Errol Chavkin’s client, Olive and Bette’s (NY), was mentioned on the television show Entertainment Today. Alan Roseman’s client, ZJ Boarding House, celebrated its 20th anniversary with a wildly successful carnival in Santa Monica, CA; the proceeds were contributed to charity. In England, affiliate Thierry Bayle had a feature article printed in the publication Drapers.

True, the changes that are presently taking place are huge and sudden, but that just means that the measures to deal with them need to be well thought out and effective. Now, more than ever, it pays to not be buffeted about by circumstances but to take charge and grapple with the situation and the future with the help of the experts of change, the team of Management One® affiliates.

This situation promises to exist for years and as such, hunkering down to weather the storm won’t work.  You must take definitive action to position your store as the leader for the future.  For example, James Hallman has been sending out positive e-mails and ideas to his clients in addition to the challenges he presents to them at their monthly meetings to stay aggressive. A passage from one of James’s messages makes a poignant point:

“I know that, like me, you feel fortunate that none of our friends, neighbors and countrymen will ever be satisfied with a cave for shelter, an animal hide for clothing and a hunk of raw meat for food. As long as that is true — we will do business.”

Ed Cloeter (Detroit) also relays his years of experience and retail wisdom to his clients with continued messages. He recently relayed a tale to them that he recalled from when the country was undergoing a drastic economic downturn in the past:

A little fellow parked himself on a busy intersection and began selling hot dogs. Sales grew so he ordered more hot dogs and buns. The little man had a son who came home from college for a holiday break. The son was studying for his B.S. in Business. The bright lad saw all that his dad was ordering.

Astounded, he barked, ‘Dad, don’t you know how bad the economy is? You’d better cut back!’

The little old man hung his head and listened to his son. His son was, after all, echoing the gloom and doom of the day. The dad cut back his orders and, sure enough, sales dropped. Occasionally cars would stop but would pull away when they found there were no more hot dogs. The man scaled back more. Soon the man, the cart and the hot dog business were gone from the corner. The son was right.

It’s clear from the simple tale to see that faulty logic can lead to unacceptable conclusions. Instead of panic and retreat, business owners need to remember that there is still a market out there. Those who have the know-how to maintain the connection and the attraction to their business will be able to keep their heads above water. Your store, your customer and your situation may all change but you need the right strategy to succeed with the new dynamic!

The Management One® affiliation of consultants and clients has been sharing ideas and actions that have succeeded in overcoming the recent obstacles. In addition, M1 is armed with valuable knowledge of what is working through its giant network of hundreds of retail clients across the United States, Ireland, England and other countries. Information, motivation and accurate forecasts of the market are key elements to remain in today’s marketplace. Advantages available to M1 clients, such as Margin Buying Service, are a great help in providing an edge to success and even survival. For those who simply try to “ride out the storm”, there will be fallout and many carts and businesses may disappear from the corner.

What is your strategy? Remember — hope is not a strategy. Take control and take action! The strategy and subsequent tactics you employ today may mean the difference of whether you will survive this economic environment or be one of the casualties.

Discuss your situation with your Management One® affiliate. If you are not already a client, contact Management One® today for a no-obligation meeting with an affiliate in your area to see how your business can take action to survive and to thrive: www.management-one.com.

Our Winning@Marketing team has been operating for 4 months now and working with these marketing experts has given me some real insights into many changes occurring all around us. I remember 45 years ago as a kid in my dad’s men’s store, most marketing was word of mouth and a weekly ad in the local paper. The strategy was to open a store, have merchandise available, put an ad in the local paper and wait on customers when they came in the shop. The world has turned upside down since then. Let’s look at a few of the changes that have affected or soon will affect your business future.

Advertising - THEN: Advertising used to be lofty claims and expensive fluff – jingles, sound bites or tag lines. NOW: Today information speaks to individuals. Successful businesses have a presence on the web. They engage in more cost effective marketing targeted to buyer personas and customized for their benefit. Blogs, article marketing, SEO, SEM and e-mail campaigns are replacing or at least augmenting traditional media advertising.

