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It Is Entirely about the People

Most all of us are in the midst of implementing strategies for a new fiscal year. As we do so, I wonder how many organizations truly looked back at 2001 and beyond to evaluate and understand our successes and our failures. The idea of such a postmortem appeals to many organizations, but unfortunately, all too often, suffers the same fate as most well-intentioned New Year’s resolutions.

We mostly grapple with the same challenges year in and year out. One of those constant challenges is our people.If we can only improve our people, we would have better customer service, less dishonesty, longer tenure, greater levels of ownership, and on and on. The list of positives that better people bring is virtually endless. But the problems and questions are numerous.

  • Who do we hire?
  • What do we pay them?
  • What are our expectations of experience and education for certain positions?
  • Where do we get these people?What pitfalls must we avoid?

These are just a few of the questions that must be answered and answered collectively by the various disciplines in an organization. We should not drop this analysis solely on the doorstep of one department. It is far too large a priority with an impact beyond imagination.

- Digital Partner -

In this article, I will offer my opinions, share some experiences, show some contrasts, and suggest some solutions to several of these problems. My thought process on this subject has always been “learn and apply.”Experience is valuable, but useless when not properly applied. This discourse is ideally aimed at anyone who operates or manages retail locations in malls or strip centers or both. But certainly anyone who is interested in a different angle, a unique approach, or just an alternative opinion can benefit from this exercise.

One thing that you will not see in this article is an endless supply of statistical data. I typically avoid numbers on this topic. There are far too many variables. Use of analytical data in this arena always seems to support the story that the author wishes to tell. Statistics are only as accurate and applicable as the provider, developer, and end user intended them to be. They are subject to change. You can then conclude that this reading will be primarily a theory-laden overview of observations and the conclusions drawn from those observations.

That being said, I share a short story that I heard, interestingly enough, from an accountant of a large firm. It seems that three candidates were being interviewed for an important executive position. The senior vice president who was conducting the interviews was focusing on certain qualities that he needed in the position. The screening process resulted in three final candidates: an attorney, a school teacher, and an accountant.

The attorney was the first to be interviewed. As he sat down, the senior VP stated that the resume was in order and the qualifications on paper were met, but that he had one question that he needed answered. He asked, “What is two plus two?” The attorney thought for a moment, and then requested a sidebar with the executive. When that was granted, he leaned over and whispered, strictly off the record, invoking plausible deniability, and with a limited degree of certainty, “It is somewhere between three and five.” The attorney was thanked for his time and excused from the interview.

Next to be interviewed was the school teacher. The senior VP again stated that the resume was in order, but he needed one question answered. He asked the teacher, “What is two plus two?” The teacher promptly articulated that the answer is “four.” The teacher was excused.

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Lastly, the accountant was seated for his interview, and the senior VP indicated that the candidate possessed the necessary credentials, but he had a single question to be answered. “What is two plus two?” The accountant confidently quipped, “What do you want it to be?” The point of the story is that statistics are of value, they are essential in many projects, but they can be modified or adjusted to make a case for or against just about anything. Statistics don’t lie, but they can mislead. For example, a company may boast that the pre-employment testing that was implemented last year, reduced turnover in a certain district by 75 percent over the previous year. But what is not taken into consideration is the new district manager, four new store managers, and several new assistant managers who were properly trained and working on the same page.

It is hard to draw a statistical correlation for motivational, interpersonal, and developmental skills.Certainly, there is an assortment of reasons for improvement. There is seldom one single reason. Application review, pre-employment testing, behavioral and multiple departmental interviewing, active recruiting rather than walk-in selection…all play an integral role and may not have a statistical equivalent to point to.

Empowering without Training Equals Failure

Jack Welch, the former CEO of General Electric, once stated that in his opinion, success “is 75 percent about the people, 25 percent other stuff.” While I am no one to argue with Mr. Welch, I would suggest that it is more like 90 percent people, 10 percent other things.

It Is Entirely about the PeopleNobody wants their stores to fall prey to heartbeat hiring, but it happens. It happens because we in management fell in love with the term empowering— allowing store-level management to make their own decisions. Empowering, loosely defined, means we let them do it, that we don’t need to be involved in store-level decisions.

- Digital Partner -

The problem with this strategy is that we do not prepare them to be empowered. It’s too easy to let go because it is one less item on our plates. I have yet to see a company come up with empowerment training. It is usually one gigantic assumption and, all too often, a huge misstep.

