By giving more power to more people, a large retailer finds a lasting solution to dwindling sales.
For more than a decade, a large retailer had been losing ground to competitors. Discounters were undercutting the company on prices, while specialty stores offered customers better selections. As a result, market share, foot traffic, and sales were all declining.
To cope with the problems, the management team told local store managers to run promotions designed to appeal to their customers. Local managers could pick which products to feature, arrange discounts, and revamp the look and feel of store displays. But the initiative failed. Even with wide latitude, managers actually avoided launching promotions altogether.
The problem was that this solution didn’t address the actual underlying problem. In recent years, the retailer had modernized and centralized its operations. Important decisions about product assortment and availability, as well as pricing and staffing, were made at headquarters. Store departments focused on their own priorities, with no desire to support new efforts such as promotions or events. Store managers had little power. Without sufficient resources, they stopped trying.
Senior executives needed a way to give more power to store managers. To do that, they had to identify a stake that mattered to everyone, regardless of store location or any other factor. A fundamental issue was customer satisfaction, as measured by the time customers had to wait in checkout lines.
The solution was to open up new checkout counters as soon as lines got too long. Initially, the central quality function started to design complicated rules to decide which employees from the store departments would be sent to the checkout counters, based on factors such as day of the week, time during the day, traffic in the store, employee skills, and the number of checkout positions to be filled.
Instead, management implemented one of the core rules of Smart Simplicity: Increase the total quantity of power. The executives mandated that managers would decide which employees went to checkout and when—using their own discretion and not a set of centrally established rules.
The executives created a new stake that gave managers an additional base of power. Store managers got to make a difference. Seem trivial? It wasn't.
Store managers were able to use checkout duty as a reward—and find out more about employee workloads. Employees had a new reason to listen to the store manager, so they listened to them about other job-related issues as well. Since store managers controlled important aspects of performance, the central functions also had to listen to them.
The results were striking. Customer wait times dropped, and satisfaction levels shot up significantly. As store-specific promotions, design, and pricing programs got traction, all stores saw market share, foot traffic, and sales improve sharply.