Promotion/Message Delivery - THEN: Retailers broadcasted their message by either advertisements in the newspaper or on radio or TV. Potential customers would see it, some of them would react and come into the store. NOW: With customers searching for everything on the internet, the broadcast has changed. It’s now the customers who broadcast what they want by searching the web, and it’s up to the retailers to “be there” when they are searching.

Wait on customers - THEN: People had limited choices and you knew your market and the competition. You got to know customers and you did not need a great effort to get them to come in; they came in anyway. Competition increased and businesses turned to direct mail and phone calls. NOW: Marketing is more about getting to know your customers than ever before. Getting to know them means what they do, what they like and who they really are. When they like you, they like your merchandise and like the buying process, they are loyal. People still buy from people who they like!

Hype - THEN: Marketing was about creating an external perception that was nirvana. “Drink our beer and the girls will flock to you!” “We offer the best service at the best price!” People have either become a lot smarter or are receiving a lot more choices. These ads don’t work. NOW: Reality matters. Teamwork and excellence are fundamental to your reputation and growing a business. Leadership needs to inspire staff and give direction. It’s all about what happens at the EAI (Employee Action Interface). When your marketing is about the truth, it creates buzz, word of mouth, loyalty and passion. The truth needs to be about creating partners of your customers and providing support as well as product.

Markdowns - THEN: Inventory that didn’t sell went on sale. What still remained was stored for next year. After three years if it didn’t sell, it went to the sidewalk sale. The bottom of the funnel was a charitable donation. NOW: Rising prices, expenses, competition and the internet have all put pressure on cash flow. Cash flow relies on not only buying the right goods but also the right amount. Measures and control of margins, maintained markup and sell through are critical. Budgeting, classification structure, inventory management and merchandise planning are fundamental to success today. Information, analysis and the right actions are no longer hallmarks of the best retailers, they are hallmarks of the survivors.

There are many other changes happening with the economy getting tougher every week. Winners will be the ones who move the market from people who shop with you to people who are passionate about your store. Winning@Business™ gets your team focused and effective, Winning@Retail™ increases cash flow and profits and Winning@Marketing™ drives new prospects to your door. Call Management One® to find out which processes work best for your business.

Too often, without a well fashioned hiring strategy, plan and implementation process you end up with the wrong person.  That wrong person not only costs you in lost time and money but the lost profits and customers due to substandard work can be devastating as well as irrecoverable.  The short tenure of the wrong person puts you right back where you started. Why does that happen way too often?

The reason is that most businesses hire for experience and fire for fit. In other terms, the resume, prior experience and presentation of the individual are the keys to the hiring decision.  That will assure that you have a person that is best at getting the job but not necessarily one who is best at DOING the job.
Basically every job requires both traits and skills to accomplish it. Most employers tend to hire based on skills which is a great idea of you are looking for a life and death occupation like a brain surgeon. One reason that a brain surgeon can be hired based on skill is that the long and rigorous path to become a brain surgeon has vetted the traits required long ago.

To promote a better hiring process and hire for fit, focus on traits.  Traits are natural abilities and likes. This is personality and talent. Traits are the precise reason that even with all the coaching, training and practice I could benefit from, I will never be a player in the NBA.  That would be sending a duck to eagle training camp.  That is one aspect of what I mean by fit.

The second aspect of  job fit involves the others on the team. The hiring process should be a combination of identifying the skills and traits of the individuals and matching that to the needs of the organization. When the team members mesh well and can work together, the employees are happier, more motivated and the workplace is a wonderful place to be!

Obviously there are many other important aspects to hiring the right person. Understanding the critical parts of the process and designing the procedures that are required for the situation you face will lead to a long and profitable relationship. Hiring the first person that responds to an ad or your merchandise manager’s cousin’s wife may not be a good choice at all.  Don’t hire a duck if the job requires soaring like an eagle. The cost and effort to do it right the first time is minimal compared the cost of making a mistake.

You soon found that planning was not the only key to success. Business is not always fair so regardless of the fact you worked the hardest and had your money invested, it was you who went without a paycheck when there was no money. You found that as owner, sweeping the floor and emptying wastebaskets was not beneath your status or dignity.  Now that you have some experience, the challenges have turned to battles to be won. Big ones and little ones, easy ones and tough ones, everyone wants something.

