276 CEOs – Creating Great-Performing Store Directors
By Rick Moss
In the 19th study produced by the Coca-Cola Retailing Research Council, researchers at Franklin Covey sought to “unlock the secrets” of great performing supermarket store management teams. In its report, and in a presentation made in the Grand Ballroom at McCormick Place during the third day of this year’s FMI Show, the Council listed “the Four Management Practices that are always found in great-performing stores but are uncommon in non-existent in lesser-performing stores.”
Ray Stewart, executive vice president, Hy-Vee, and one of the study advisors and present on Tuesday, put it this way, “We have 276 CEOs. A store director as a CEO can do more for the company than anyone else.”
In his brief overview of the extensive study findings, Bob Whitman, president and CEO of Franklin Covey, first outlined 3 key outcomes great performing managers always deliver: achieving superior financial performance relative to the given situation; earning the loyalty of customers; and earning the loyalty of store-level employees.
Covey then explained that they saw four performance conditions essential to achieving greatness:
- Clarity and commitment in the company’s overall strategic direction;
- A focus on the drivers that will move the organization directly to those goals;
- The necessary motivation that propels goal achievement, and;
- A “continual cadence of accountability” throughout the organization.
Among the numerous insights drawn from the research, Mr. Whitman emphasized that successful companies are able to recognize great performance versus giving too much credit to those who benefit from a great location and need only to “cruise on autopilot” to achieve acceptable numbers. “It’s important to look at the hand they’ve been dealt,” he recommended, and to evaluate performance “against the sales potential of a store.”
Other participants in the study effort were present for a panel discussion, moderated by Bill Bishop, president of Willard Bishop (and a RetailWire BrainTrust panelist). Asked to explain the motivation behind the study, Suzanne Wade, president & CEO, SAFD Retail Division at HEB, described the “incredible challenge” faced by store managers every day in just dealing with the complexities in “getting it all done,” let alone excelling. So, she explained, when they looked at high-achieving store leaders, they saw a need to “unlock their secrets” for the betterment of the whole.
Bill McEwan, president & CEO of Sobeys, termed it a “challenge of consistency”. He saw the need to understand what great performing stores look like and recognize the “DNA” that was inherent in the greatest store managers. He declared the study a success in that they “learned about behavior and competencies behind the scenes that animate and inspire great performance.”
All panelists reiterated the need for the head office to establish an environment for store-level management teams that stresses simple clarity of direction, simple processes, and accountability.
A summary of the Coca-Cola Retailing Research Council North America’s study, Getting to Great: Mapping Management Practices that Drive Great Store Performance, is being made available for free on their Web site: www.ccrrc.org. Plans are also in place to provide retailers with an online self-evaluation survey and a workbook program at a later date.
Moderator’s Comment: How can executive management “drive great performance” in their store management teams? If clarity of strategic direction is the
key driver, how can that be best practiced and communicated to store-level workers?
Sobey’s very articulate President & CEO Bill McEwan summed it up nicely. “Now that we know what works at store level, we need to ask how we can make
sure middle and top management remove the bureaucracy and get out of the way to liberate great performance at store level.” –
Rick Moss – Moderator
The best companies at store level seem to all do one thing… focus…. And focus on 3-5 things tops. Twice a day checklists of 100 items that take 2 hours to complete is not where the best are spending their time.
Dovetailing on Charlie’s point, it is about the focus and the clarity of mission and intent to be sure. I would add that it is also about communicating that vision/mission/focus. Whether the communication is from store management to employees (many of whom are part-time, first job holders and are seeking direction and management) or from store management to shoppers (what makes this store different from any other store either in chain or versus the market).
These are not new ideas or necessarily any different than the ones that would be offered up if we were talking about nearly any other business. It just is more acutely felt in the grocery store or retail in general.
From what the study actually says, it appears to have done a fine job of measuring and analyzing the data. The four essentials for achieving greatness are excellent points and come with clear examples in the study. It is good to have data that affirms what we might have only assumed are the keys to excellence.
