A Program for the Future / Lessons of the Past

    Building a successful career in loss prevention has always been predicated on the commitment to professional growth and development. Working in a business as dynamic as retail, it is essential that we remain flexible in our methods and progressive in our approach to a global retail market. As the business moves forward change comes quickly, and our skills and abilities must evolve to meet the needs and expectations of a new professional standard.

    But true growth must be built on a solid foundation. Especially when we consider the pace of change, we find that success is largely based on the refinement of the fundamental principles that anchor our skills and our decision making. By expanding on our foundation of knowledge, we give ourselves a stronger and more stable base to build upon. We reinforce our futures by broadening our opportunities.

    A Historical Perspective

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    When building an effective loss prevention program, history provides us with a complex interaction of many factors that will influence future success. Some factors are obvious and clearly stand out; others are not so obvious, and require deeper thought and retrospect to appreciate and understand. All of these factors will work together through a dynamic interaction to determine the course of events that guide us forward and drive us towards what happens next. History is one of our most powerful assets. But in order to maximize that value, we need to use the available information to gain a better perspective of what is going on within the business, recognize trends, and make better, well-informed decisions regarding future business and departmental initiatives.

    Historical perspective gives us something to build on. It gives us a better feel for what has worked, and how we can improve upon our successes. It provides a means to forecast possible points of failure, and how we can help to avoid repeat mistakes. Such perspective gives us a foundation that can help us to build rapport and foster the relationships that are critical for future achievements. It helps us to optimize performance and improve our overall productivity. Finally, pausing for perspective also forces us to slow down and take notice—of the people, the program, the company, and every factor that can and will contribute to an effective and successful operation.

    Company Culture

    A Loss Prevention department is always a part of something much bigger; and is not intended nor should it be perceived as standing alone. We provide support to an entire retail operation that involves a wide array of functions and complexities that makes every organization distinctive and unique. Every company has its own history and tells a different story. It’s not simply the products that drive the success of the company; it’s the people and events that have occurred along the way that make a company what it is. It is a living collection of individuals, ideas and outcomes that shape and compel a business.

    What drives shrink? What drives a company? When we look at the picture realistically and as a whole, we really can’t separate one from the other. Certainly there are different causes and different results. We have to analyze data, examine facts, probe, investigate, scrutinize and assess. But as we do so, we want to ensure that we don’t miss the forest for the trees. We want our conclusions to lead to answers, and that requires that we keep all of the different elements of the business in perspective.

    The Numbers

    Historical shrink performance is an important foundation. What is the company’s shrink history? How has it changed? How has it stayed the same? Are there particular stores, districts, or regions that consistently do exceptionally well or predominantly poorly? Are there distinct departments that stand out as shrink liabilities? Are there specific merchandise categories that have had a greater impact on our shrink results? What do we feel has been the primary source of our shrink issues? Companies that feel that the majority of their shrink issues are the result of internal theft will address those issues differently than a company that believes the primary source of shrink is the result of external theft. Companies that believe that their losses are primarily the result of operational issues will also address their strategies accordingly.

    What about sales performance? Similar questions should be explored from a sales perspective as well. There is a direct correlation between sales performance and shrink results—shrink is typically viewed as a percent to sales. But sales performance ultimately impacts every area of the business; both directly and indirectly. Sales numbers will also serve as an important indicator for many key business functions, and provide deeper insights into the overall management and performance of the stores. There are many numbers worthy of our focus and attention (others might include operational compliance, employee turnover, etc.) that can provide clues into past performance issues and point us toward future performance enhancements.

    The Programs

    Understanding the numbers gives us a benchmark—a place to start. This information alone however, isn’t enough. In fact, our comprehension of the word “performance” can lead us to many important clarifications. Performance is a vibrant word that describes the act of beginning and carrying something through to completion. It also portrays the way that something functions—the manner and quality of carrying out the activity.
    How has shrink performance been approached by the company? What has been the predominant emphasis of the Loss Prevention function? Has it been a proactive, or audit driven program? Has the focus been more on conducting investigations? Has there been a balanced approach? Was it truly balanced? How has the Loss Prevention program been managed? When examining the historical approach to shrink control, what programs and processes have been utilized to drive performance?

    How consistent have we been? An evolving retail industry not only requires adjustments and flexibility in our programs, but consistency in our message as well. The message that is sent through our programs and processes helps to provide strength and stability; and also lends credibility to the department. Having a firm grasp on this historical characteristic of the program provides critical insights into our opportunities and expectations for continued growth and development.

    The Tools

    As we examine all of the different resources that have been utilized by the company to fortify our Loss Prevention efforts (EAS, cameras, alarms, training tools, exception reports, background checks, etc…), how well have those resources supported the overall productivity of the department and the organization as a whole? How reliable have those assets been, and how well can they be expected to perform moving forward? How well have we been able to pinpoint unreliable assets and suppliers? Can we use our historical data to predict reliability issues moving forward? Can we consolidate resources and/or services to enhance performance and reduce expenses? How can we manage those resources to achieve the greatest degree of efficiency and effectiveness? We should make every effort to use our historical information to make better informed business decisions in order to optimize asset performance and improve overall productivity.

    The People

    Shrink performance may be shaped by the tools and processes, but it is still driven by the people. As a result, when we evaluate shrink performance, we also must examine the historical shrink culture as well. Has the Loss Prevention message been accepted by the stores? Is it threaded through the fabric of the organization? Why or why not? Does our program complement the culture of the organization as a whole? How well has the organization responded to Loss Prevention initiatives in the past? Have the people voiced concerns or offered suggestions? How were they received? In order for any Loss Prevention initiative to be successful, the people must be willing to make an investment and take ownership of the program. Reviewing past successes and failures can provide us with valuable guidance to help us move the program, the department and the company forward.
    While there are many factors that go into building an effective and successful Loss Prevention program, this is an important place to start.

    By capitalizing on opportunities to enhance our knowledge and education, we are making an investment in our own future. To learn more about developing your leadership skills and the certification process, visit losspreventionfoundation.org.

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