By Bill Scott, President, StoreReport LLC
For over three decades, I have tried, in vain, to identify the method that guides most convenience store operators in the business of managing their employees. Is there a standard manual somewhere that I have neglected to read? Some empirical research that could assist employers in the employee management process? Have I missed a “helpful” plan that has been passed down from one retailer to the next; a seminar, a meeting, a tablet engraved in stone… what?
What we do know is that there are three critical success factors that determine whether a retail business will succeed or fail. Only three, mind you, and without an understanding of these three absolute necessities, retailers don’t stand a chance for survival, much less to excel in their efforts. Oh, they may succeed all right, but it will be a mediocre success at best, and they will continue to struggle in their businesses every single day.
Attention to these three prerequisites costs little (if they cost anything at all), and they are so important, so conclusive, they should be etched on the walls of every retail store manager’s office in America.
I declare the first pillar of the foundation of a business is leadership, and it supports everything else in their bag of tricks. I have worked with hundreds of convenience store operators, and it is sad to say, I have seen more examples of weak leadership in their day-to-day activities than in all other retail operations combined. To put it bluntly, if engaged in the business of war, most convenience store operators would whip their soldiers into battle with no weapons, no training, a defeating negative attitude and virtually no support whatsoever.
Strong leaders are created. They are seldom, if ever, born.
Leaders are recognized not by how they perceive themselves, but by how their subordinates perceive them.
Ego has no place in a manager’s personality, nor control, sarcasm or paranoia. These are the traits that guarantee failure in both a person’s business and personal life. The practice of treating employees with disrespect, has been going on for so long, it’s seldom talked about, much less corrected. Am I pitying employees? No, I see enough pity in the loss of income by the mistakes made by general management already.
Have I gone too far? You decide: I worked with an oil jobber and convenience store operator in 1983 that told me, “I go into every business relationship with the idea that whoever I am dealing with is dishonest, manipulative and downright crooked, and I am usually right.” And to prove his hypothesis, he went out of his way to cheat me out of $4,000.
In one of my books, I give an example of another retailer that hated his employees so much, he routinely pulled terrified clerks in for polygraphs just to scare the dickens out of them. He adhered to a policy of firing them on their three-month anniversary, simply because, as he stated, “All employees steal after the first ninety days.”
In another situation, the general rule was “minimum wage for every convenience store employee,” regardless of their capabilities, their loyalty or their potential. In my five-year association with that particular business, before they went out of business, I cannot recall one instance where employees were given credit for anything they did.
Now, how do you think the employees of these three businesses regarded their bosses? Did they respect them for their mistrust in them? Of course not. How about their compassion? Nope. Do you think they gave one tinker’s damn whether the business was successful or not? You guessed it. They hated their employers, grumbled among themselves on the job and did everything they could think of to live up to the assessment bestowed on them by management. They literally became what management expected, and as a result, management got precisely the results they bargained for. It was a perfect recipe for failure, and in that environment, management enjoyed all the support they could stand.
“See? I told you so,” they proclaimed. “You can’t trust these people. They are as dumb as a box of rocks. Turn your back on them for one second and they will steal you blind.”
The result of this kind of thinking ends with employees being treated like slaves, waiting until their clock is up, rushing home and spending the rest of the evening griping about how much they hate their dead-end jobs, and reinforcing their superiors’ assessment that they are worthless, dishonest and undeserving of even the slightest regard.
This kind of attitude is highly contagious. Not only does it poison your employees’ minds, it filters up to store managers, supervisors, upper-level management, the CEO and boomerangs back down to customers and suppliers.
People may work because they need money, but they EXCEL in their work because they are hunger for ‘praise.’
Anybody who has ever owned a pet knows how this works. Your dog stays around your property because you feed it. When he manages to learn a new trick, you give him a treat. If he does something really outstanding, you lavish him with praise. An old friend once told me, “A horse will run until her heart bursts in her chest if that’s what you want.” The sadness is not that I compare employees to dogs and horses, it’s why do we demonstrate less regard for our employees than we do for our family pets?
