Building an Organization around Data and Technology

Sears asset protection

EDITORS NOTE: Scott Glenn, JD, LPC, is the chief security officer for Sears Holdings where he is responsible for asset and profit protection, safety and food safety, business continuity, and crisis response among other duties. Prior to joining Sears in 2008, Glenn held various loss prevention roles at Kohls, TJ Maxx, and Target and worked at the United States Treasury Department. He also plays an active role in the industry as a member of the Loss Prevention Foundation board of directors, the editorial board of LP Magazine, and the Retail Industry Leaders Association asset protection leadership council. Glenn earned a bachelors degree in criminal justice from the University of North Carolina at Charlotte and a law degree from Concord University School of Law.

EDITOR: How did you get started in loss prevention?

GLENN: Like many of my peers, I just fell into it in college when I started to work at Target. I did my undergraduate work at the University of North Carolina in beautiful Charlotte, North Carolina, and in my senior year I wanted to get a part-time job while I was looking at my career options. I was LPM 0317-BSalesfloor_1the clich like so many others in our industry. I spent a lot of time thinking I was going to be a federal agent and go work at the FBI or another one of the alphabet organizations. I had done my internship with the Bureau of Alcohol, Tobacco, and Firearms. They hired me as a civilian analyst while I was going through the process to get hired on as an agent. I saw some things in government work that I wasnt really thrilled with, politics and such, and around this time I was fortunate that an old boss at Target offered me my first job as an AP manager. I took the job and fell in love with the role, the company, and the profession itself.

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EDITOR: How long were you at Target?

GLENN: I was with Target for five years, starting out as a single-store AP manager and then went to a multi-store. Then I moved into my first district role in what was then called an investigation and training specialist. That was my last position before I left the company.

EDITOR: Now twenty-plus years later, youre the chief security officer with Sears Holdings. What exactly is Sears Holdings?

GLENN: Sears Holdings is a company that was formed out of a merger in the early 2000s. Eddie Lampert, who was our largest shareholder at the time, and is now our chairman and CEO, took a controlling interest in Kmart, which then bought Sears, Roebuck, and Company. He merged them into one consolidated organization called Sears Holdings. Today, we are that plus so much more, including our home services business, our integrated retail and e-commerce business, our Shop Your Way loyalty program, a pharmacy chain with over 700 units across the nation, and 600-plus full-service automotive centers.

EDITOR: How long have you been in charge of security and asset protection at Sears?

GLENN: Ive been in this role since September of 2013 when my predecessor, Bill Titus, decided to move on to the next phase of his career. I was fortunate enough to be selected to replace Bill and lead this organization. Its been about three-and-a-half years now. Prior to that I served as the divisional vice president and pyramid leader for the Kmart business. At that time, we still ran as separate formats within the company.

EDITOR: Are the two big brands, Sears and Kmart, organized similarly? Is the LP function independent for each, or is there crossover from one to the other?

GLENN: Great timing on that question. Up until recently, we were organized similarly with some obvious operational differences, Kmart being a discounter and Sears being a department store. But at the end of the day, we were pretty traditional in the hierarchies and structures. As far as the AP function, corporately we have always been a blended group. However, in the field up until 2015, we operated as separate format-specific AP programs under that corporate structure. In 2016, we started to pilot cross-formatting test-and-learn scenarios. We created districts and regions as shared services, and now in 2017, we will be moving fully to shared services. What this means is that our leadership teams in the field now support all formats within a geographic region. Its a significant change for us, and there is a lot of below-the-surface work being done to support the transition.

EDITOR: Since your internal promotion at Sears, and based on your experience early in your career, what advice would you give to young people who ask, What do I have to do to get noticed? What do I have to do to get promoted?

GLENN: The answer is everything with a large caveat. You have to be willing to do anything that can help the team and that you have the skillsets to do well. You have to be someone who is willing to put themselves out there and do things that may not be in your job description. You need to be willing to accept challenges, projects, or opportunities whether they are in AP or outside like working on a special project for operations or for a merchant group. Early in my career at Target, I volunteered to work on the company diversity committee. Later at Kohls I worked on the new store development team. Here at Sears Holdings, we have taken on digital device management. All of these were opportunities to work with cross-functional teams outside of the LP/AP space or expand the reach of our department. In every case, it helped me to develop either new skills or relationships.

