As a consultant I have been in and out of many single and multi-store retail environments. Each store environment is different as the culture mirrors the store owners/operators. That is the true beauty of retailer owned/operated stores compared to the clinical feel of some larger organizations. Owner operated stores have that special feeling of family – the customer feels it and responds with their wallet.
Like parents who keep information from the kids; owner operated stores will sometimes keep important information from store staff to the store’s detriment. What I mean by that is that the owners and key managers keep information about the store’s budget, goals and sales data secret. I have learned that there are many reasons for this decision. Most retailers choose not to share sales data because grandpa didn’t share it and neither did dad. That information hits too close to home and those folks fear that their employees will be able to figure out the owner’s finances. Is this possible? Not easily, but to some degree. Other owners feel that sharing that data will make it possible for their competition to get their hands on the information. Is this possible? Yes, but in this information age the data is out there for the competition to parse from other businesses just like theirs. I would also argue that by not sharing this information you are leaving it up to the employee’s imagination. They will assume that every dollar that comes in goes in to the owner’s pocket. That is more dangerous than sharing the true data.
Owners will lose a little privacy sharing sales data. But there is so much more to gain by sharing!
Let’s talk about what is gained when you start sharing sales goals and results. It is best explained through an example. I walked in to a single store operation in rural Illinois which had been in business for three generations. The current store owner took over for his father who had inherited the business from his father. The store was running flat to the previous year and was actually retracting from their high three years prior. This young man started focusing on budgeting, sales goals, end-cap merchandising and impulse. He also put together a great product knowledge and sales training plan to achieve growth in average ticket sales. He then did something that was unheard of in his organization. He shared those goals with the store teams. Neither his father nor his grandfather had ever done so, in fact it was forbidden. He held sales information meetings. He set goals for each department. He created a grid in the employee break area that showed each day’s sales goal. When the sales goal was met or beaten the number was written in black when the sales goal was not met the number was written in red. It was easy to see how the store was performing at a glance. If the store team achieved a month that was ‘in the black’ he rewarded the store with a pizza party. When the store missed a month the entire team felt it and talked about ways to turn the numbers around. Sounds pretty simple? It is, and it is highly effective!
As I walked from the front of the store to the back room the store team was buzzing with excitement. There were only two hours in the sales day left and they were close to meeting their goal. The manager on duty shared updates over the walkie talkies keeping everyone focused on the goal. Everyone knew how much they had to contribute to meet that number! When the goal for the night was met with an hour to go the store broke out in a cheer. It was tremendous to see that level of engagement surrounding the numbers! Each department had their own goals to meet and each department head was aware of the goal and knew exactly where they stood. I can tell you that this team was not going to miss their sales goal, they were on a mission!
We know that employees are much more engaged when they feel like they are an informed member of the team. We also know that happier employees make happier customers. Keeping sales data secret is disengaging and harbors distrust between management and store staff. Sharing that data creates alignment with a shared feeling of accomplishment when the goals are met and a shared feeling of need when they are not. These are powerful emotions that drive the employee’s true engagement in your business. Please don’t hold this information hostage; you are missing out on true alignment! Set goals and more important share those goals! Set milestones and let the teams know when they have met those milestones so they can share in the celebration. This type of sharing creates a culture of achievement and pride in the store’s accomplishments! More important, it helps drive results.
On a final note, if you have never communicated numbers to your team before, make sure to share the whole story. It is imperative that your people know that for every dollar that comes in a large percentage of that dollar is spent on things like inventory, payroll, rent, utilities, Uncle Sam etc. This will help manage their understanding of profit and expense. If you neglect to share the whole story your people will assume that every dollar that comes in goes into the owner’s pocket. As mentioned above, that is dangerous misinformation.