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Letting Go—And Growing Your Biz

Monday, November 2, 2009

Letting Go—And Growing Your Biz(GIFTBEAT)

Know how important it is to loosen your grip on the management reins so you can focus on growing your business, but just can't step away from the lead position? Andy Buyting, owner of Green Village Home & Garden in New Brunswick, Canada and author of The Retailer's Roadmap to Success, understands your dilemma. Here, he provides suggestions for letting go and helping ensure your store's future success.

Q. Why must retailers focus on creating more time to work on - not in - their businesses?

A. A lot of small business owners are trapped in their businesses, doing day-to-day tasks that chew up time but don't allow them to add value to and grow their businesses. You might read a magazine article or take a business course and come away with great ideas, but get back to your business and there's no time to implement them.

You only have one product, your business. It's a product that you will eventually sell or may pass on to your sons or daughters. You want to grow it and make it the best it can be—to add value to your product so it is worth something down the road and worth more next year than it is today. Look at businesses that are bought and sold, and the people who do that for a living. If a business is too dependent on its founder, it is not an attractive deal [for a buyer]. You want to build a product [your business] that will have value without you in the picture. That means you have to work your way out of that business…so you can step away and think strategically about the business.

Q. How can retailers begin to "work their way out of" their businesses?

A. It's the biggest challenge for retailers—and the best thing they can do. You have to have a shift in your mind-set, and start finding the right people to work into management or supervisory positions at your store. Your end goal [might be] to have an assistant manager so you can take weekends off and know your store is being taken care of. A lot of retailers I've talked to say, "I leave the staff to manage the store but they don't do as good as I do, so I jump back in." You have to educate [employees], coach them and instill them with your culture so they think the same way you do.

I'll bet you have good, quality people within your staff right now that you may not be giving a chance to shine. If you look at them in a different light, you might see more potential. There should always be some on your team who would love a promotion, more of a challenge. It's human nature that people generally want to do good and achieve. I had a young lady working in my store who wanted a management position. I hired someone else, and that person left. The same young lady said, "I really want to do this." So I put her in the position on a trial basis. She's a 23-year-old with eight staffers, many of whom are twice her age. She has just shined! I have been surprised by my employees time and time again.

Q. How can store owners increase their trust level with newly-promoted employees?

A. When you give people the responsibility to operate your store in your absence or take on a task, you hand over the reins but still watch over and monitor them. Don't give a staffer the responsibility to organize the work schedule but then take it back next month. The first step for a lot of small retailers is to hire an assistant manager. Train and watch over that person for two months. There's a period of teaching and coaching, then mentoring where the employee can come to you with questions.

You have to give staffers responsibility, the flexibility to fail once in a while and to take their own chances. It's part of the training process. They will mess up from time to time, but if they know they are responsible for fixing their own problems, they won't mess up too many times. They will find a way to fix the problem. [For example,] tell a manager you are going to be away for four days and you're asking [and counting on] her to look after the store. If she agrees, unless she is malicious, she will step up to the challenge and take care of business. It is amazing the quality of work and productivity you will get from these staffers.

Q. Please tell our readers more about the employee categorization process you use.

A. I use employee categorization for our hiring and reviewing process. It's based on the book Topgrading by Bradford Smart. Using this, employees are categorized as "A," "B" or "C" players. "A" players are in the top 10% in a given pay range and considered top employees. The "B" range is comprised of 40% of employees, and the bottom 50% of employees are in the "C" category.

I learned the concept, had my manager read Smart's book and we discussed it for a few months before implementing it. Once you move your store in that direction, you commit to only "A" or strong "B" players. You will get resistance and some employees will be upset when you use employee categorization. We had some unplanned losses of people, but the people who left were "C" and weaker "B" players. I was told that my "A" players would be much happier and more productive with this process because they would now be surrounded by more “A” players, but did not anticipate how true that would be.

With employee categorization you look at people objectively, which can be tough because many small retailers have close relationships with their staffers. But a business is only as strong as its weakest player. When you have a weaker player, talk with that person and give him or her a chance to improve before letting him or her go. If you take a leadership stance and have the courage to identify and correct those weaker players, you will find that your strong players become even stronger and respect you even more.

Q. What is the biggest retailing lesson you've learned?

A. Many retailers underestimate the need for systems and processes. Proper systems are as important as vision and having good people. It's called VSP, which stands for vision, systems and people. The importance of systems is huge, and is the only way [in my store that] we can consistently achieve what we want to achieve.

We make sure goals and objectives are widely known among the staff. Within systems and processes, we try to cover all the activities we do, including daily and weekly tasks and step-by-step processes for accomplishing activities, as well as an organizational chart, job descriptions and key performance indicators, or KPIs. KPI measurements are different for each position. Job descriptions were one of the first systems and processes we implemented. Ours are only two pages long and outline exactly what each position is responsible for.

Q. You say that open-book management is the second biggest lesson you've learned as a retailer. Could you describe it?

A. An open-book management policy is one of the scariest things for retailers to do. Some retailers tell me they just can't bring themselves to do it. But those store owners who open their books to the staff all say they can't imagine doing it any other way.

We share more with our staff than every other retailer I've talked to. We do it at different levels—one for our hourly/seasonal staff and another for managers and department heads. With the hourly/seasonal staff, we share information over which they have influence like sales figures, how we're doing with sales objectives, average sales per customer and units per transaction.

We use full open-book management with managers and department heads. On the third Tuesday of the month, we review the profit/loss statement from the previous month. We go through the statement line by line, and review revenues and expenses in detail. The only area we don't go into complete detail is individual salaries and wages, but managers and department heads do see the total payroll.

This [management style] is hugely powerful for us. It instantly grew our bottom line and got everybody working together. As soon as we moved in this direction, I felt the biggest shift in mind-set. I felt accountable to my staff about where my monies were spent. The group questions if a manager spent $80 on a meal while traveling. They'll question me about marketing decisions. Now I think twice when spending marketing dollars because if I go 5% over budget, I am accountable to my entire team.

Q. How has a combination of open-book management and profit sharing further freed you of responsibilities as a store owner?

A. With open-book managing, assistant managers and department heads make a manager [or owner's] job easier. When everyone is after the same goal, you now have [one or more] people who are thinking and acting like an owner. By reading Jack Stack's book The Great Game of Business, I have implemented a profit-sharing program modeled after his. With profit sharing, people are motivated by the possibility of a bonus and actually have a stake in the outcome of your business. When you provide your team with the same numbers that you have [open your books] and give them a stake in the outcome [profit sharing], you will have more people in your company who act like you do each day.

Q. What tips do you have for those opening new retail operations in today's economic climate?

A. This can be a good time to start up a retail operation because there is lots of retail space available all over North America. Really, really work on your lease rate to negotiate better rates. Keep fixed overhead and ongoing costs like purchases of equipment and other capital expenditures as low as possible. The same goes for amounts financed for lease hold improvements like counters and displays.

Make sure your financing is solid before starting construction or spending any money. I've heard of too many stories where banks have reneged on financing. Try to attract the best employees. There's a lot of good talent out there looking for work. If the economy rebounds and a new hire leaves in two years, you've at least had his or her talents for that time and are through the start-up phase of your store.

Note: Buyting's book and the two others he recommends can be purchased at Buyting can be reached at

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