I think that willingness to adventure outside your safe space to take on new and challenging opportunities is something that will get your name out there. Now thats not the primary reason to do it; I would do it for the developmental experience, for the chance to learn and grow. But getting your name out there is certainly a side benefit.

Now, the caveat I spoke of earlier is that you are careful to not over-promise and under-deliver. Sometimes you can stretch yourself so thin in those pursuits that you do not meet the commitments that youve already made, and that can have a negative effect on your credibility and ultimately your career. I have been guilty of trying to do too much a couple of times, and it has left me with a black eye that takes some work to recover from. So its critically important to make sure that you can handle what you commit to without it affecting either your day job or even your personal life.

EDITOR: Did you sit down at some point early on in your career and set career goals? Did you ever think, Im going to be the senior leader of a major corporation?

GLENN: When I first started in AP, I wasnt particularly introspective about that kind of stuff. Most people that know me today find that difficult to believe. But I didnt think too much in terms of long-term goals in AP. I wasnt unhappy, but I just didnt know if thats where I would be the rest of my career. I enjoyed it, but sometimes I thought about exploring operations, and even looking at something outside of retail always had some pull for me.

But at the end of the day, I realized that I really liked what I was doing, I was decent at it, and I was making some impact on the companies that I was working for. Thats when I really started to sit down and say, If Im going to do this for the next twenty or thirty years, I need to have some objectives and a timeline. This was the time when I really started to learn the value of planning, of having mentors and my own personal board of directors.

EDITOR: Is there anybody who has helped you along the way that you think of as a mentor?

GLENN: There are so many people that would qualify, but Ill never be able to mention them all. However, there are a couple that really affected my career in a significant way. The first person that comes to mind is Genny Shields, who was my VP of loss prevention at Kohls at the time and eventually went on to become the executive vice president of HR. Genny had a profound effect on the way I looked at the business as a professional. She taught me how to challenge myself, whether its setting goals for myself or setting goals for the performance of my team at the time. But most importantly, Genny challenged me from an educational perspective. She was one of the people who drove me to continue my education and ultimately to go back to law school.

The second person Id mention is Jim Haworth. Jim was a former CEO of Walmart Stores US and came here to Sears Holdings as our EVP of retail. I had an opportunity to work with Jim on several projects and issues over the years, and he took me under his wing. Jim taught me invaluable lessons around the politics of the business. He helped me to learn about how you navigate and work in the boardroom, how you manage senior-level relationships. He was always there to be able to give me advice and course correction as necessary. Both are people that I admire and follow to this day.

EDITOR: How important is it to have mentors outside of the LP world, like Jim Haworth in your case?

GLENN: Youre going to do fine having mentors that are confined to the LP world. But you will lack some perspective on how things work in the context of the larger industry. As well rounded as many of our retail LP and AP leaders are today on the operational aspects of the businesscertainly more so than ten or twenty years agoits still a completely different perspective when you have a mentor who is a merchant, CFO, or an operator, somebody that has four-wall accountability and is making corporate-wide decisions. They have a different way of looking at things, and you can learn from that perspective. The interaction and advice that comes from that group is invaluable.

EDITOR: What sort of leadership team have you assembled as direct reports?

GLENN: Well in my mind, I have the best leadership team in the industry, and Ive been blessed to have the opportunity to lead them. Some have been promoted up through the organization, and some have come in from the outside. I think we have a really nice balance of internal and external perspective. I want to walk through my direct reports very quickly.

The person I would call my right hand is Byung Kang. He runs our operations, finance, investigations/analytics, and systems/technology group. He has a big job, one that I know how difficult it can be because I did it for three years. Byung is not an AP practitioner, but an information technology person by trade. However, our business has become so data-centric, so technology-driven, he has become an indispensable part of our team. Byung and the investigations and analytics teams have built some of the finest data-mining and interdictive and predictive models that I have ever seen. This is the driving component of our strategy to be more efficient with our resources and add value to the companys bottom line.

