In the fight to drive sales during a recession, store managers’ development can be overlooked. Charlotte Hardie explains why support is vital

Identifying underperforming store managers must be easy, right? Wrong. Just because a store has strong sales, that doesn’t necessarily mean it is run by a strong manager.

And yet finding out those who are not performing to their potential is crucial – particularly in these times of tough trading. Without the correct guidance and support from head office it can lead very quickly to underperformance, increased costs and poor sales.

With this in mind, it’s important not to overlook individual store managers’ career development during a recession. As Debenhams head of learning and development Nicola Debney says:
“We develop the business from within and don’t lose sight of the long term.”

“We develop the business from within and don’t lose sight of the long term.”

Nicola Debney

So what should retailers look for, and how can they help coach underperforming store managers to improve?

Anthony Dance, managing director of area management training firm Outlook Retail, says: “Many retailers tend to focus on underperforming branches, rather than underperforming managers.” Rather than focusing solely on the hard financial figures – although of course this is an important consideration – softer factors must also be taken into account. Measuring store management efficacy means looking at factors such as staff turnover, absenteeism, individual motivation and whether a manager is motivating their store colleagues (see panel). Carphone Warehouse HR director Lynne Weedall says: “It’s vital to look across all measures and that includes everything from customer service to staff feedback.”

Importantly, this is not about blame. Often, an underperforming store manager has been allowed to slip through the net. Like all employees, they require support to develop their skills. Without that, running a retail outlet can become a very lonely job indeed. 

Part of the problem is that during this recession, nerves are running high. As Dance says: “Branch managers are feeling very insecure in their jobs, so many are frightened of anything technical such as filling shelves not being done. Of course this needs to be done, but often they’re not focusing on sales and customer service because they’re focusing solely on standards and procedure.”

Pressure from above

Responsibility for identifying underperforming store managers and helping them develop lies to a large extent with area managers. But herein lies another problem, Dance points out. “When the going gets tough, area managers tend to go into autocratic mode far too much. That’s killing motivation and creativity and knocking performance,” he says.

For that reason, head office should ensure that area managers’ branch visits are more in depth and that area managers are coaching store managers effectively. Weedall says: “One of the biggest elements of their job is to help store managers improve.”

As such, area managers should give them practical help with everything from prioritising workload, motivating colleagues and planning holiday schedules to carrying out thorough floor walks. As Dance says: “They need to get their jackets off and help them.”

Outlook Retail carried out a study of 100 area managers from 13 different retail organisations in order to investigate their attitudes to identifying and developing underperforming store managers. Only seven out of the 100 surveyed had a formal branch manager development strategy – the rest had an ad hoc approach. While all organisations surveyed supported and budgeted for induction processes and training plans for new managers, initial training usually focused on the technical aspects of the job, employment law and health and safety, rather than the management and development of sales, people or customer service.

To that end, head office must also look at ways to offer direct help as well as better support area managers. Debenhams runs specific business coaching sessions with a learning and development team. Debney says: “The team works to support them on a practical basis to ensure they receive the necessary support, are aware of areas they need to work on and ensure they have the right people to talk to.”

Some retailers make the mistake of throwing new managers in at the deep end and leaving them to sink or swim. Many do neither and just end up treading water. As Weedall says: “The first thing is to be absolutely clear about the performance management process. Store managers need to be helped to understand what ‘good’ looks like.”

At all costs, an expectation that
store managers will somehow miraculously develop their own skills must
be avoided.

Through Carphone Warehouse’s performance management process it classifies store managers as red, amber or green. For those who come under the green category it is about talent management, stretching their responsibilities and helping them develop. For those tagged amber, the retailer helps specify their development needs and uses “green” branch managers to develop them. For branch managers who are placed in the red category, Weedall says “it’s about hands-on stewardship” with a performance improvement plan.

Debenhams has a similar system
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Debenhams has a similar system, whereby its more senior store managers are encouraged to be on hand to offer support to the new ones – almost like a buddy system.

Store managers’ development runs the risk of being sidelined in a recession. But if anything, says Weedall, it’s even more important than usual. “There’s only so much you can go for that extra sale and squeeze costs.
It’s also about having excellent customer service and a really strong business at the end of this,” she says.

Every retail business knows it has its underperforming store managers. Knowing it is fine. However, it’s knowing it and not doing anything about it that’s inexcusable – both for your colleagues and your customers.

Rooting out underperformance

Some causes of underperforming store management

  • Expedient recruitment: ineffective succession planning and the need
    to fill a role quickly often results
    in a “taking the best of a bad
    lot” scenario
  • The demands of the managerial
    role have outgrown the capability of
    the manager
  • A lack of correct management development support, putting too much emphasis on self-development
  • A lack of correct performance management action when poor performance is identified
  • How to improve the situation
  • Put performance procedures in the company handbook and have clear procedures for managing poor performance for all managers to keep to
  • Review all performance management tools and processes. If there is a large amount of underperformance across the business, these processes are probably not working
  • Train all area managers in performance management. Helping just one underperforming store manager will recoup the investment

Why does ineffective store management affect sales?

  • The image of the store might be substandard. This might mean that lighting, signage, merchandising,
    or promotional activities are not featured correctly
  • Customer service is often affected. This might be because of a lack of attention to queues in the store, poor handling of returns and queries or a lack of product knowledge
  • Stock management can be ineffective because of SKU inaccuracy

Why does it affect costs?

  • Margin is often affected either through a lack of awareness of highly profitable lines or a lack of focus on controlling wastage in the case of grocers
  • People costs often increase in a badly run store because of high staff turnover, poor attendance and poor planning.
    An underperforming manager will tend to lose good staff members and keep the bad ones. For a good manager, it’s generally the opposite
  • Shrinkage costs are often higher because of poor stock recording
  • Controllable costs in badly run stores are often higher. This might be the result of, for instance, inefficient use of utilities or stationery