A.T. Kearney, Features, Management

Change Behavior, Not Employees

Retailers intuitively understand that everything positive that happens in their stores happens through people. Current employees, specifically the average employees, from sales associates through regional leaders who constitute the majority of the workforce, hold the key to improving operating performance and business results.

That’s not just motivational rhetoric or the latest human resources theory, it’s a fact supported by repeatable results.

Shifting Performance is a new approach to workforce improvement from A.T. Kearney, offering a proven, non-disruptive, rigorously analytical, repeatable path to improved business results. It utilizes analytics to answer some of retailing’s oldest and most basic problems, deliver measurably enhanced business outcomes, and create a better-quality customer experience. The process helps retailers achieve their growth and profitability goals by building on existing but potentially hidden strengths in the workforce—helping average employees learn from and adopt the behaviors of top performers.

Tapping the Power of the Middle

Rather than focus on the tail ends of the performance curve—trying to grow and retain high performers or salvage or change out the low performers—Shifting Performance focuses on the average performers who are the real heart of any retail organization. This middle group of employees typically constitutes 70 percent of the workforce. Given their scale, even a small increase in this group’s efficiency and effectiveness delivers significant improvement to the store.

Taking a Hard Approach to What’s Been a Soft Problem.

As we said, Shifting Performance takes an analytical approach to a problem that is typically viewed as a qualitative human resources challenge—understanding the behaviors, experiences and activities that enable employees to be successful.

Instead of looking only at a few key macro-metrics such as year-over-year comps, payroll and shrink, Shifting Performance takes a broader view by building a performance equation that quantitatively defines how groups of employees add value.

The equation takes a comprehensive view of what employees’ “good” performance looks like and then evaluates it, considering market and store factors that might influence outcomes. The performance equation measures micro and macro metrics, but can also consider factors such as opportunity, market maturity, consistency of achievement and sustainability over time into consideration.

Finding the Bright Spots

Once it is determined how value is delivered, a new performance equation is defined as the standard for evaluating employees.

Once we have defined the performance equation we can see how value is delivered. These new criteria allow us to identify high performers who are truly delivering exceptional value to the organization, and those in the middle (the target group for Shifting Performance). Often times, we are able to also identify some “hidden gems” who, for one reason of another—like being a great manager in a tough market—might have been overlooked or labeled as average.

Once high and middle performers have been identified, we begin a combination of survey work, focus groups, interviews and observations to understand the differences in their behaviors, illuminating both what it is they do and how it is they do it.

A behavioral survey asks target group employees to describe how they spend their time, what they see as their most important behaviors/actions, and which tactics and strategies they use to achieve their goals.

These behaviors might include actions as seemingly simple as getting to know employees as individuals, applying specific skills/tactics in analyzing reports, modeling successful selling behaviors, and setting and focusing on effective interim targets.

By correlating the survey with the performance equations, we can see what high performers are doing differently (“bright spot” behaviors) as compared to the majority of the employees However, the real trick is to identify those behaviors, tactics and strategies which are truly different from the middle group and are “teachable,” as opposed to inherent personality characteristics.

Once we understand the what, we use a combination of focus groups, interviews, and observations to understand the how behind the behaviors. Finding out how high performers do what they do is much more important than just identifying what it is they are doing because the how allows us to teach others what they need to do differently.

In one recent example, we saw distinct differences between top performing and average district managers’ approaches to store visits. Average performers had a tendency to conduct a lengthy 40-point checklist each time they visited a store. At the end of the visit, store managers were left with a bullet list of “tasks” that needed to be performed by the next visit. Follow-up on these tasks was inconsistent. Conversely, top performers consistently focused on a small set of impactful metrics and behaviors. These metrics and personal objectives were agreed upon at the beginning of the season and were consistently reinforced throughout. During the review, high-impact actions were identified and discussed. And they immediately followed up with store managers to ensure prioritized actions were taken and planned results achieved.

Battle-tested Solutions

This approach works because the behaviors surfaced by the analysis aren’t disruptive and have already been proven within the existing corporate context. Success doesn’t depend on new pie-in-the-sky thinking or some externally derived best practice benchmark. These are identifiable, measurable and concrete actions that others in the organization are already using to achieve superior results.

Through this triangulated approach combining qualitative, regression and comparison analyses, we identify which critical few “bright spot” behaviors directly correlate to high performance, which often requires a refocus of existing assumptions. In a recent example, we were able to reduce the number of best-practice high-performing behaviors previously identified by the client from a list of almost 30 down to four that really made the difference in-store performance.

Once key behaviors have been identified and articulated in a way that can be taught, we develop a plan to replicate them through vehicles and corporate initiatives such as revised metrics and dashboards, employee training, quick-use tools, tips/tricks, and playbooks launched and distributed throughout the middle of organization so they become a regular part of how work gets done.

Real Examples, Real Improvement

Finally, Shifting Performance delivers real results. Here are two actual examples:

  • In the case of a retail store chain, A.T. Kearney identified opportunities to boost store contribution by six percent by implementing just four key behaviors that would shift the performance of average and low-performing district managers.
  • Impressive as those results may seem, implementing Shifting Performance was responsible for identifying a 10 percent revenue uplift at one of our Direct Selling organization clients.

Final Thoughts

Shifting Performance is an effective way to improve operating results by changing employee behaviors, not just changing employees.

The implementation of viable, objectively measurable performance enhancements does more than just make employees in the middle of an organization more productive by shifting their performance. We believe it will pay additional dividends in the form of longer retention of key employees (a critical issue at retail), enhance collaboration and the communication of best practices and, ultimately provide your customers with a better and more efficient shopping environment.

This process can be used at all levels of the organization, from regional managers to front-line salespeople. All that’s necessary is that the group in question be of sufficient scale and share a consistent value contribution mechanism.

In retailing the bottom line is, of course, always the bottom line and Shifting Performance drives topline growth that directly translates into bottom-line results while, at the same time, driving sustained capability development.

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