Next is Lisa Kane, LPC, who comes from Target and has been with us now for almost four years. She runs our internal AP learning and development (L&D) organization, which is critical when youre working with an organization of 4,000-plus individuals that need to be career shaped. Lisa and her unit have been a phenomenal addition to the team. The value that they add to our organizational structure is beyond words. Our teams are truly developing into well-rounded business runners that happen to specialize in asset protection, and it is in large part due to the structural learning and skill-gap development that the L&D team provides. Lisa recently picked up responsibility for our safety organization, which made a lot of sense since safety is so process and training intensive. She and her team have been able to seamlessly incorporate the policy, procedure, and best-practice side of this into our learning platforms.

Then theres Lonndon Seely. She runs our specialty retail group, which consists of supply chain, e-commerce/online fraud, and our home services organization. Those are three big businesses within our organization that have their own complexity and their own scale. They are taking on more and more importance within the industry as you think about multi-channel and the blending of brick-and-mortar with the online presence. Lonndon has been with us for about three years. She came from the banking world and then previously from Home Depot where she used to run their supply-chain AP team. So again, a great addition to the organization.

We also have Don Knox, CPP, CITRMS, who runs our enterprise resiliency and business continuity team. Don has been with us for about six months and is responsible for our 2,100-plus retail locations, domestic and international facilities, and our travelers around the world. This is an area that, as you know, only gets attention when things go critically wrong, and we cannot operate the business or a sub-unit. Dons role is to modernize and update our capabilities. He and the team have done some really nice things in bringing this up to industry standards in areas that weve been lacking over the years.

Then last but certainly not least, theres Nadine Lejeune who runs our retail AP group. As I mentioned earlier, up until last year, we were running separate AP organizations for Kmart and Sears. This of course is our largest sector of the organization with the 2,600 big box stores, pharmacies, and auto centers, $20 billion in volume, and well over 3,800 associates in the stores. Nadine took over all the retail AP group in mid- to late-2016, and now shes running the new shared-services organization for us. This month is her fifteenth anniversary with the company. In the past, she ran our safety and food safety organization, initially with Sears, then Kmart, and finally corporately before transitioning into AP about three years ago. Nadine is very smart and has done a phenomenal job transitioning to the AP side of the business, as well as leading the transition of the retail AP team to a shared-services model.

Sears-LP-Managers

EDITOR: What special initiatives have you put in place over the past year or so that are responsible for driving your AP performance?

GLENN: I have at times been called a data person. Im OK with that, and I do think Im somebody who is very cognizant of the value that data brings. I would say that our philosophy over the last several years has been to replace manual work with smart data analysis. I am driven by the search for the perfect algorithm that explains what will happen six to twelve months from now. This of course is pie in the sky, but it is a target for how we look at things, how we focus. We are striving for that goal. I do know that we have spent a lot of time sourcing the right information, building the right systems, educating our teams to understand those systems, and building a data-centric approach for the organization. I feel very comfortable that were at a point where our teams are truly data capable and flourishing based off the work thats been done over the last couple of years. So I would say that our number one initiative has been to build extremely well-developed teams who understand technology, systems, and data in order to help make our job not only easier, but also more intuitive. We are centering the organization around better use of information and technology in what I call an interdictive manner, one that can isolate the problem and tell us how to fix it before it actually becomes a larger issue.

EDITOR: How do you rank the importance of focus between organized retail crime and online exposures?

GLENN: Online exposures are a top focus for us. As integrated retail and omni-channel becomes part and parcel of everything our company does, online fraud mitigation while balancing member impact is a top priority. As I mentioned earlier, Lonndon Seely runs our e-commerce team, and she has a rather large group of fraud investigators and analysts that work in a couple of different sites around the world.

Having the front-end fraud-screening processes in place, which Lonndons team is responsible for, is a necessity in this day and age. But its also very important to have that back-end process of reviewing transactions for fraud and building databases that help you make good foundational decisions. These days, our members expect to be able to place an order on their computer and to be able to pick that item up on the way home from work that day. That means you cant have a long, tenuous fraud review process. Lonndon and her team have built an amazingly nimble collection of tools for that purpose.

