CLARITY, FOCUS KEYS TO STORE MANAGEMENT

MARK HAMSTRA

CHICAGO - Strong store managers who are able to clearly articulate the company's goals to their workers and drive performance that exceeds projections should be rewarded and empowered, retailers said at the Food Marketing Institute show here last week.

"Once high performance is defined at the store level, it should inform the people upstream [middle and upper management] when to get out of the way and let great performers do what they do best," said Bill McEwan, president and chief executive officer, Sobeys, during a panel discussion on the Coca-Cola Retailing Research Council report on store management, which was released at the show.

The study measured the performance of store managers at more than 140 stores and found that the best managers were able to communicate the company's goals with clarity and achieve high levels of customer and employee loyalty.

"The question is, why do similar stores get different results?" asked Bob Whitman, president and CEO of training and development firm Franklin Covey, Salt Lake City, who presented the study's results. "The answer is great managers. Ultimately, it's what the managers do that makes a huge difference in your stores."

Ray Stewart, executive vice president, Hy-Vee, West Des Moines, Iowa, said the role of the store manager is so critical that he described the company as having "226 CEOs."

The study, called "Getting to Great: Mapping Management Practices that Drive Great Store Performance," found that the best managers were responsible for improving store performance 38% above expectations.

One thing these managers had in common was that they were able to make their workers understand their role in the success of the store by clearly communicating a few key goals.

"Great performers focus on one or two critically important goals, and they make sure everyone understands those goals," Whitman said. "Great managers want their employees to understand the 'why.'"

Some store managers, whom the study termed "surface performers," succeeded in driving financial success but had low employee loyalty, while others achieved the opposite.

Also, sometimes stores do well because they are in a good location or benefit from minimal competition, but the manager ends up getting more credit than he or she deserves, Whitman said.

The study sought to weed out such situations by establishing expected performance metrics for each store and then measuring how well managers perform against those metrics.

"Great performers outperform relative to the strategic hand they have been dealt," Whitman said.

Retailers on the panel said participating in the study helped reveal some areas where they could make improvements they hadn't known were possible.

"We had some great stores at HEB, but what we found was that these stores could have been doing even better," said Suzanne Wade, president, SAFD Retail Division, H.E. Butt Grocery Co., San Antonio.

The study is available at www.ccrrc.org.