stores frequently? If you asked the same question, but substitute the manufacturing environment for retail, everyone would think it a somewhat ludicrous question – of course leaders need to go where the action is for their companies. In lean manufacturing, you go a few steps farther. Why not have leaders regularly parked in stores rather than in offices? In this era when meetings can be held electronically (think web conferencing), is it really as necessary to have everyone sit in an ivory tower with some visits to the stores? Why not work in the stores on a routine basis, not just when you start or at the busiest time of the year? Sure, everyone has work to do but in retail much of that work involves the store and interaction with the customer and the best place to make it happen is in the stores. Terry Lundgren at Macy’s has taken a step in the right direction. Other retailers should pick up the pace.
Joel Warady
Guest
Joel Warady
13 years 1 month ago

The fact is, all CEOs should be visiting their stores, but I don’t necessarily suggest that they call ahead. To really get a complete understanding of the store and shopping experience, the CEO should show up and walk the store as a customer. They need to experience the store the exact same way that a customer would experience a store. They need to park their car in the parking lot, not have a driver drive them. They need to walk into the store and try and figure out where the different departments are located. The CEOs need to use the bathroom, and experience what the customers experience. Only then will CEOs really understand how and why people shop their stores, or for that matter, why they don’t.

The Macy’s CEO should give this a try, and see what he finds during his stealth tour.

George Anderson
Guest
George Anderson
13 years 1 month ago

It’s not mentioned in the Times article, but I’m wondering how many customers Mr. Lundgren speaks with on his store visits. I also wonder how many times he has gone shopping in his own stores on really busy days totally unannounced.

Marge Laney
Guest
13 years 1 month ago

Kudos to Mr. Lundgren for taking the time to visit his stores on a regular basis. My only hope is that he’s including the far flung stores and not just the ones in his corporate back yard. My experience has been that the farther away from the home office, the worse the execution of brand strategies and initiatives.

Popping into a store unannounced is the only way to go, however, I would encourage management to talk directly to customers on those visits as well. Customers have no dog in the race and will answer questions candidly from their point of view, which really is the only one that counts.

Gene Hoffman
Guest
Gene Hoffman
13 years 1 month ago

Where’s the company’s business, in the Tower or the Store?
Where should top official be during the day when consumers are visiting their house(s)? The questions dictate an answer.

But here’s a caution: when in a store, the CEO et al must remember that they, like customers, are guests in that store, not all-knowing preemptors.

Gene Detroyer
Guest
13 years 1 month ago

Good for Terry Lundgren. It is extremely important for top executives to spend time in the stores. But, don’t limit your interaction to the store manager. In fact, before you let the store manager know you are there, talk to the staff on the floor, talk to the shoppers, and try to purchase something. Those activities will be considerably more telling than even a surprise visit to the store manager.

And, don’t stop with the top executives. Buyers and planners should be doing the same thing. These important functions often exist in a higher ivory tower than the ones the c-level executives live in. It should be every bit as important for a buyer to be in the stores to talk to shoppers and see how their buying decisions are implemented as it is for them to do the fashion week routine.

Cathy Hotka
Guest
13 years 1 month ago

Kudos to Terry Lundgren.

I’m with David Biernbaum. These visits shouldn’t be for show. Among other things, he should make a shopping list before he enters the store, then try to find the items he wants to “buy.” One thing CEOs should examine for themselves is the significant out-of-stock problem that most of them have.

Dan Raftery
Guest
13 years 1 month ago

I agree with the general approval for senior exec visits to stores, but strongly reinforce the direct experience comments. The only ways to know what the shopping experience is, is to either experience it directly or indirectly. Talking to shoppers is a great way to know what they think. So is using secret shoppers, as long as they are guided by a well thought through set of objectives. Macy’s has a lot of stores. A one person sample is pretty small.

Carol Spieckerman
Guest
Carol Spieckerman
13 years 1 month ago

I’m a proponent of the anonymous drop-by, and to stores in outlying areas; however, visiting your own stores is one thing; it’s just as important to visit competitor’s stores (and to define competitor as “everyone”). At last year’s Global Retailing Conference, which is sponsored by Mr. Lundgren’s namesake retail studies program, Mr. Lundgren admitted that he completely missed the boat on sustainability (and gave kudos to Walmart’s leadership in that regard; Doug McMillon was speaking at the same event). He went on to acknowledge how important environmental issues are to young people, and therefore to future generations of Macy’s shoppers. Would trips to Walmart and other retailers have kept Macy’s out of catch-up mode?

