“The pen is mightier than the sword” is a tried-and-true axiom that virtually everyone has heard applied to the world of media or, in some context or another, to the skill of writing. But how does it apply to the world of the retail store audit checklist?
Let’s take a look at what many industry leaders would arguably consider one of the most valuable functions the loss prevention industry lends to our business partners in today’s world—the audit.
In speaking with my peers, it seems most of us agree the audit programs we manage can be a major tool in the services we offer to our organizations. Call them what you will—a survey, a balanced scorecard, an evaluation, or an operating standards review—no matter what title they go by or how they are administered, they all boil down to the same general function.
The loss prevention audit is a means of measuring compliance, whether it is meant to be a review of operating standards, loss prevention procedures, inventory control standards, safety protocol, or operating standards. But, aside from the tangible intent of getting an audit score or using the audit as a compliance measurement tool, are you getting all you can from your audit program?
Expanding the Benefits of the Retail Store Audit Checklist
Without question, the audit, along with its delivery methods, can be one of the strongest tools within your scope to not only show historical data—where the store was performing yesterday—but also to impact the future of your organization, helping you train associates about how to correct and improve their deficiencies to build a better organization for tomorrow.
It’s a simple concept, but many times the auditor forgets that he or she can also be a valuable trainer to stop or redirect behaviors and actions when they are discovered during an audit. Not only can this practice correct an issue to promote audit compliance, it can drive behavior that can make the auditor’s job easier.
Additionally, it can move the auditor from being viewed merely as a business necessity to that of a leader within the organization.
Finally, when those being audited are given the opportunity to learn, they tend to become more accepting of the audit function and ultimately increase the success of the overall organization.
Does your retail store audit checklist, or the manner in which you as a loss prevention professional perform an audit, move the needle within your company? Or does the temperature drop and a cloud roll over when the audit comes out of the briefcase?
During my career, I have seen countless times when the LP manager walks into a building, pulls out an audit, and quickly sends chills down the backs of even the strongest store teams. Then a storm cloud begins to appear over the manager’s head and tornadoes spin out crashing into anyone who comes close to them.
Taking Audits to the Next Level
In 2004, Dr. Richard Hollinger said, “Some managers perceive the LP department as adversaries, not fellow team members.” Hollinger goes on to state, “The problem seems to be centered on the nature of the ‘security audit.’ These two words strike fear in the hearts of most managers.”
Isn’t it time to put that stereotype behind us? You should not be content with using your retail store audit checklist merely as a “test” or measurement tool. Wouldn’t you like to change the program to become a driver of your business?
You should strive to move to a new plateau where the auditor is viewed as a partner, a trainer, and a leader. You should promote a loss prevention audit environment where the associates are receptive to learning something new. Wouldn’t you love to go into an audit where associates are proud to show you what they’re doing, what they have achieved, and perhaps share ideas with you about how to improve a practice or procedure?
During my fifteen years in loss prevention, I have found a truth that has become self-evident: the audit can be one of the best sources of training you offer your business partners. How can this be? It’s simple, but it has more to do with how you audit rather than what you audit.
Let’s break it down into three easy steps borrowed from Jeff Immelt, CEO of General Electric. He has a checklist of ten concepts that he calls “Things Leaders Do” [see sidebar]. Three of them are extremely pertinent:
- Understand breadth, depth, and context.
- Leaders learn constantly and also have to learn how to teach.
- Simplify constantly.
Let’s look at each of these concepts as they relate to the retail store audit checklist.
Understand Breadth, Depth, and Context
“The most important thing I’ve learned since becoming CEO is context. It’s how your company fits in with the world and how you respond to it.”
First, take a constructive look at the retail store audit checklist document itself. How does your audit fit within your organization? Does the audit support the goals and direction of your organization so it is viable to use as a training tool?
The retail store audit checklist should be grounded with objective, non-negotiable standards that are based on company standards and practices. Is this clear to both the auditor and the person being audited? Are questions asked in a clear and concise manner?