The first step in saving your business is to fix this before it is too late.
If this seems demeaning to you, get over it. Employees need guidance, not force, scolding criticism and disrespect.
Think of your employees as a string. Have you ever tried to push a string? You can’t do it. The more you push, the bigger the pile gets. The problem is with the pile, not the string, and the reason for the pile is that you are working on the wrong end. If you go around to the other end and pull, the pile ‘magically’ disappears.
Give your employees something more than a paycheck to get them moving in the right direction.
Give them something to build on. I have long advocated a multi-level, hierarchical structure; not a single structure consisting of one store manager with an unruly mob to control. Create a superstructure in every store, with incentives to move up within the organization.
Employment has two sides. If your employees owe you for the paltry sums they are paid, you owe them for the honesty, integrity and service they provide. Show me an employer who thinks the buck stops at the pay window, and I’ll show you an employer who is not getting what he paid for.
In one of my books, I talked about my job in the Air Force while working on guidance systems for missiles. I talked about positive and negative feedback loops: “Neither ‘positive’ nor ‘negative’ represents desirability. Negative feedback loops tend to slow down a process, while positive feedback loops tend to speed it up. Positive feedback is used in certain situations where rapid change is desirable. Negative feedback keeps positive feedback from running amok.”
In every organization, at every level, a series of positive and negative feedback loops are already in place, even if you had no role in creating them.
If management does not seek them out and take hold of the reins, they’ll find themselves sorting wildcats in a burning hayloft.
From the first day a new employee starts work, give them milestones and a concrete reason to get to each one of them. Be careful about rewarding employees with money for doing the job they were hired to do. The problem with cash incentives occurs when they don’t get them. It releases a venom within your organization that seeps into the attitudes of every employee in the store. Reaching these milestones should be celebrated. Donkeys pull a cart using a carrot and a stick, but unless you have employed a herd of donkeys working for you, forget about it.
A tiered superstructure in every store should entice employees to move up to the next level.
On the very first day, an employee is given a position of ‘trainee’ with a two-week probationary period. This not only provides an incentive to move up, it gives employees at the next level a sense of pride for advancing above the stigma of ‘trainee.’
The main job of the trainee is to do the grunt work… clean the toilets, mop the floors, help customers and their superiors. (In this case, everybody is their superior.)
The probationary period for a new hire, is not only practical, it also acts as a filter.
You want this level to be tough, and it will serve as motivation to reach for the next level. Can you imagine how our military would work without some type of structure and discipline? Well I’ll tell you how. It would be like daycare. “Sgt. Jackson, Pvt. Scott put sand in my rifle.” I have spent more time in convenience stores than most CEOs have spent in stores of their own, and I promise you, in MOST stores it’s more like daycare than it is like business.
When I went through my basic training in the U.S. Air Force, it was the hardest thing I had ever done during my short seventeen years, but, strangely enough, I loved it. And, looking back, I believe I liked it because I felt, no matter how harsh the environment, it was for my own good.
My technical instructor (TI, comparable to the DI in the Army) singled me out the first day. On several occasions he would put his face inches away from mine, call me dirty names, and promise me a living Hell.
My TI vowed that I would be the first to wash out, and many did wash out. “Scott,” he would scream, “you will never make it. I intend to make it my mission in life to see the U.S. Air Force returns your worthless carcass back to your mommy in a pine box.”
I can’t really explain why it happened, but the more he screamed the more determined I was to prove him wrong. Over the course of Basic Training, my feeling for my TI went from utter hatred to one of tremendous respect. At graduation, he made it a point to hold me up as an example of a skinny kid that had been “miraculously transformed into a brave and capable soldier.” I loved him for that, and I will never forgot him, nor what he did for me. He helped give me a purpose.