P.S. Vendors don’t get off the hook here. Many still don’t visit the stores that are their accounts!

Janet Dorenkott
Guest
Janet Dorenkott
13 years 1 month ago

This is common sense. Yes, of course they should understand the customer experience and shop as well as visit. This will not just keep them in touch with the customers, it will also keep them in touch with their employees and their experiences. Employee moral is just as important as customer experience. They also want to know you understand their position. Understanding your business from all angles can only be a good thing.

Li McClelland
Guest
Li McClelland
13 years 1 month ago

Regular unannounced trips to stores by upper management to see what a customer sees is just good old fashioned business practice. Corporate board members should do the same. Mr. Lundgren’s publicized embrace of the “stealth executive visit” is the right approach. However, to make him a hero or poster boy for this type of management reconnoitering and intelligence gathering is very misplaced. Anyone who has shopped at a Macy’s over the last four years or so knows that the experience is often a very poor one, from service to merchandise selection to store maintenance. Where has Terry been all these years if not in his ivory tower? It may be a little late for him to be coming down now.

Richard Mader
Guest
Richard Mader
13 years 1 month ago

Sam Walton wrote the book on retailing, spending much of his time in the stores. What else is there to say?

Doug Fleener
Guest
13 years 1 month ago

When I read the New York Times article, I couldn’t help but think, “And your point is?” Of course retail executives should be out every week visiting stores, and of course they should do some unannounced visits. But these need to be balanced with announced visits to build morale as well.

It’s how the visits are conducted that ultimately determine if they’re successful. Too many execs look to see what their frontline employees are doing wrong, instead of learning what they’re doing right.

Brian Kelly
Guest
13 years 1 month ago

Leadership team members in stores? It is not just that they come in, it is what they do when the are in and what happens afterward. Is the rest of the field team on the same page?

I once walked a store with a c-suite exec. He jumped off the corporate jet, rushed in and re-did the dress shirt on a bust manikin. Then he walked out. The store folks were left wondering how he got the pins to hold inside the form. Housekeeping standards not withstanding, they should have been greeting customers and selling them stuff.

Don’t feed them; teach them how to fish.

Phil Rubin
Guest
Phil Rubin
13 years 1 month ago

This is a great step forward for Macy’s and does get back to the basics, as everyone seems to agree. The real question is how many other executives are doing this? How many sales, group and store managers are spending most of their time on the floor? What about buyers and DMMs, etc.?

Having worked at Macy’s and graduated from their Executive Training program (pre- and post-LBO, when it was actually Macy’s and not Federated), I find their stores continually disappointing in terms of merchandising, standards and sales associates.

Perhaps this is the beginning of their way back. They have a long way to go but a lot of opportunity.

W. Frank Dell II, CMC
Guest
13 years 1 month ago

One common point you see in every successful retailer is that senior management is in the store. Rabb, Jenkins, Walton, Marcus, just to name a few, spent time not only in their stores, but also in the competition’s. Everyone at headquarters should work in a store for a week each year, ideally doing a different job each time. Category managers should be in the store a minimum of once a month and, to be successful, one day a week. A common trait of failing retailers is that of headquarters losing touch with their stores and consumers.

Mel Kleiman
Guest
13 years 1 month ago

If you have read this far down the list of comments you know that everyone on the panel says get out and visit the stores, not as a manager but as a shopper. Your employees do not know who you are so you will be treated just like they treat the rest of the customers.

My only other suggestion is to get out to lots of stores and not just the ones that are convenient. I worked with a c-store chain and I have to tell you that the 3 stores that were within 10 miles of the president’s house were the cleanest, best staffed and best stocked stores. Get away from headquarters and see what the real world looks like.

Don Delzell
Guest
Don Delzell
13 years 1 month ago
While I completely agree that retail executives should spend time in their own stores, and in competitor’s stores, I find myself unable to join the cheering section for this specific example. The note raised about the tendency to micromanage the response to a store visit is well put. Beyond that, I have an enormous skepticism for a data point of one observations and responses. Knee jerk reactions to what may or may not be single point problems have plagued department stores for decades. My first retail experience was at a department store, and weekly “branching” was a requirement. Unfortunately, not only did it fail to accomplish anything lasting, it was an enormous drain on time. Travel between locations takes time, and in today’s retail executive environment, where does that time come from? Mr. Lundgren’s personal observations should be simply his own way of validating the information received from the field. Macy’s is too large an organization with too many data points to be managed by a single executive’s personal experience. And, all too often, that… Read more »
Tim Henderson
Guest
Tim Henderson
13 years 1 month ago

Good for Lundgren. Plenty of retail ills could be solved (and others nipped in the bud) if more execs spent more time at the store level. And not just stopping by for a casual walk thru, but really serving customers (e.g., working the POS, stocking shelves, serving #72 behind the deli counter).