In order to get some insight into how to win these battles, there is no better group to model in battle than the U.S. Marine Corps. They are arguably the premier fighting force in the world. They train constantly for the day when they are thrust into battle. What have they learned about winning the battles from which you can benefit in your daily business battles?  Here are a few of the most valuable lessons.

The foremost lesson is to identify your target and develop a plan and strategy. That allows you to get all of your assets in place before you start firing randomly. A plan lets you assess the skills needed through training, reorganization or hiring staff or a consultant or expert. The marines know the objective in clear terms before they hit the ground. Marines know they are there to take a hill, capture a city or squelch an uprising. You should know your target too!

Another lesson is to decentralize. The marines realized that targets must be set and plans established but the field officers need the flexibility to make decisions that achieve those targets.  Officers measure effectiveness and results.  They don’t try to manage from the top.  By the time a tank commander can gather situation data, send it to headquarters for analysis and a decision, receive the orders back and then take action, the opportunity to win the battle is lost. There is too much that happens spontaneously to manage from the top. The same situation exists in most businesses. There is so much happening with customers, inventory, equipment etc that employees need to know the target but be free to make the best decisions on the spot in order to with the battle.  Even a small business needs to decentralize!

Thirdly, you don’t win the battle without acting. Don’t let paralysis by analysis keep you from developing action plans and taking action to implement them.  Often timing is more critical than planning.  Staying focused on what you want to accomplish lets you decide which battles, opportunities and options can move you in the right direction.

Next, use experts and intelligence to gather the best direction and information available. The marines consult with locals and military experts. They use consultants to help them draw from a broad perspective of ideas. You must make the final decision about your business but don’t ignore the wealth of options and intelligence that can help you make the right decision. Two lessons here,

1.      Don’t be too proud to seek outside advice

2.      Get the information and advice to the whole organization

Know the exit strategy before you go into battle. The marines identify exit routes and extraction procedures before they enter a situation.  Search and rescue is as much a part of battle as attack plans. When you evaluate an option, evaluate what happens if the unexpected happens. Know the way out. Know the downside as well as the upside.

Finally, focus on critical not urgent items. An outside consultant, board of directors or knowledgeable mentor can keep your efforts directed toward winning the war, not just firing your weapons! We us a process called Winning@Business™  to help owners win the business battles.   Winning the war and winning in business have many parallels.  In the end, however, you can bounce back from a failed business.  Too often a failed battle does not give one that option.

One result from years of a tight labor market is what the army terms ROAD Warriors. These are Retired On Active Duty Warriors, people in your organization who act like they are doing the job but in reality lack the drive, commitment, ingenuity and desire to always find new and better ways to serve your customers.

This new economy presents the opportunity to root out and replace ROAD Warriors with people who are committed, motivated, inspired and willing to work with everyone on your team. The challenge is how to go about the hiring and replacement process. Replacing people can be a waste of time, money and be very disruptive if you get rid of the wrong people or don’t hire better ones!

First, a management process is critical to identify those who are not committed to your success. The staff knows who these ROAD Warriors are but they are often hidden from the management. Establishing teams and implementing Winning@Business™ is a great way to identify these people.

Hiring better people requires a process to identify those who can truly do the job, not just the person who is best at getting the job. A Management One® affiliate can work with business owners to look in the right places, ask the right questions and put candidates through the right process to hire the best.

Hiring is never complete until the orientation process and job training is complete. Teamwork, communication and the creation of an environment that is exciting will help you succeed in the next year. It’s up to you!

Howard Behar, executive of Starbucks, says, “We are not in the coffee business serving people, but rather in the people business serving coffee!” This is a lesson for every small business owner, especially retailers. You too are in the people business.

Behar doesn’t say they are in the customer business but rather the people business. That is because success revolves around many more people than just customers. In order to deliver dresses, shoes or suits, many people are involved. Those people must be dedicated, trained, motivated and empowered to do their job effectively so the customer can be not only satisfied, but delighted! That includes sales, marketing, buyers and others within the organization.