Frequently, we fail at applying what we have learned, because the people that should be doing the applying have yet to learn from us. The critical information never gets down to the hiring level. The person or persons responsible may get it, but he or she can’t sell it to those who need to buy it.

For instance, here is a theory on employment applications. Think of them as the “daily racing form” for employees. If you have ever been to the horse races, the daily racing form provides a thorough report on the past performances of every horse running that day. You can choose to read the form, or you can choose not to and just guess. We have all heard stories about people choosing the pretty grey horse, or the horse with the funny name, and how that horse won that day and how exciting it was. We don’t often hear the vast majority of stories where the horse finished dead last and what a waste of money it was.

Let’s just say you decide to apply what others have seen and learned, so you carefully read and analyze the daily racing form before you place your bet.
Right there in black and white, the horse with the funny name, El Paso, is a 50 to 1 long shot. El Paso is exactly what we should do with this candidate. He has raced 27 times, never won, never even finished better than second to last.

Comparing those race results is not  unlike analyzing an applicant’s places worked, length of time employed, wage changes, reasons for leaving, etc. There is a reason that the horse, or in this case, the applicant is a 50 to 1 bad bet. But, we would not have known that had we not thoroughly examined the application.

The application has much to say to us, but we need to think of the why’s and the why not’s, give it much more than a once over, and, most of all, apply what we learn from it. Just telling someone to read the application is not good enough. Patterns will always continue, whether good or bad. We instinctively know this, but we still seldom put that knowledge to work.

Another example that may serve to illustrate my point is the “exception.” This is when the hiring manager has found some gaps in employment of theIt Is Entirely about the People applicant, maybe some questionable reasons for leaving a previous position, or even that the candidate came back “not recommended” on a pre-employment test, and yet the manager decides to make an exception. Why? There are many excuses. If you ask the manager, you will likely hear, “I don’t normally make exceptions, but I did in this case.” But if you crawl into the detail of that manager’s recent hires, you may find that the exception and the rule have reversed roles.

Another frequent situation is the “push-comes-to-shove strategy.” The store-level manager has procrastinated to the point where he is in a real bind. That’s when you are likely to see the heartbeat hire…a candidate that has just one credential, they have a heartbeat.

For these and other reasons, the manager bets the 50 to 1 long shot, and here are the results. The poison enters the store and infects the other employees. Inventory shortage rises through the roof. Employee morale takes a nose dive. The store is running a double-digit sales decrease. Customer service is a distant memory. Apathy and negligence have prevailed. The next thing you know, the quality employees that were there have left or, worse, they have become poison themselves.

This negative cycle will continue indefinitely unless corrected. Those of us watching from the corporate mountaintop might wonder: “What went
wrong with store XYZ?” It is up to us to come down from on high and apply what we know to break the cycle. Otherwise, we become like the instructions on the shampoo bottle: “Wash, rinse, repeat if necessary.” In my opinion, it is entirely about the people, and we need to build stock in them.

Strip-Center Versus Mall Store Employees

This is my third specialty retail organization and also the third company that has operated both strip-center and mall locations. In each of those organizations, there have been many similarities. But in a store set-up comparison, strip-center versus mall, one particular contrast is very apparent to me. Strip-center locations typically have a lower inventory shortage and longer employee tenure than mall locations. Why would that be?

We know that high turnover tends to translate to poor inventory shortage results. But why would the turnover in amall be higher than that of a strip center?

I have seen the inventory shortage results in a strip center be almost inconsequential compared to that of aneighboring mall store, with the same company and essentially the same merchandise. After seeing one exampleafter another, I have to conclude there must be something to it…and there is.

It Is Entirely about the People

In my opinion, it corresponds to the people hired in each location. In strip centers, store managers get far fewer walk-in candidates, which force them to be better recruiters. For that reason, the interview process is typically more properly planned. In mall stores, the walk-in is the catch of the day, like it or not. In fact, the candidate was probably walking the mall, looking for a job…any job will do…and they picked you.

Which employee do you want?

Mall Locations—While the pool of employees in a mall location is far greater, so are the risks. How so? The mall employee is only as loyal as his or her options, and the options in a mall are numerous. The next time you visit a mall, count the number of help wanted signs in the store windows. Better yet, put on a name tag of the company that you work for and walk the mall. The name tag is an indicator to every store manager that you are a free agent. You could fill a duffel bag with business cards by simply walking one end to the other. And we wonder why turnover is high.

