Succession Planning in Retail – Promoting from Within
You may even wonder if this concept is reasonable: Succession Planning in Retail \. It is, we assure you. And if you are a Manager in an organization that places high importance on internal promotion – and it should – then you probably find yourself asking “Who is ready for promotion into a supervisory or management role?” quite often.
A person working in a retail store may be deemed ‘not ready’ by upper management and that assessment is usually based on very little interaction with the employee.
When management does not have the opportunity to see the employee in action, on a regular basis, it is difficult to assess their true abilities.
Sometimes even a recommendation from the employees’ direct superior is questioned.
So how do you go about the process of determining which associate will get the next promotion?
While gut feel, or instinct, may often work, you really need to have some supporting information.
Over the next few weeks we will look at some case studies that will help management make those critical internal promotion decisions.
Succession planning can be a daunting task, but it can be made easier with a step-by-step process in place.
To start with we are going to look at:
Any associate who is being considered for promotion to a supervisory or management level must be able to look at a situation, ask some relevant questions, analyze the answers and take an in depth look at what it might take to correct, or improve, that situation.
Simply put, the employee must possess analytical skills.
If an associate is not able to drill down and ask quality questions rather than just taking the situation at face value, then that associate is not likely going to be successful in a supervisory or management role – where everything needs to be continually questioned and analyzed in order for the business to grow and prosper.
You can use this case study to ascertain whether your candidate for promotion can come up with some relevant questions that need to be answered before a plan for improvement can be made.
After reading the case, you will see some examples of questions for consideration. These are just a few of the many questions that should be asked.
Case Study: The Acme Retail Company:
Acme owns and operates 75 retail stores across the country. For several years the majority of the stores have been profitable.
This particular year, however, one of the highest volume, most profitable stores is not doing very well.
Management must determine what has caused this downturn and identify the steps required to correct the situation.
This store is located in a highly desirable location in a very good mall. There is high growth in the area that the mall serves.
Many new housing developments have been built in the last two to three years.
New retailers are leasing space in the same mall and the landlord is able to demand very high rent.
There are no significant job losses in the area and no economic decline affecting the area.
The store is old but is not showing significant signs of deterioration and is not in need of a major renovation.
The employees are very comfortable in the store – treating it like a home away from home. Their friends stop in regularly to say hello.
The product is highly desirable to consumers. This store is scheduled to receive product on Mondays and Thursdays.
They receive approximately the same amount of product as the other high volume stores.
The store is the furthest away from the Distribution Centre and, therefore, often receives product very late on Thursdays and sometimes does not receive it until Monday.
This has been happening more and more often since the new delivery company was hired approximately six months ago.
The company invests heavily in promoting the product and services offered by the stores. Advertising is done by way of direct mail and newspaper advertising.
The company does maintain a database of customers but the email list is not very accurate so emailing to the list has been used only occasionally and without much success.
In all print ads, all store addresses, in that area, are listed.
The Marketing department is currently looking for new places to advertise because some of the newspapers they used to advertise in have gone out of business or have changed in an attempt to gain readership in a different market.
The company wants to cut down on direct mail because, with the number of households increasing, it is getting very expensive to get the direct mail piece into the hands of all potential customers.
Price is determined by Head Office. There is no movement on price at store level. Only the Buyers can initiate a markdown.
The company uses state of the art information systems. Currently the Store Managers receive only overall sales results, by associate.
Some Store Managers have requested certain reports that they believe would help them immensely in tracking and monitoring results of their associates.
They want information to use as a coaching tool for certain desirable selling behaviors.
Although the system is capable, the company has resisted making these reports part of the daily and weekly report package.
Succession planning in retail is important for all retailers.
Most of the stores are managed by long term employees.
This particular store has sales associates who have been working at that location, with the same Store Manager, for some time.
The employees get along very well; they feel like a family and they are accustomed to how each of their team mates works.
All of the associates, and the Manager, socialize outside of the store quite often. The Manager knows the associates well.
Very few new people have been hired in the past 18 months.
