Most people would agree there are reasons why some businesses are…
- hugely successful
- others are just keeping their heads above water and
- others are abject failures
Let’s exclude reasons like the product or the service the business offers. Let’s also exclude economic considerations.
So, what else is there, really?
Well, there are visionary leaders like the late Steve Jobs of Apple; there’s organizational culture such as the culture established at Zappos a number of years ago, under the superb guidance and leadership of Tony Hsieh. And, there are great hiring and training practices, excellent middle and upper management capabilities, an engaged workforce, and more.
To be clear, Mr. Jobs offered amazing products, but it cannot be said that just anyone could have done what he did with those products.
Also, Mr. Hsieh ran a business whose time had come but it was him, nevertheless, who made that company into an internet retailer to be reckoned with.
There are plenty more examples that you are probably aware of.
So, let’s rule out product/service and economic conditions as the reasons for their success, as mentioned above.
The thing is, when you rule out those things, all of the other factors responsible for the success or failure of business, fall into the category of HC, or Human Capability.
Mr. Jobs and Mr. Hsieh had tons of it.
This is important to understand because if you truly recognize that Human Capability will be the sole reason or excuse for your business’s success or failure, then you have a place to start; a place to focus.
That recognition and focus is a very powerful gift to a business owner.
In retail organizations, Human Capability is paramount. One only has to look at what Mr. Ron Johnson did to JCPenney , or what Mr. Robert Nardelli did to Home Depot just a few years ago, to see how much difference one individual can make, particularly if they are in a powerful position.
Mr. Jobs and Mr. Hsieh…good/great. Mr. Johnson and Mr. Nardelli…terrible. The former men did wonderful things for their respective companies. The latter pair were stopped while attempting to drive the businesses into the ground.
But, make no mistake, even those who are not in the highest and most powerful positions can create havoc for your organization if they are devoid of Human Capability or, even if their score is low.
Let’s talk about what you have to do to ensure your organization’s Human Capability is up to snuff, you can guarantee your own success in your retail business. Truly…you can guarantee it.
Although it is slowly changing, it is true that one does not necessarily study and make a plan for a career in retail. Many retail professionals have climbed the corporate ladder and found themselves at the helm. For whatever reasons, they were promoted up that ladder – some with vast amounts of Human Capability and some with very little, or none.
Now would be a good time to bring the Service-Profit Chain into this; to pull it all together.
The Service- Profit Chain was developed by 3 Harvard Professors – James L. Heskett , a Baker Foundation Professor, Emeritus, of Harvard Business School, in Boston, and a coauthor, with W. Earl Sasser, Jr., and Joe Wheeler, of The Ownership Quotient: Putting the Service-Profit Chain to Work for Unbeatable Competitive Advantage.
The Service-Profit Chain was developed in 1994 and is still very relevant today.
In a nutshell, the Service-Profit chain clearly points out that it is imperative to gain loyal customers because it is your loyal customers who bring you the lion’s share of your profit. It further points out that, in order to gain loyal customers, employees must do many things to that end. And, even further, if employees are to do what they must to obtain and maintain the loyal customer base, they themselves must be serviced well by company management personnel…collectively known as ‘the company’.
Again, everything we’re talking about depends on the Human Capability level in your retail organization.
How is it in your organization? You will need to get off the treadmill, or out of the rat race, and do some serious thinking about this. Understanding the level of Human Capability in your organization is where you must start if you wish to improve your success rate; if you want to increase all of your Key Performance Indicators; if you want to build a loyal customer base and brighten your profit picture as suggested in the Service-Profit Chain.
Chances are very good that you will realize there are some deficiencies.
Perhaps I should state it differently; in a more blatantly obvious way. The fact is, whether you realize it or not, there are, most definitely, deficiencies – probably quite a few. Those deficiencies are costing you more than you know. We see it every day in retail outlets all over the world.
Many leaders are in denial. Perhaps they just don’t have any frame of reference or any experience. Perhaps they either have no one to guide them or they ignore whatever guidance is being given.
For example, at one of our Retail District Management Workshops, held in the US, we heard from one participant that every single one of his sales associates and managers were top performers – no exceptions.
We heard that they were pretty much perfect, in all respects, and that their performance just couldn’t get any better. According to this DM, there was no room for improvement anywhere in his multi-unit operation.
This is, of course, ridiculous and this is a leader who will not succeed over time. Do we blame him for that? Well, a case could be made, either way. What training did this leader have? What is the HC of his superior? Etc.
In any event, though, the company will suffer from this leader’s ignorance.
The point is, the absence of high levels of Human Capability will drain your organization, or at the very least, prevent it from reaching its potential. Of that you can be certain.
Figuring out who is Human Capability Positive (HC+) and who is Human Capability Negative (HC-)
If you are a retail business owner or an executive you are in a powerful position within your retail organization. How often do you, as the powerful leader, sit down and take stock of the Human Capability that exists in your organization?
You probably have some performance review processes in place and it’s likely that you have some idea of who your Top Guns (HC+) are and who your ‘needs improvement’ or ‘not meeting expectations’ (HC-) people are.
That’s a good place to start. You can’t fix something if you don’t know it’s broken, right?
But drilling down and coming up with a plan to make your Top Guns even better and to take huge steps to help your HC- people improve or release them…now that takes a full understanding of what you need to accomplish in the long term.
So, let’s begin with your Top Guns.
These are the people who you believe to be very capable. These are the people you believe will only help you succeed and will not, in any way, deter you from reaching your goals for the business.
These people need to be nurtured and celebrated. They need to be challenged and well compensated.