Slow learners had it rough. I remember one instance when an overweight, trainee collapsed while making the daily five-mile run around the track. On the final lap, after I had passed him twice, I stopped, helped him to his feet, and supported him until we made it back to the finish line. I expected another kick in the rump from the TI, but what I didn’t know at the time, it set an example that we needed to work together as a unit in order to succeed.
At some point in the ordeal, we began to train ourselves. A job had to be done and we learned the best way to do it was through cooperation. After graduation, we jeered and laughed at the teams of new arrivals, calling them “Rainbows,” because of their colorful civilian clothes, and with glee we warned them of the Hellacious days to come.
Later in life, when I became responsible for fourteen sales people, I used some of those lessons to create a team that was not only competitive, but they were also supportive of each other. When the time was right, I would throw chalk at the chalk board, scream at them, and they would hit the streets to make me proud of them. But these tactics won’t work unless you have their respect and adoration, else you become just another monster in their lives.
Later, after I became the top salesman in a different job, I quickly succumbed to the idea that I was better than everybody else, pursued the rewards, and left my peers behind.
Then, a funny thing happened. Suddenly, my friends ignored me. By becoming the best salesman in my division, I also became the loneliest. I was cut down to size when my immediate supervisor told me that my superiority complex was an overall detriment to the effort. My peers just gave up, and my success dragged the entire team down. A change occurred in me from that day forward. I realized that by sharing some of my ‘tricks’ with my peers, by showing compassion for their inadequacies, I moved back into the team, and we, not just me, excelled as a unit.
Business is most definitely a ‘team sport’. Of course, we cannot prepare convenience store employees using the methods of a drill sergeant in the Air Force, but we must form a similar hierarchical super-structure to guide our employees in their daily activities.
The probation period I talked about earlier serves to weed out the weak, but it also does something else; it encourages the team to help lift the new hire to the next level, and the bond created by acceptance within the team enforces loyalty, courage, passion, compassion, ambition and an environment of trust. Build the right team, and you can’t break them apart with a crowbar.
I think this frightens a lot of store owners. I’ve been told repeatedly over time, “I don’t want my employees to know what other employees are doing. Then they’ll gang up on me. As long as they are clueless, it makes them easier to control.”
Control? Controlling takes work. Teach them to control each other and your life will be easier. Once I saw an employee snatch a Snickers off the shelf when she thought no one was watching. A clerk behind the register called her out: “Hey, I hope you intend to pay for that. I don’t want it to show up missing on my shift.”
“Sounds to me like you expect me to lower my prices and pay higher salaries.”
Don’t stop there. Think about it. Did you leave turns and profit out of the equation? If selling for less and paying employees more, leads to more sales and greater profits do you really care what your employees make? Most retailers have become so fixated on costs, they are missing the bigger picture.
The Function of a Super-Structure
Trainees – Using my method, trainees are managed by the store manager, and receive assistance from the other workers in the store. At the lowest level of our super-structure, new hires learn the layout of the store. They learn how to properly stock the coolers, clean the toilets, mop the floors, rearrange the candy, put pegged items back on their pegs, straighten out facings so product names can easily be identified, make sure items have the correct pricing labels and assist in receiving and dispersing new stock throughout the store. They discover firsthand what sells and what doesn’t… all of the things that will help them as they are “promoted” to the next level of ‘cashier.’
Cashiers – At the cashier level, employees are given access to the company’s two, most valuable assets: cash and customers. In addition to ringing up sales, cashiers are given the responsibility of training each other, and assisting in the training of new hires. At this level, the issue of responsibility takes center stage. A small ceremony should take place where this responsibility is passed on as a reward. Nothing big, simply a recognition that an employee has made progress and has passed the probationary period with flying colors.
Cashiers should be given notice that they are now ‘partners’ within the enterprise. Instilling a sense of ownership prepares employees to take active participation in advancing to the next level. How do you do this? Easy!