The Manager does not like confrontation and his employees treat him as a good friend.
One of the newer employees has tried to tell the Manager that he has some ideas about how to improve performance in the store but the Store Manager knows that any ideas put forward by this new individual will not be looked upon favorably by his longer term associates so he has not spent much quality time with the newer employee to find out what the ideas are.
The new employee has talked to the Human Resources Manager as he feels like he is not being regarded as a part of the team and feels that the Store Manager lets the other employees pick on him.
The Store Manager believes, strongly, that his team is doing their best and is unwilling to have performance discussions with them as that would cause hard feelings.
He believes that circumstances beyond his control are causing the lack of sales performance.
Succession Planning in Retail – Promoting from Within – Questions for consideration:
Place – Is the store being well looked after? Is it inviting to the customer? Is Visual Presentation excellent?
Are all company visual standards, including cleanliness and maintenance standards, being met?
Although a major renovation may not be necessary, could it use some paint and a minor renovation?
If employees are that comfortable (seeing the store as their second home) they may not be keeping up to standard in terms of organization and cleanliness and the Store Manager may no longer be paying much attention to this area of the business.
If overall visual presentation is lacking customers may find it messy, cluttered and generally uninviting.
The Store Manager needs to remain objective about the appearance of his store and whether or not standards are being met.
He cannot let friendship and complacency get in the way of what is being offered to the customer in terms of store appearance and the shopping experience.
He must hold himself, and his employees, accountable.
Product – Is there some reason why the deliveries to this store are often late?
Is the lack of product (that product that should be delivered Thursday but does not come until Monday) impacting the ability to do business on the weekend?
Exactly how often does the new delivery company deliver the product late and why is this allowed to continue?
Is the Store Manager not aware of the seriousness of this issue? Does he not believe it is making a difference to the store’s performance?
Does he believe it is not up to him to challenge the individual in charge of distribution?
The fact that deliveries are late could, indeed, have a huge impact.
If the product is not in the store and available for sale when the customers are there, no doubt some sales will be lost.
The Store Manager should be raising this as an issue with his Regional Manager who could escalate the concern to the head of the Distribution department, or with the delivery company itself.
He must get it resolved and ensure his product is received on time to stay competitive.
Promotion – Why is the email list not being well utilized? Who is responsible for the list not being properly maintained?
Are his associates collecting the necessary information? Are they entering it into the database properly?
Are some of the homes in the market area for this store being left off of the direct mail list in order to save money? Which newspapers went out of business?
Were those newspapers widely distributed in the market area?
Now that the company is using different newspapers for their ads, are this store’s customers still getting the message?
The Store Manager must get involved with promotion to some degree to make sure that his store is still getting the same benefit from advertising as it did previously.
If he ensures that his employees are maintaining a credible email list then he can ask for special emails to his customers.
He also needs to look into the area being served by the new newspapers to ensure that the same market area is still being covered.
He should also make sure that brand new customers in his growing market area are being specifically targeted.
Price – Are the prices the same, or better, than competitors?
Does this store offer customer service to the degree that customers would see the price as better due to the value added?
If pricing is not an issue in the market, then customer service must be the value add.
The Store Manager must be certain that the service in his store is much better than other stores, not just moderately better.
He should be shopping the other stores in the market regularly to see what their customer service is like and then come back to his store with ideas to make sure his store stays ahead in terms of the customer service offered.
Pixel – Is the company getting the best it can get from its technology?
Has the company given a reason for not implementing some of the Store Manager’s ideas for reporting? Are those reasons valid?
Could a better argument be made by the Store Managers? If so, why haven’t they made that argument?
It is possible that the information systems could provide more and better information to Store Managers.
Sometimes information systems professionals do not see things from the user point of view and may not be studying the situation seriously enough.
It is up to Store Managers to make a strong business case, to their superiors, if they really feel that they can increase store performance by receiving certain additional information.
People – Does the Store Manager have the respect of the employees? Is this Manager too close and too friendly with his associates?
