People or Process

 

Whenever I am brought in to examine a retail business, we look at two sites - the people and the process. We can always find out what is wrong in looking in these two areas. Granted they are big buckets with lots of items in them, but it helps if you can break things down into a simpler mode sometimes when analyzing your business. 

 The process is very straightforward, we talk to customers, employees and owners, then we study the market, then we turn our attention to their processes. 

What we are trying to determine is a Jim Collins principle from Good to Great - "do they have the right people on the bus?" Often times, especially in an entrepreneurial business, the people are the problem. We had the right people when we started the business, but now we need people with a new skill set to take us to the next level. I have stood in several CEOs (founders) offices and told them the company needed a new CEO. And so that you don't think that I am totally mean, I offer to help them become that new CEO. Those are very tough conversations.  

There is an old saying the "sales cures all ills." Actually, the better saying is that sales hides all ills. When sales are happening, we think it is because the machine (the process) is right. In reality, the deficiencies in the process are just covered up. We never look for them until there is trouble and by then it is often too late. I used to believe that a company that got to $50B a year in revenue did so because they had it all figured out - that was until I started consulting inside those big companies and realized they had the same broken processes and people as the little companies did. 

Often times the process fails because it is not in writing or engrained into the culture. It's how things we done when there were 3 or 4 of us, but now we have 30 employees. Absent documentation and process training, how can we ever expect employee 29 and 30 to succeed? 

If it's the people that are failing the business, we need to find out if it is a skill set or competency issue. 

By this I mean, are the people capable if we get them the right training and equipping. I have yet some real diamonds in the rough in my days that just needed the right coaching and development to sparkle. More times than not, it is not the wrong people, just a lack of training. We assume they know what to do based on doing it somewhere else before. And that is bad management.  

As a side note, you may be asking yourself "why did I not mention marketing or advertising?" Well, for one, that is a process, so we will touch on it. But more importantly, if the "fix" for a business is advertising, then it is not a sustainable business. Advertising will always become more expensive and costs of goods and rent will always go up. So, while we do look at this piece, it is never our first spot of analysis, and it should not be yours as well. I know it's easy to point to something outside the four walls of your store as the issue like advertising or competition, but the truth is we always discover things within.

 

 Compiled in Editorial Board of Retailiran

 

 

 

 

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