Thursday, March 10, 2011

The December quarter has ended on a happy note for many Indian retailers. Some retailers have reported growth in top-lines of over 25% and growth in net profits of close to 50% over same quarter last year. That is indeed a very loud reaffirmation of the strengthening consumer sentiment across the Indian subcontinent. Thankfully for wise economic governance; the Indian economy has remained largely isolated from the global meltdown, and even the whimpering cries of slowdown have been silenced by the rapturous excitement in our malls and high-streets.

When retailers begin focusing on same-store growth; one of the challenges they are bound to face is being able to assign clear and unambiguous levels of ‘Accountability’ across their retail operations.

Corporate vision and strategy will always determine annual goals. However, those goals can be reached only when there are right behaviors demonstrated across the entire retail value chain. Loosely translated, a ‘Right behavior’ is any and all behavior that is required for the moment. A sales person – no matter how tired he or she is - walking the customer to the back of the store to identify what the customer wants, is the right behavior for the moment. Just as the store manager having to make a trip to an other branch or to the warehouse to get the promised merchandise for a customer - instead of hiding behind disrupted warehouse delivery schedules to justify why he is letting the customer down on the promised delivery.

Whatever the growth that retailers are aiming for in the next fiscal; they have to find ways to assign goals ‘fairly’ to their ‘responsible owners’ at all levels – both at the back-end and the front-end. ‘Fair allocation’ of goals at the store level could mean that the store is given sales goals commensurate with its location and performance history; while ‘fair allocation’ at the individual sales person level would take into account an individual’s inherent and trainable strengths and his or her commitment to the store’s goals. In fact, it is the ‘willingness’ of the sales associate to do whatever is required of him to meet the store goals; that determines whether he is being a ‘responsible owner’ or not.

In their anxiety to reach goals, the ‘corporate’ often believes that an individual sales associate’s innate capabilities are adequate; and in this false belief, overlooks the need to equipping them for accomplishing it. It is like an army general issuing instructions to his battalions to charge into uncharted territories of their enemy and pitch the flag of victory – in barefoot; with no arms and ammunition and with no protective gear; only to later moan the shameful defeat and occasionally mourn his dead jawans!

Executives at the national level will have to arm their teams at regional and store levels with skills required to reach their goals. A wise investment in training – to overcome the limitations of innate talent and unharmonious application of wisdom, is a good place to begin.

After all, only right behaviors will beget right results. Any shortfall in reaching goals, under closer examination, will reveal either the ignorance (lack of training) or negligence (lack of willingness) to apply the right behaviors. And the extent to which the team remains farther from its goal is in direct proportion to its excessive and brazen use of wrong behaviors. Numbers, in and by themselves cannot be changed. And numbers will not eternally continue to look encouraging in spite of the limitations of retail staff.

Poor numbers have their levers in store staff either not being ‘capable of’ or ‘unwilling to’ perform as desired. The store staff’s ‘inability’ can be overcome by transferring the skills through proper training and strengthening the right behaviors through constant practice.

However, there is not much that can be done about a salesperson’s ‘unwillingness’ to perform. People who are unwilling to perform despite training, are a liability. In fact, they are a bigger liability than people who leave the organization after training – the latter being one of the major concerns of retailers.

Store managers and team leaders will have to take on the responsibility of not only reaching their own numbers but also helping their teammates achieve theirs. Positive and regular coaching is indispensible in this collective responsibility towards delivering numbers. Retailers should train their managers to become responsible coaches of their teams. Just as professional sports coaches are always on the field watching their wards; store managers have to make themselves available to spend more and more time on the sales floors observing their teammates. They will have to either be ‘praising’ right behaviors demonstrated by their sales teams or be ‘coaching’ them for right behaviors. In that spirit, ‘coaching’ becomes a ‘duty’ more than a responsibility.

In the back-end too, ‘Merchandisers’ should realize that their accountability is never complete without their proactive ownership of what they choose to carry in their stores – the styles, the colours, the designs, the quantities - in short, the whole assortment and merchandise mix of any retailer, is the sole responsibility of merchandisers – until every single unit is sold, preferably at full-price! ‘Buyers’ own the responsibility of ensuring that right quality of the defined SKU are bought in right quantities and in collaboration with the ‘Sourcing’ teams, will ensure that they are bought at the right prices from the right sources. Together with ‘Logistics’ and warehousing, the onus of reaching the desired quantities to the right places at the right time are all different components and degrees of accountability shared across the back-end of the value-chain.

The cycle of accountability for the customer-facing end, thus seems to complete itself when store managers begin to coach their sales staff; and in turn be coached by their area or district managers; who in turn are guided by their national level executives.

Leaders on both sides of this ‘infinite 8’- at whose cusp the ‘Corporate’ it its magnanimity and wisdom meets its ever-demanding and hard-to-satisfy ‘Customer’- have to ensure that accountability is clearly defined; fairly allocated, meticulously managed and generously rewarded.

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