Does he treat some associates better than others? Does he lead by example in sales performance? Is he monitoring each individuals sales results and all kpi’s.
Does he know who is performing and who is not? Is he rewarding the performers and coaching and/or disciplining the non performers?
Is he paying attention to the needs of the newer employees? Why is he not willing to discuss the newer employees’ ideas?
What proof does he have for his belief that the lack of sales performance is caused by external factors that he cannot control? What are those external factors?
In this case study, this seems to be the most relevant pillar.
It could be argued that the Store Manager and the employees have become too friendly and that the Manager has lost all objectivity regarding the performance of each team member.
The Manager appears to be too close to the situation to analyze it properly.
The fact that he believes the lack of performance is due, solely, to external factors and that he and his team are doing everything they can means he is not open to the fact that there are actions to be taken, inside the store, that will increase business.
What was done:
The Regional Manager had a serious discussion with the Store Manager regarding accountability for the poor performance of the team and the store.
He discovered that the Manager was somewhat bored in his position as it was no longer challenging and he felt that he was no longer making a contribution.
The Regional Manager arranged a meeting which included the Store Manager, and representatives from the marketing department, the information systems department and the human resources department for a round table discussion regarding the performance of this store.
Together they decided on the following:
1) Get the basics down pat.
Associates must be held accountable for the general maintenance and cleanliness of the store and that a checklist would be used at opening and closing each day to ensure all tasks had been done.
The Manager would do spot checks every day and follow up immediately if any area was not being maintained up to standards.
2) The Manager was to review individual sales and KPI performance (from a manually generated report at this point) weekly and have a discussion with each associate to provide feedback and/or coaching.
The Regional Manager would coach the Store Manager prior to the first few weekly discussions.
The Store Manager would be held directly accountable for store performance.
3) The marketing department representative agreed to investigate the possibility of email blasts to the stores market area if the Store Manager committed to ensure the email list was 90% accurate.
The Manager would accomplish this by providing training to the associates and check each entry until he felt comfortable that all associates were entering the data properly.
Also, marketing would find out more about the newspapers readership to ensure they were getting the most they could from that form of advertising.
To help get this store on track, they agreed to invest in additional direct marketing one time only – a slightly less expensive piece would be sent to the entire market area and the results would be carefully monitored.
4) The information systems department representative agreed to meet with several Store Managers to better understand what they would like to see on the reports and, if feasible and approved by senior management, information systems would make required changes.
5) The Store Manager was to speak with the Regional Manager weekly, following discussions with sales associates, to determine next steps regarding any associate who was not performing up to standard.
6) The Store Manager admitted that he felt too much like a friend and no longer like a leader to his associates.
He decided that he needed to make changes in his behavior to put things back on track.
He said he realized that he could build a strong team without abandoning his leadership role.
The Store Manager and the Human Resources Manager would have telephone discussions, weekly, to assist the Manager in modifying his leadership style.
7) The Store Manager decided to hold short meetings with each associate to get ideas for increasing store performance.
This way all employees, the old and the new ones, would have the opportunity to contribute to the overall plan.
Also, the Store Manager would ensure the newer employees were not being treated any differently than the older employees.
8) The Regional Manager agreed to meet with the Distribution Centre management and correct the problem of late deliveries.
How it worked out:
The plans were put on paper and timelines were established. All parties did what they had committed to doing. The store’s results began to improve.
Some associates improved their performance drastically once they were being held accountable and praised for exceeding targets.
Also, when they realized that other departments were contributing to help their store, they became much more involved; new ideas started to flow.
One employee did not make it through the weekly performance discussions; he resigned when he realized the expectations of the position.
The Manager began enjoying his position once again as he was now equipped with tools to help him meet the challenges he faced.
The Regional Manager believes that the Store Manager and associates are now motivated to continue increasing sales performance and to look for new and different ways to make that happen.
Of course, there are many other details that could have been included in this case study but, in the interest of keeping it brief and manageable, only the most important issues have been covered.
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