The wording needs to be simple and to the point. There should be an “answer key” or audit guide to help educate not only the auditor who performs the audit, but also the person who is being audited. Your retail store audit checklist should be an open-book test. The audit should be published, used in training platforms, and referenced as a guide to help support associate education.
Second, you should ensure you invest the time to “train the trainer.” The auditor needs to understand the “breadth, depth, and context” of what is being audited. They must be as comfortable with the processes being examined as they are with the audit itself. How can you perform a competent audit if you do not understand the procedures you are auditing? Whether it’s a company policy or a standard operating procedure, you should understand its intent from beginning to end.
While it’s not necessarily the loss prevention manager’s job to run a register or manage a store’s inventory system, it does make sense that you should clearly understand the process you are auditing and how it fits within the framework of the organization’s goals.
Knowing how to answer an audit question is one thing. Knowing why a question is being asked is more valuable. Being able to explain the intent of a question and train on it adds even more value.
When learning to fly a plane, you want a competent pilot to teach you. When learning to play golf, you want a golf pro by your side. When learning about an audit platform, who better to teach and train about the details within the audit than the auditor.
Leaders Have to Learn How to Teach
“A leader’s primary role is to teach. People who work with you don’t have to agree with you, but they have to feel you’re willing to share what you’ve learned.”
Have you ever had an associate ask you why a task is performed in a certain manner? Do you use your retail store audit checklist as a training tool to encourage these types of questions? Doesn’t it make sense that you should take the time to explain the purpose or the “why” of the policy?
When a six-year-old is at the great “why” stage in his or her life, it can sometimes be frustrating to a parent. But it is also a great reward to see the proverbial light bulb click on when he or she finally gets a concept.
Similar experiences can be found in the world of loss prevention auditing. It is more rewarding to train the associates responsible for the work being done and ensuring their success in the future rather than simply identifying problems and not offering solutions.
By adopting a training mentality, you will not only prevent an issue or reoccurrence in the future, but you will also increase future compliance. This will make your job easier by not having to revisit the same issue time and time again. Additionally, you are building a relationship with the associates and becoming a leader within your organization.
If you took management courses in college, you may remember the academic study known as the Hawthorne effect, which was conducted in Chicago in the late 1920s. The basic premise of the study was to determine whether changing lighting conditions in a factory would increase production. Researchers changed lighting conditions by adding and removing lights and then questioned the workers about their attitudes and preferences towards the various lighting conditions.
The results of the experiment showed several different conclusions. Factory production increased no matter what the researchers were doing to the lights. It seemed that production was not being impacted by the lighting, but rather by the workers being asked to be involved in their environment. When the researchers and management asked for employee input, the employees demonstrated more concern about the work they were doing and production increased.
The study tells us that the workplace is a social setting, and employee productivity can be directly related to the relationship that is formed with management. In a nutshell, employees like to receive attention and are happier in their jobs when they receive attention from management. Your retail store audit checklist should promote a positive relationship with employees; one in which you are always teaching and they are always learning.
“I always use Jack [Welch] as my example here. Every leader needs to clearly explain the top three things the organization is working on. If you can’t, then you’re not leading well.”
Did I mention that aside from being a teacher, you also need to assume the role of leader? Be proactive and ask your store teams if they understand why a policy is written the way it is or why a procedure is mandated in a certain manner. Don’t assume the information from your audit visit will trickle down from the management team. Take the time to visit with the appropriate associates while you are at the store.
One tactic that I have seen used successfully with several loss prevention managers in my organization is when an issue is identified in a store, the LP manager goes directly to the associate responsible and points out the opportunity. This must be done in a positive manner, but training them on the spot seems to be effective. It stops the problem of compliance at the source.
Secondly, if the training is conducted in a positive way it, builds a relationship with the associate. Finally, it makes the LP manager a real person to that associate.
Where does a football coach stand during the game? He is just off the field on the sidelines, but within touching distance of the players. Why? It’s the best vantage point to see the action and direct the plays.