Because we are such a large company that does delivery and installation in 12 million peoples homes a year, and we have 8 million people come through our auto centers, and we have millions of Shop Your Way loyalty program members, we have access to data that we can use to help make good decisions in the process. For example, if I know that a large online order comes though that might look suspicious, but I also know that the LPM 0317-BSalesfloor_2member has had their oil changed with us for the last twenty years in a Sears Auto Center, I can quickly approve that order with no impact or delay to that member and very little risk of a chargeback.

EDITOR: Does your team take on any responsibilities that might be seen as an expanded role that encompasses things outside of the traditional LP domain?

GLENN: In general, as we work through our corporate turnaround, were certainly being tasked to do more with less and to be more efficient. To support that, we have taken on some things that have been outside of the traditional AP role. One example would be cyber-event management. We dont do cyber investigations. IT security and the legal department do with our partnership. But what we have done is helped develop a framework for how to manage these events. For example, in the case of a data breach or brute-force attack on our systems, we developed protocols with the key stakeholders, hold tabletop exercises based on industry standards, and help ensure that people can make the right decisions within the right timeframe during those very tense situations. I liken our role to being the quarterback that calls the plays during the game to ensure that we execute the game plan.

Another area is money laundering. Thats something that has traditionally been the purview of either internal audit or the legal department, but weve taken it on because we have the right data. All the things that weve done over the last couple of years have allowed us to data mine transactions to ensure that anything that potentially would be reportable to the IRS is flagged. Its all already there in our data stream. We already had it, so why have people manually review those reports when we can create systems that can pick them out better than a human being can? And maybe the last example to discuss here is again in the world of data. As I spoke of earlier, we have built dynamic data models that can tell us in advance where our trouble spots and outliers are. Now, based on that success we are being sought out to build these same tools for our operational businesses and even some of our merchant partners.

EDITOR: Do you or your team have a role in crisis management and the protection of human life?

GLENN: We absolutely do, and its probably one of the more serious and somber parts of what we do. Its definitely something that we take very seriously. We have a crisis management organization within the company. Its a small team, but they are 100 percent charged with making sure that we have the right processes and the right training mechanisms in place. During actual events, they are 100 percent in charge. They manage those events very closely with our business partners to ensure that first and foremost people are safe, but then secondarily our buildings and our properties are safe and that we get our business back up to speed as quickly as possible. So whether its a manmade event, like an active shooter, or whether its some type of natural disaster, such as a hurricane, tornado, or earthquake, we have very, very robust protocols in place to help us manage the situation, get relief to the individuals who are affected, and make sure that we get back in business as quickly as possible. Similar to the cyber-investigation process I spoke of earlier, this team prepares endlessly with our critical response teams to drill and ensure that we have no hiccups as we execute during an actual event.

EDITOR: I understand that in mid-March youre holding your annual AP meeting where youre going to bring in most of your management team. Can you speak about the agenda and the purpose of that meeting?

GLENN: First and foremost, that meeting is just a great networking opportunity to get everybody together to spend some quality time with our team. The corporate support team and I are lucky if we get to see some markets but once or twice a year, so its great to be able to build some camaraderie and enjoy some downtime together. As hard as we work all year, we ensure that there is some fun built into these meetings. Its a chance to bond. This year, about 250 of our field and corporate associates will be attending, and we will simulcast parts of the meeting out to our store teams. LP Magazine, as you know, has also been attending for the last three years, and we love having you guys there.

That said, this year the meeting takes on more importance for us because were in the process of our migration to shared services. We have already begun the transitiononboarding new leaders into their roles, building new hierarchies and processesbut there are so many critical things that we have to train our team on. If you think about it, if you were a district AP manager who spent twenty years working for Kmart and now you have fifteen Sears stores that youre responsible for, its a very different and, to be honest, scary kind of situation. The processes, the culture, the systemsthey are all new to you. Our professionals really know the ins and out of the business, but if you are that Kmart district AP manager, youve never dealt with an automotive center. It can be daunting and complex with a multitude of environmental safety and regulatory issues. There is a lot to adapt to. So aside from the camaraderie side of it, now theres a very practical need for us to spend this time refining our learning on the tactical pieces of the business and how they can help manage that even better.