What do you do when you meet someone you really like and you think you might like to have that person as a friend? If you’re smart, you’ll get them to talk about themselves. What do they want? How did they get to where they are? What are their dreams? Train your store managers on how to do this. Yes, I said train. How many of you have a training program designed to further your employee’s career? Everybody likes to talk about themselves, but what they don’t know is that the astute person doing the interviewing is looking for a hook, a connection that establishes some vehicle to form a compatible relationship. “Oh, you lived in Hawaii? I’ve always wanted to go there,” or “You worked at Sears? So did I!”
After you have established a connection of some sort, your managers next move should be to tell the company story. “When Mr. Smith started our company,” (the word ‘our’ establishes a sense of belonging to a team), “he wanted to start a business that would benefit the community. That’s why we sponsor the local Little League.”
Histories and Stories Establish Value
If you want your employees to have a sense of ownership, establish a personal connection through company stories. Tell them about the struggles, the obstacles, the frailty of humble beginnings. Make them a part of that history: past, present and future. Get them excited to be part of something great and instill in them a sense of belonging.
Make them understand that their enthusiasm and excitement can benefit “their” company, and the importance of their attitude in serving customers, smiling, saying “thank you,” inviting them to come back, finding ways to delight, impress and surprise customers every day, and generally make the customers feel ‘right at home.’ Teach them how to give ‘sincere compliments,’ not flattery. Flattery is artificial and is recognized instinctively.
Once, I was in a checkout line at a local grocery store where the cashier was obviously having a bad day. She was overweight, older, her hair was messy and her dress was wrinkled. I struggled to find something nice that I could compliment that poor creature on, and then I finally found it. Taped on the front of her cash register was the cutest picture of a toddler I think I have ever seen, and I told her so. Like magic, suddenly she transformed right before my eyes. A big smile almost cracked the layer of makeup on her wrinkled face as she told me all about her first grandchild that apparently no one else had noticed. I looked back as I exited the store, and I saw a changed woman. I took great pride in knowing I had virtually made her day. The incident helped to change my life. I began to wonder, ‘How enriched her life would be if she practiced my method on her own customers? How much would her value increase with regards to her employer?’ And, I’ll bet you a dollar, if she ever serves me again, she will remember me.
My wife and I have turned this into a game. When we find a clerk at the end of a checkout line with a scowl on his or her face, we race each other to see who can think of an appropriate compliment first. The first one to make a move wins, and gets to practice their expertise on that person. You don’t have to have a Ph.D in psychology to be good at it. My wife cheats though, she keeps me busy moving the groceries onto the conveyor belt, but that’s okay. I taught her how to do it, and I take pride in how well I succeeded in teaching her.
Teaching others how to dispense a dose of sincere compliments to make new friends is a lot of fun. You should try it someday. Maybe it will change your life the way I changed my wife’s.
Retailers come in various sizes, leadership techniques must change accordingly
In a one-store retail operation, the owner of the company may command all of their employees. With the opening of the second or third store, managers come into play. However, by the time a retailer opens his eighth store, things get more complicated. The idea of ‘supervisors’ comes to mind, things change dramatically, and an already bad system may set you on a path to total failure. Most businesses fail because they do not take the time to make adjustments for small problems as they occur.
When I use the word ‘system’, it does not mean technology alone. A system is the method by which the entire business functions. For instance, if you have what you believe to be the greatest retail, computer system in the world, if you lack a ‘system’ for keeping your restrooms clean, your stellar computer software is not going to solve that problem. A system is ‘a network of connected elements forming a complex whole.’ It’s the basis for the foundation on which you grow your company. Systems are built on conditions which are constantly in a state of flux. These conditions result in assumptions and the owner of a business needs to stop occasionally and take stock of assumptions that should have changed as the company grew—but did not change.
