Helping LP Move at the Speed of Business

Intuition is a key part of top executives' skill set.

Sponsored by NRF PROTECT

Shelley Row has performed extensive research on executive leadership, including conducting 77 in-depth interviews with top executives. What she discovered was entirely unexpected.

“I was absolutely surprised by what I found,” Row said. “All but one of the top executives said he or she used their intuition in making key decisions.” Furthermore, many said the worst professional decisions they ever made were a result of not listening to their “gut.”

Row, an author, professional engineer, and former senior executive, will deliver a keynote address at the upcoming NRF PROTECT loss prevention conference. She thinks loss prevention executives can enhance their careers by challenging traditional notions about what it takes to be an effective leader.

Intuition, Row has discovered, is not only a key part of top executives’ skill set, but it becomes more important the higher up you climb the organizational chart. She trademarked the term infotuition® to describe the intersection of business pragmatics and gut feel. Using them in combination is central to being an effective business leader.

Row acknowledges that in today’s loss prevention environment—in which analytics has become king—her findings might take some getting used to. She also insists that data is a key element of decision-making and that loss prevention professionals who seek data to inform decisions are absolutely approaching problem solving in the right way. But data won’t always—or even most of the time—point clearly to a course of action. It’s when there are gray areas—uncertainty that surrounds most difficult security challenges—that loss prevention pros should be willing to give their “gut” its due.

“Data is critical, especially for loss prevention executives to understand losses and shrinkage. That data is really essential,” Row says. She notes that for some small decisions it can be sufficient to rely on data. “But for really complex decisions data is only one input, and there is danger in thinking that data is the only thing that matters in a complex problem.” What she and other top executives have learned is that data has limitations in complex decisions and that there is also a need to understand and honor gut feelings.

This new approach has an important ancillary benefit. It prevents LP pros from over-thinking problems, which can paralyze them and prevent them from taking necessary quick action. And, as such, it helps loss prevention executives meet one of their newest mandates from top management: to have security move at the speed of business.

Why have we grown to discount intuition? Row traces it back to early developments in science and the Age of Reason, but it is today’s neuroscience—and a better understanding of brain dynamics—that is putting the focus back on gut feelings . A nagging feeling, for example, is just as much a part of an individual’s intelligence as analytical thinking, it just comes from a different place that doesn’t access language. The brain uses several components to make decisions that Row likens to file folders. One is the logical and rational part, another is habits and values (where most decisions are made because it takes less energy to access these files), and there is also an emotional part.

Row says that by understanding how this brain/body dynamic unfolds, LP executives can make better decisions and enhance their ability to manage others. Understanding thought patterns and recognizing it in others is key to effective personnel management, she notes.

Intuition isn’t the only critical business skill to get a bad rap in some management circles, according to Row. Another underutilized strategy is to occasionally step away from business in order to earn a fresh view of complex problems. She believes there are significant benefits to a change of scenery, hobbies, and downtime, which can help solve seemingly intractable loss prevention problems. “Those [moments away from work] are when you are most likely to have those a-ha moments that result in creative solutions,” Row said. She notes that noble laureates are more likely than most to have consuming passions away from their field of work, and says there is a real problem-solving benefit to letting the mind wander. “It gives your mind the space to see things from a new perspective.”

Today’s retail environment is complex, uncertain, and rapidly evolving. Retailers are seeking opportunity however and wherever they can find it: by increasing information exchange with more constituencies, embracing new Web and communications technologies like cloud computing and social media, laying-off a substantial number of workers or rapidly growing the workforce, expanding overseas, or merging or acquiring another company. In pursuit of speed, however, security risks often go unconsidered.

Making decisions in today’s complex, uncertain environment requires a balance between thinking and feeling. Once achieved, LP executives can maintain alignment between security strategy and the business despite quick turns in corporate strategy. Row teaches executives how to strike that balance, as well as how to alter one’s approach to problem solving to achieve more of those critical a-ha moments.

Other Strategies for LP Agility

Agile, confident decision-making is one key to being an effective LP executive. So is an understanding of new technology tools that can help retail organizations to better meet their security and business challenges.

Today’s security technology has become so advanced and specialized that applying the right solution requires a keen awareness of one’s security goals and focusing on technology that ‘understands’ your business. That makes industry-specific trade shows like NRF PROTECT—which will feature more than 200 exhibitor booths—a good place to find devices and services from which to leverage value.

Many LP executives are promoting solutions that combine loss prevention elements such as video and point-of-sale data with intelligence that has value for other retail executives. Tools can be used narrowly—to watch video of a no-sale at a single location, for example—and also to identify changes that will enhance store performance. For example, by alerting district managers to stores that habitually open late, or by informing store managers when customer queues exceed pre-determined levels, or by assessing store traffic patterns to help the marketing department drive sales and managers to optimize staff deployment.

Scott Draher, director of loss prevention, process, and strategy for Lowe’s Companies, says his department’s success has been fueled by engaging IT and other business groups to leverage loss prevention systems across the enterprise. By choosing security solutions that also help to drive sales, improve operations, and gain visibility into the supply chain, his department has been able to secure approval for key deployments.

Finally, retailers have always faced cost and revenue pressures, but the time line has become increasingly compressed. To meet demands for faster growth, retailers are forced to accelerate the adoption of new technology, the implementation of new processes, and the adoption of new retail strategies. LP executives are being asked to assess risk and devise protection strategies at the same speed.

Concurrently, there has been a narrowing of the gap between industry leaders and competitors—an outgrowth of differentiation moving from hard assets to small variances in innovation and brand reputation. In today’s world, one small security misstep can have real and lasting consequences for a retailer.

Combined? Loss prevention executives face less time to implement solutions and higher stakes for failure.

NRF PROTECT’s educational program provides LP executives one opportunity to meet that challenge with presentations from industry thought leaders on critical issues facing the profession, such as store-level shrink, internal theft, organized retail crime, cyber and data security, asset protection, workplace safety, supply chain protection, store security, and fraud detection.

NRF PROTECT runs June 14-16 at the Pennsylvania Convention Center in Philadelphia. Shelley Row’s address (“Go with Your Gut: Effective Decision-Making in an Over-Thinking World”) is Thursday, June 16 at 8:45 a.m.

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