These are the people that will help you move the business forward in every way. Continue to train and engage these individuals as they are your future and they will contribute to the ultimate success of the organization.
Now… for the HC- people you employ: improve or remove.
The critical factor here is determining whether or not these individuals are actually capable of improving to the point that they are HC+. If they are, you need to do the work to make it happen. If they are not, you can’t just sit back and allow them to linger within your organization for even a moment, regardless of how uncomfortable the process may be.
Incapable people must not remain in your organisation. Period.
One rotten apple will spoil the barrel.
Once you’ve made the tough decisions on who can stay and who must go, you have to put a program in place for ensuring that , going forward, you only hire HC+ people. You train them so they have the skills to do only good for the organization; to the point where they will always – and quite naturally – exercise their good judgment while carrying out their duties; to a point where they always have the very best interests of the customers, and therefore, the company, in mind … at all times.
This does not occur by employing wishful thinking, or studying ‘The Secret’, or through osmosis.
This can only occur by building upon, and using, the natural talents of these individuals. And how do you do that? You provide very targeted training, of course.
Let’s start with the customer facing, Sales or Service Associate, Cashier or Floor Associate.
You need products specifically designed to give the newly hired Sales Associate some understanding of what their position entails, some very useful selling skills, and a general outline of what the employer has the right to expect from them…which is quite a bit.
Anyone who goes through the specifically designed material in the Retail Business Academy and is successful in answering the questions and, as directed, speaks to their superior about how things work in the store they’re in then will improve their Human Capability value to your retail organization. This, in turn, increases their overall value to your organization and you can expect them to be a contributing member who aligns him/herself with the goal of obtaining and maintaining a solid loyal customer base.
What about the next level in the organization? What do we do about their Human Capability?
The Retail Business Academy, mentioned above, takes a measured look at the position of the District/Region Manager, as well, and how it relates to all of the positions above and below it.
One of the biggest challenges for this position is the fact that managing remotely is an art which must be mastered if one is to have any success whatsoever. DM’s expect performance from a group of Manager’s with whom they have relatively little face to face contact.
Even in the best situation, the ‘home store manager’, if you will – will only see the District/Region Manager once a week, perhaps two.
In any case, there is no daily face to face contact with subordinates in any normal District/Region Manager role. That just goes against what the position is all about.
Getting back to Human Capability, the District/Region Manager must possess top marks. Sadly, even throughout North America, where retailers have done it all and been very successful in many cases, this position has not yet made its mark; is not yet seen as the pivotal position that it is.
Often, the people in these positions are relied upon to be policemen, security guards, auditors and the like…or they are simply turned into puppets sent out to advise their stores of exactly what Head Office requires. Directives are sent out and compliance is expected.
Rarely, though, is the District/Region Manager actually given the authority, and autonomy, that should come with the title.
This is the Head Office executive teams way of making sure everything happens exactly the way they envision, while relinquishing no authority or control. They really just want someone to get out there with the checklist and tick everything off.
This is not necessarily intentional. It’s not negligent or mean spirited or, in the eyes of some, not even seen as incorrect…it happens because Human Capability is lacking somewhere… possibly in many places… at the executive level in these organizations.
Forward thinking, progressive retail organizations will realize that having high Human Capability in these positions is most advantageous.
Not only will directives be carried out but there will be a thinking, reasoning, motivated individual at the receiving end of those directives who will question and challenge before disseminating the information at store level, so as not to create chaos and not to hinder productivity.
This is a check and balance which can work wonders and save grave errors from occurring. Again, making the case for hiring well and then training to maximise HC.
Middle Managers and Human Capability
When it comes to middle managers within the retail organization, this is where it gets particularly tricky because these individuals may, or may not, have ever worked on a retail sales floor. They may not ever have had face to face experience with customers.
They are, however, in a position to do a lot of damage if left to their own devices.
Of course, many Head Office middle managers do a great job. But, not all of them do a great job and some do an absolutely and terrifyingly miserable job. There you have a serious problem with Human Capability.
How do you run stores effectively and efficiently when the management personnel above them…and I mean every level above them, not just their direct superiors, are not highly competent?
The answer is, of course, you don’t…and can’t.
Every employee, at every level, needs to be at the top of their game. Human Capability must be nurtured and increased at every level.
Membership in the Retail Business Academy, that we mentioned earlier in relation to Human Capability gives you and your teams a wealth of programs, pre-recorded online training sessions, Success Guides on various topics, general management advice, leadership, guidance and inspiration, forms and checklists, DVD’s, compensation plans, interview guides, goal planners, actionable tips and ‘how-to’s for every level of the organization and so much more. All of these positions will benefit from membership:
1) Sales and Service Associates, Floor Associates and Cashiers
2) Store Managers
3) District/Region/Area Managers
4) VP of Operations, Head of Retail, Directors and various other Head Office functions involved in Operations, Marketing, Buying, Allocation, Inventory Control, etc.
5) Vendors supplying the retail industry
With 24/7 unlimited access to a vast array of learning materials and skill building programs, becoming a Platinum Private Member in the Retail Business Academy is the perfect way to begin to increase the Human Capability in your retail organisation.
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You can check out the complete offerings of the Retail Business Academy here.
As a Platinum Private Member of the Retail Business Academy you’ll get access to retail experts…consultants and instructors who can assist with any issue you have, in addition to an avalanche of retail information, ideas and strategies.
We are always here for our Platinum Private Members.
We will be pleased to help you assess the HC in your retail organization. Just contact us to start working together on this huge factor in your success.
It’s our vision to help every retailer, around the world, employ and train those with high Human Capability scores or the potential to get there.
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