When I see retailers continue to run their companies as they did 20 years ago, it’s downright frustrating. People have a normal aversion to change. The tendency is to stand by the axiom, “If it ain’t broke don’t fix it.”
It is a well-known fact that every three years your business will face a crisis. If you started your business more than three years ago, it’s a good bet you are working with a crippled system and you may not even realize it. And this includes, in no small part, your system of managing your staff. And here’s the worst part, your loyal employees will break their backs to see that you only receive the good news.
I have suggested two weeks in the ‘trainee’ phase, but you may need to adjust this period to meet you circumstances and requirements. The next level of ‘cashier’ is the most important milestone in the process of establishing effective leadership. The new hire has come through the fire of being a ‘trainee’ and you will decide whether that employee is one you want to have on your team. If you decide in the affirmative, you and/or your staff have their work cut out for them. It is your responsibility to turn that lump of coal into a diamond.
What you may lack may be a written down, ‘Leadership Development Program.’ Your new cashier may end up being nothing more than a cashier for the rest of time they work for you. There’s nothing wrong with this, but they must make that choice, not you. And THEY make that choice by agreeing to hard work and dedication to their job. Tell them about it. Make it clear.
“Okay, you guys. We gonna climb over that wall, Nichols is gonna lay down cover fire, and the rest of ya’ll are gonna storm that position and take out the mortars and sub-machine guns. Some of ya’ will be carried out in body-bags. Ar’ya with me?” And the team yells, “Hoo-ahh, Sgt. Major.”
A little too much drama perhaps, but you get the idea. You’re going to tell them it’s hard, you’re going to explain to them why it’s hard, and you’re going to acquire their permission to work them to death for store, for company and for their future career…. Or, you can leave it to their imagination, ‘I’m going to pay you the least amount I can get away with, offer you no perks, ask you to do things that are demeaning to you, work you to death with no thanks whatsoever and let you poison the minds of your peers with negativity until you all quit and find a decent job with better pay somewhere else.’
Ask yourself this question, “How would I like to work for me?”
Trainees work to be accepted by management and their peers. Becoming a cashier is a reward for getting there. The next advancement is Section Manager.
Section Manager – Companies must grow in order to survive. Employees must grow in order to be successful.
The next step above Cashier is Section Manager. As I said earlier, some employees will stop at the job of cashier. That’s okay. But if you want to keep your employees happy, you have to test them with ambition. You must offer them a path to something better. Is being a cashier what they really want? Or is there a way to get more out of them? And in the process it will ensure their longevity with your company.
Assign a section of your store to a cashier and give them the title of ‘Section Manager,’ and a small raise in pay. The size of the section should be an area the section manager is capable of managing. A section manager is a cashier that has been given the responsibility of keeping the section clean, removing dead or out of date stock, ensuring the facings are pointed toward the customers, and the pricing labels (if present) are correct, work with the manager to be sure out of stocks are reordered, and overstock is put in the storeroom. In a typical case, a section manager should be able to police their sections during their shifts, when the store is not busy.
In a store that is managing inventory by item, the section manager should scan the items to be sure the on-hand amount matches the computer, and report any discrepancies to the store manager and/or the appropriate supervisor. Feedback to the supervisor allows the section manager to provide valuable information about the movement (or non-movement) of inventory, and should be used in ordering.
Section managers should compete for the best ‘section’ on a weekly or monthly basis, and receive perks for being number one during the period.
Supervisors – Supervisor is the next step in our hierarchical structure. Supervisors work for headquarters and assist in managing store managers and section managers. By excelling in their jobs, supervisors can be promoted to upper level management.
The idea of this hierarchical structure is to establish order within the organization, offer incentive to your employees and ensure growth and prosperity within your organization. The cost in dollars of setting up this structure is insignificant. The chances are you already have the players in place to get started without any outlay of additional capital, and the rewards will be substantial, as we grind employee turnover to a slow crawl, instead of the mass exodus it is today.