I don’t mean to trivialize the study itself, but we have had somewhere around 11 studies in the last 20 years that have reached similar conclusions (Kotter and Hesket, two from Collins and Porras, Hamal and Prahalad, etc). With all of this excellent data around, why don’t organizations make more use of it? Why is retail at such a low level still?
Our firm has monitored hundreds organizations as they react to these studies, and we have seen the same patterns over and over: 71% of organizations ignore these studies or dismiss them in some way; of those organizations that don’t, 78% incorrectly identify with doing the successful behaviors, and 21% are unable to make changes that last.
After studying this basic problem for 40 years, we have concluded that despite all the seemingly useable data these studies produce, they apparently lack the information that will enable organizations to accurately assess their current conditions, to absorb what the studies actually say, and then to make significant change that is self-sustaining. None of these studies have analyzed how to overcome these organizational defense routines, the routines that make these excellent studies, in a broad practical sense, forceless.
Each location’s financial performance was compared to the market potential using an econometric model. Many retailers simply compare location performance to last year. Making an optimal goal versus accepting a goal based on history: that’s unusual.
The ability to calibrate goals, measures and rewards to a given store (or any) manager is the key to success. People instinctively work to do that which is rewarded. They will focus their efforts on the aspects of the “reward” over which they feel they have the greatest personal influence. That’s why “team” goals, while laudable, are also relatively ineffective at influencing any given individual’s behavior. When the individual manager is the key to performance (and aren’t they almost always — retailing or other business?) then it is critical to calibrate his/her measures so they feel the single greatest influencer on their reward is their own performance.
The new CCRC report is a welcome and much-needed contribution to thought leadership in this area. Returning leadership and effectiveness to store managers is unquestionably a critical need for the supermarket industry.
I believe there is another layer behind the story, however. Most conventional supermarket firms exist in a strategic vacuum that sucks store managers into the black hole. The “Getting to Great” report references the present emphasis on to-do lists – a clear symptom of this underlying problem.
It is my observation that the practice of captain-driven, headquarters-centric, episodic category management is largely responsible for this phenomenon. This causes a piecemeal-ing of strategy, a crazy quilt of disconnected in-store tactics, and generates the impossible store level to-do lists referenced in the CCRC report.
Many of the suggested success behaviors indicated in the CCRC report are thwarted directly or indirectly by the present CM practice complex. As a result, store managers are marginalized and they become outsiders to the decision process. This is tantamount to a wholesale waste of intellectual capital.
The solutions proposed in the “Getting to Great” are excellent, in my opinion, but not sufficient. Getting there will require new ways of looking at the organizational distribution of decision-making and decision support, to tap into the collective power of store managers as local strategists.
To build great leaders in retail you need the right people on the right team.
1. Hire the right people. You can’t give the right strategy to the wrong people.
2. Everyone should understand and own the corporate strategy and goals.
3. It’s mutation. It is not about change because people change back. Your team must become robotic, methodical, and focused.
I think that Mr. Cowgill and Mr. Tensers’ comments are very much on target.
I think that the answer to the question ‘why’ so much available information never gets put into use/practice is simply a result of what I would call “organizational ego.” You can make your own interpretation.
I believe it is true that one of the greatest talents and centers of organizational insight is missed by the disregard of Store Director/Manager input. When that exists, it flows down hill to the associate which at that point impacts the customer. Organizations that seem to capture this bottom up involvement (and I do mean the lowest level) seem to achieve great success.
Very good discussion.
Since 1987 my firm has been helping retailers improve the performance of their stores. We’ve found that retailers who create a career path for store managers, provide as many educational opportunities as possible, foster frequent communication between HQ and stores and support these all-important people in their work always have the most productive and profitable stores.
In recent years a number of large national chains have done everything they can to “dumb-down” the job of store manager because they are unable to attract and keep talented, hard working people. At the same time other retailers have recognized the value of great store managers and have taken steps to make the most of this valuable asset.