I also want to make sure to note that we always take the time to give back during this event. This year were partnering with USS to provide fifty brand new bicycles, locks, and helmets to deserving and underprivileged children who otherwise wouldnt have an opportunity to afford them. All of that was donated by our sporting goods business unit, and I cannot thank them enough for their support of this event. We get to go to the school as a team and spend time with these kids and their families. I know that it will be very emotional for me personally and the teams.

EDITOR: Youve been involved with the Retail Industry Leaders Association (RILA) and National Retail Federation (NRF) as a leader in our industry. How important is it for you and your counterparts to have an active role in these associations?

GLENN: For one, I think its a responsibility as any senior leader in the industry to give back. I think about when I was a district or regional manager and was coming up through the ranks. I had the opportunity to go to some of those conferences. It was the biggest thing in the world to me to get to see and talk to some of the people in person that Id only ever heard their names beforeyou (Jim Lee), King Rogers, Paul Jones, Marvin Ellison, and so forth. You realize that theyre living, breathing humans just like all the rest of us. It made me feel like I could do that, that I could grow into what they were doing, and it made it real for me. So I think that obligation is incredibly important as a role model for others.

Second, these groups create a vehicle for us to share and bond as an industry. As we always talk about within AP, yes, we compete. Kmart and Walmart, Home Depot and Searswe are business competitors. But when it comes to AP, we all have generally the same accountabilities and common goals. Being able to present and share some of the things that are important to our industry is an opportunity that we all benefit from, especially when it comes to new concepts, technologies, and best practices. Theres not a conference that Ive ever gone toNRF, RILA, Loss Prevention Foundation, Loss Prevention Research Council, and so forthwhere I havent taken things back that I could implement in my organization and be better as a result.

EDITOR: You are also a member of the board of directors for the Loss Prevention Foundation (LPF). What do you think about its position in the industry today?

GLENN: We didnt have anything like the foundation when I was growing up. We didnt have that professional, credible organization that was there for us as an industry to make us better. I know there were some regional versions, but at the end of the day, we did not have a macro-level sponsor and advocate for us. And if I havent said it lately, I thank you and Gene Smith for making it happen.

LPF, in my mind, is all about bringing that credibility to our industry. Having LPQ and LPC certification as the standard, one that is becoming accepted as a must-have for many companies, is key. In my humble opinion, the value proposition that it provides to the industry is the academic legitimacy portion of it. They just take it to the next level, and it is something I would have never thought about twenty years ago. My opportunity to be able to contribute to that has been something that Im very proud of.

We have been offering LPC and more recently now LPQ scholarships to fifty of our associates free of charge every year now for the last three years. At the end of the day, when I get an email from an AP manager or a district AP manager saying, Thank you for this. I never would have been able to afford it on my own. Its something that Ill be forever grateful to the organization forthats what makes it all worth it for me, in part because we just garnered a tremendous amount of loyalty to the organization, and in part because they know that were doing it for their development. So from that standpoint, its been a great journey. Its been an honor to be able to contribute to the foundation.

EDITOR: For those who are busy with a career, it can be difficult to manage their business and also to get their certification. What advice do you have to those that are trying to make those both work?

GLENN: Im a planner, so for me its about discipline. We all have responsibilities. Depending on where you are in your career, depending on where you are in your personal life, everybody has different pulls and tugs on their time and their responsibilities. My advice is to be incredibly disciplined and time-concise. Make sure that you sit down and look through the course criteria and really plan it out over the period of time. I would encourage everybody to use the full year to go through the coursework and to schedule just enough time at the end so that you can take the exam. And being a planner, make sure that just in case something happens, or maybe you didnt pass the first time, you have an opportunity to get to the second exam. If its important enough to you to push yourself into this program, its important enough for you to plan your time and plan your resources to get through it.

Speaking of planning and discipline, its more than a talking point. People in our industry deal with a lot of high-stress, high-risk situations day in and day out, especially our field and store personnel. As important as everything seems to us at work, which of course it is, you must have a level of work-life balance, or you will not be long for this industry. So my parting advice would be to make time for your family; make time for yourself. You have to make time for the things that you like to do to be able to decompress and have a life outside of work.

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