Temptation to a mall employee is constant and goes beyond changing employers. For example, the food court, while not exactly a culinary delight, is the only game in town for the mall employee. Most employees cannot afford to eat in the mall every day, but some of the food court employees have a way to reduce that expense. It is called reciprocal play. In other words, I will do you a favor and you can return the favor sometime. Once the employee gets involved, they’re in for the long haul. There is no way out, until we find out and they are let go. The food court employee need not worry, another victim will soon be hired and the river will flow once again.

Another example is the coffee houses. Every mall has one and the line is ten deep with 17- to 22-year-old employees waiting for their caffeine fix. When I was that age, the choices were coffee black or cream and sugar. Today, some companies have employees with $6.00-a-day caramel macchiato habits. Do the math. For most employees, this addiction is not affordable and the coffee house employees know it. It is just a matter of time before the employee weakens and succumbs to the temptation. And we wonder why shortage in the mall is high.

The possibilities do not end with the food and coffee-house employees. Every store in the mall that offers a product that might tempt our employees is a potential risk. Employment at the mall also brings some newfound friendships.Other mall employees may stop by to exchange pleasantries or meet for breaks. The problem with theses eemingly innocent chats is they turn into networking meetings, where discussion ranges from the nicest manager to work for, to the easiest and most lucrative mark. There is little we can do to prevent these conversations, but we need to coach our employees on this topic. Share some of these stories. Make them laugh, but get them to listen.If we can get through to the majority, we can break the cycle. We need not just know it or apply it, we need to sell it and sell it constantly.

Strip Centers–We typically recruit better in strip-center locations, but we are also susceptible to walk-in candidates. The difference with the walk-in here versus the mall is he or she likely chose that store because of the product being sold or an experience that they had while shopping. They wanted to work there versus the any-job-will-do game plan for the mall employee.

As an employee, this type of candidate will convey their enthusiasm to customers. They will also stay with this job longer, because of a sense of ownership. They wanted to work there in the first place.

This ownership and heightened degree of loyalty will also assist them in resisting temptation. Fortunately, the temptations are fewer and less inviting. Most strip centers have a fast food place in the parking lot and that’s about it. It is far from the warmth and comfort of a mall food court. The coffee houses are not nearly as prevalent as in the malls, so you need not worry that they are blowing their paycheck on $6.00-a-pop caffeine binges. At worst, they will haveto travel for it, which is another added benefit to the strip-center location.

It Is Entirely about the People

The employee stays on site, primarily because there is no place else to go. Employment opportunities are also limited to the shops in the center. These shops are fewer and farther between and will require the employee to brave the elements, should they wish to take a look. If the employee is sincerely interested in changing jobs or evaluating employment options, they must get in the car and drive somewhere. Strip centers are not the social interaction capital of the world either. How much fun can it be to walk outside and watch the cars go by?

It Is Entirely Up to You

If you subscribe to the theory as I do that “it is entirely about the people,” you can find solutions through this comparison between mall and strip center locations. Hopefully, you can find value in this analysis regardless of thestore set-up in your company.

Our people affect everything, right and wrong. They teach our staff members. They talk to our customers and represent our company. They are our most valued asset and also our greatest potential liability. We all want motivated and enthusiastic employees that convey that same enthusiasm to our customers. At the end of the day, we all want better employee retention. But what are we prepared to do to make that happen?

If we believe that these are the essential ingredients for a successful operation, we need to revisit our previous strategies and develop alternatives. We must implement procedural and cultural changes that we diligently take down to the store level. If we can succeed at that, we will also observe positive changes dropping to the company’s bottom line. Finding the right people for your stores requires proper recruiting and evaluation by store-level managers. The only way to ensure they recruit and evaluate properly is for you to teach and reinforce the proven strategies that we all know, but don’t always follow. It is up to you to help these managers apply the theories that you buy into. They can help communicate your messages accurately. They can teach as they have been taught and ultimately bring about the consistency that leads to the results that you want.

If we allow them to hire the wrong employees, and those employees become the tree that dispenses the poisonous fruit, we need to look no further than ourselves. Promoting ownership and empowerment at the store level can be a wonderful thing, as it brings us the executives of tomorrow. But empowerment must not sacrifice good and thoughtful decision-making on employee hiring. It’s up to you to ensure it doesn’t.

EDITOR’S NOTE: The opinions expressed in this article are solely the author’s and do not necessarily represent the views of KB Toys.

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