Tuesday, May 24, 2011

The Case Against Category Management – A Radical New Idea -1


In my three decades of providing data processing services to the retail industry, nothing has brought more controversy and ridicule than the suggestion we allow a store’s employees to take on the responsibility of maintaining and auditing the store’s inventory. For the life of me, I have never understood the logic behind this wide-spread conspiracy to prevent it from happening.

In 1982, when my first large convenience store customer explained it to me, I took it at face value. This particular client had a policy of firing every employee after they had been working for him for six months, because he was convinced that all convenience store employees began to steal almost immediately and rotating them out at six-month intervals was his primary program for holding down shrink. Believe it or not, he would go so far as to select employees at random to suffer through lie detector tests in an effort to scare them into being more honest during their short tenure of being an employee of his organization.

I began to see convenience store employees as sub-human slaves whose lot in life was to float from store to store like itinerant fruit pickers, dumb as a box of rocks and undeserving of any trust or responsibility whatsoever. Teach them how to punch the keys on a cash register, smile pretty when the customer walks through the door, and shiver like half-drowned rats when the boss’s name is mentioned.

One of my first customers told me, “When I go into a business deal, I automatically assume the other fella is going to try to get the best of me.” (Actually his vernacular was a quite a bit cruder, but you get the idea.) It should come as no surprise that our brief period of working together resulted in me losing $4,000, and I’ll bet you already know who was accused of being the crook.

Sam Walton was the quintessence of one diametrically opposed to this kind of management and probably best known for the way he treated his employees. Walton saw every employee as a valued asset, a business partner, just as important to him as whoever was his second in command in the early days.

Well, Sam has passed, rest his soul, but I’ve learned a great deal from his actions.  Sam Moore Walton trained each of his employees to focus on pleasing the customer; difficult to do when you think you’re ‘dumb as a box of rocks and incapable of any form of trust and responsibility whatsoever’.

Consequently, the convenience store industry reaped exactly what it sowed; and today, almost every convenience store employee I’ve talked to is either looking for another job, or hanging around because they don’t have anything better to do. If you hide in the corner and listen, you’ll discover most of them don’t even know who you are… nor do they care to know.

You see Sam Walton was an unfinished diamond in the rough. He was a good listener. He would often visit his stores and ask his employees their opinions because he recognized them as the face he would show to his customers; and they loved him for it.

Looking at Sam, and then trying to compare him with some of my clients, was like comparing a peaceful sunset to a raging hurricane. Both wanted to make money, but Sam Walton wanted his employees to make money too. And even more important, Sam wanted them to feel good about it. You see, the more money he made, the more they made. That’s the way his employees saw it.

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