I’d add that execs should also be shopping their stores anonymously so they get the everyday, Average Joe experience. When store staff know the top dog is on site, they’re bound to change their normal behaviors. Going on site anonymously makes for an authentic, get-real experience. Finally, it’s not enough to just visit; the execs also need to ensure a process is in place for follow-up so any issues can be addressed and any kudos handed out.

Lee Peterson
Guest
13 years 1 month ago

Great move, but you have to wonder, after he spends a lot of time in his stores, will he quit?? I might.

A dying concept in a very dynamic period will only die faster, and judging from what I’ve seen in Terry’s stores, the slide is getting steeper all the time. As we used to say at The Limited (speaking of a dying concept), “no margin, no mission,” and with the strategy of on-going discounting for no apparent reason, there is no margin there, so what’s the mission?

And to boot, there is no “there” there either. Best strategy would be to re-think, re-brand, re-model = get out of their box and create something for this century. Great emulator for Macy’s would be Best Buy, with their mode of continuous improvement. They’re always trying new things that may change the game.

James Tenser
Guest
13 years 1 month ago

I think it’s well established here that (1) retail executives should make regular, unannounced visits to stores in order to maintain a first-hand understanding of how things are really going and (2) Terry Lundgren has very good public relations instinct and a team to back it up.

This discussion leads me, a dogged industry critic, to think about how well Macy’s store managers may be enabled to perform at the level Terry hopes to observe when he “just pops in” for a look-see. I believe he knows intimidation is not enough to ensure peak performance. Tools, training, designed practices and incentives are all required elements.

A retail CEO who regards serving and supporting the stores as a vital function of chain management is on the right track. A true leader visits stores and thinks, “Am I doing well here?” or “How can headquarters help this store be even more successful?”

Rochelle Newman-Carrasco
Guest
Rochelle Newman-Carrasco
13 years 1 month ago

Mr. Lundgren has an excellent reputation for accessibility and a down to earth approach to his role at Macy’s. He is a fine example and sends an important message. There should be a systematic approach delegated throughout the organization so that it doesn’t only fall on someone at his level, and so that different eyes and ears hear and see different things. Gender, ethnicity and age issues will impact the visit. So, unannounced secret shopper visits should be a regular part of the retail week. At least once a week is practical and valuable.

David Rich
Guest
David Rich
13 years 1 month ago

I am biased, but do agree with Rochelle’s comments. Secret/Mystery Shopper programs (although often misused and misunderstood), give great insights to what really happens when management is not there, but most importantly give a “snapshot” measurement of how well a retailer (or any establishment) is delivering on their brand promise….from an objective standpoint.

To comment directly on the subject…I asked the CEO of a multibillion dollar chain to comment on the article. His quote: “Any CEO in the retail business absolutely needs to get out of the ivory tower and get out to where the rubber hits the road. In the retail world you are truly in the customer relationship business and you should never lose sight that customers sign our paychecks.”

…I guess that says it all.

Ted Hurlbut
Guest
Ted Hurlbut
13 years 1 month ago

Announced as well as unannounced visits are an essential part of any retail CEO’s responsibilities. These visits are essential for setting the tone and agenda for the company as well as staying in touch with what’s really going on at the customer level. The challenge is to maintain open communications through the chain of command so that every level sees these visits as positive and constructive.

Rob Papandrea
Guest
Rob Papandrea
13 years 1 month ago

This, not unlike communism, is a great concept and nearly impossible not to turn into abuse for the lower rungs of the social structure.

Executives that play “gotcha” with store level types usually cause way more harm than good, and the morale in each location has a more than even chance of being damaged by a well-intentioned Pearl Harbor attack by the Politboro.

If you want to know what’s going on in your stores, go there, keep your eyes open and your mouth shut. If you have concerns or praise, use your chain-of-command to drill the feedback down to the street and try your best not to beat the people down that make people in your type of position (overhead) possible.

Vincent Kelly
Guest
Vincent Kelly
13 years 27 days ago

Retailing executives should be hired from the floor in the first instance. Then, as part of their briefing, they should be made to work in a department–not walk through–but work the till for an hour or the stockroom on delivery day. Also to work a weekend as well.

This should be the business model for retail as the most important people in retail apart from your customer are your front-line staff. Retail works from the bottom up not the CEO down.

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