While I hate to pick on the Internal Revenue Service, they provide a great example. An IRS auditor will most certainly know what to audit for and what the tax law says, but trying to explain it to the taxpayer outside of quoting the page, paragraph, and subsection of the tax code is not something they are well versed in. How many times have you had a positive interaction with the IRS? Do you like IRS auditors? Do they serve as a source of valuable information for your compliance and training needs?
As Dr. Hollinger also pointed out, “Managers consistently complained about the fact that they knew very little about the LP problems that they were facing on a daily basis.”
Take the time to ask questions when you encounter a new associate or manager and are working with them in an audit session: “Do you know why we do [blank] this way? Let me explain.” You not only teach someone something, but you are also building strong interpersonal relationships.
Aside from better audit results, increased compliance, and reduced shrink, you are also placing yourself in a respected leadership position within a strong network of supporters that will help you achieve the goals of your organization.
The average store associate may never see your company’s president or CEO. Occasionally they may see a regional vice president. But in your role, you are the organization to that associate. What you say, what you teach, and what you exemplify is the organization to the associates in your stores.
Implementing the Concepts
These are three fairly simple concepts to implement, but ask yourself a few questions first. As mentioned in the beginning of the article, how is the weather in your world? Does the temperature drop when you step through the door of your stores to complete an audit? Is it a race to see what can be corrected before the “gotcha” audit comes out of the briefcase? Or is it an opportunity to train, teach, and learn—not to just get a score or another store visit out of the way?
You might be employing one or two of the concepts in your routine or organization already, but understanding all three can help make you the hero rather than the IRS auditor.
- Your retail store audit checklist should support the organization’s goals and the auditors should understand the impact of the audit. It should positively impact your store teams and the organization.
- Every audit should be viewed as a chance to teach someone something new.
- You should be able to explain your objectives and keep them on a level your store teams can understand, giving you the opportunity to be a leader at the store level.
- Implement these steps and make it a philosophy that is as important as the procedures you are auditing and you will be creating a winning environment for yourself, your store teams, and your organization.
SIDEBAR: Things Leaders Do
GE’s Jeff Immelt on the 10 keys to great leadership.
1. Personal responsibility—“You lead today by building teams and placing others first. It’s not about you.”
2. Simplify constantly—“I always use Jack [Welch] as my example here. Every leader needs to clearly explain the top three things the organization is working on. If you can’t, then you’re not leading well.”
3. Understand breadth, depth, and context—“The most important thing I’ve learned since becoming CEO is context. It’s how your company fits in with the world and how you respond to it.”
4. The importance of alignment and time management—“There is no real magic to being a good leader. But at the end of every week, you have to spend your time around the things that are really important: setting priorities, measuring outcomes, and rewarding them.”
5. Leaders learn constantly and also have to learn how to teach— “A leader’s primary role is to teach. People who work with you don’t have to agree with you, but they have to feel you’re willing to share what you’ve learned.”
6. Stay true to your own style— “Leadership is an intense journey into yourself. You can use your own style to get anything done. It’s about being self-aware. Every morning, I look in the mirror and say, ‘I could have done three things better yesterday.’”
7. Manage by setting boundaries with freedom in the middle—“The boundaries are commitment, passion, trust, and teamwork. Within those guidelines, there’s plenty of freedom. But no one can cross those four boundaries.”
8. Stay disciplined and detailed—“Good leaders are never afraid to intervene personally on things that are important.”
9. Leave a few things unsaid—“I may know an answer, but I’ll often let the team find its own way. Sometimes, being an active listener is much more effective than ending a meeting with me enumerating 17 actions.”
10. Like people—“Today, it’s employment at will. Nobody’s here who doesn’t want to be here. So it’s critical to understand people, to always be fair, and to want the best in them. And when it doesn’t work, they need to know it’s not personal.”
This article was originally published in LP Magazine in 2005 and was updated February 28, 2017.