Take at look at where most of your business efforts and focus fall. Is it on buying inventory or effective merchandising? Do you spend a lot of time on marketing? How much time is spent on finances and looking at cash flow? Are you selling on the floor, opening and closing the store and working on receiving goods? Compare the time spent on all those activities to the time you spend on training, communicating and growing your employees. Employees are your most important asset. Employees make your store unique compared to the competition. Too often I hear retailers lament that the internet is cutting into their sales. That means the staff is not specialized enough to compete effectively. If you, as the owner or key manager in the business, are not spending at least half your time and a good part of your budget on improving and nurturing employees rather than nursing them, competitors and the internet can pose a threat.

Winning@Business™ is about growing people in order to grow your business. Dedicated employees create loyal customers. When your staff is trained to think like an owner; when they own their job instead of renting it from nine to five; they will be more productive and effective at creating buzz (word of mouth) and keeping customers coming back for more.

A management process that is coordinated and implemented properly can change a culture and a business. There are reasons that some businesses do well while others fizzle. Often it can be traced back to people and how well they work together to accomplish goals that are meaningful to the success and longevity of the business.
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Though well experienced in the retail industry as well as his experience in sales and marketing (he was a frequent speaker for the PGA), Mr. Hite looked outside his already strong staff for additional assistance to develop a management plan. One of the most important relationships he developed was with Management One®, one of today’s best retail management consulting groups, to develop a rapid ROI (Return On Investment) strategy to maximize the two largest assets of Norton Ditto: their people and inventory. Mr. Hite admits that while he and his staff had previously used management and merchandising plans from other consultants, the key to their success was “that Management One® not only provided better plans, but they were also able to motivate us to follow the plan. ”

It is no news that retailing is a cash flow business that must maximize sales and turn rates. By increasing turn rates, a retailer will improve cash flow, reduce markdowns, increase margins, and indirectly increase sales. Management One’s focus is unique in that it’s not solely directed toward tightening the belt (Open to Buy) to maximize turn rates. The focus is also on helping the retailer develop opportunities to expand the business by re-investing dollars that were previously overcommitted in non-performing classes into new lines and classifications with growth opportunities. Breaking out classifications so that growth can be tracked more effectively results in inventory dollars spent with a much better return.

As examples, Mr. Hite points to his neckwear and belt classifications that were performing poorly and are now very profitable classes with neckwear selling through at 85% (and trust this author who has been in his store - he still has a fabulous selection of ties!) Yet he acknowledges that sometimes the raw numbers don’t tell the whole story. He admits that if he looked at the numbers only he wouldn’t be carrying Oxxford suits, but he knows his market: one can’t be the premier haberdasher of Houston and not carry Oxxford suits. “It’s all about the right balance of merchandise,” explains Mr. Hite.

Marc Weiss, one of the principles of Management One®, calls Norton Ditto a “text book example” of what good controls and discipline can do for a retailer. Evan Wise, the other principle of Management One®, emphasizes that a key turning point is when a retailer deals with issues they can influence rather than making excuses due to circumstances beyond the retailer’s control. Inventory planning, balance and the right OTB at market is one area that every retailer must control. Mr. Hite applauds the responsiveness of Ed Scott, his Management One® consultant: “It’s much more than a monthly review of our merchandising plans; it’s the daily support that makes their service so valuable. Moreover, Management One® is in tune with and truly understands the retail business.”

In 2007 Smyth Retail became part of the Norton Ditto partnership by providing the underlying information system which effectively manages daily transactions and provides important reporting and analysis tools, including a direct interface to the Management One® “Winning @Retail” merchandising planning system. The entire Smyth organization was so committed to helping their POS customers get the most from the data their system collects, they provided the direct interface to Management One at no added charge to customers. That interface makes it easy for Norton Ditto to send the information to Management One quickly, accurately and easily over the Internet. Management One processes the information and the report can be returned over the Internet as well. This seamless and efficient process provides Norton Ditto with timely and accurate analysis of their business. Mr. Hite affirms there is “no doubt that the timeliness and accuracy of better reporting tools provide the information to quantify and qualify management’s decisions. ” The ability to get a snapshot of the status at any time during the month using Management One’s Plan-On-Demand (POD) feature is important to helping us reach the planned goals established for the month.”

Mr. Hite sums it up best: “There is no doubt that through effective planning and execution that we have increased turn rates, margins and sales.”