Knowledge Management Consultant
7:40 PM 2nd July 2012
Double Our Turnover? You're Having A Laugh!
Photo by Martin Kimeldorf's Pixel Playground
Is it sensible in these unsettled times to set impossible targets for your business and embark on extensive change? A Yorkshire DIY superstore was facing the crunch last year and chose to revive their business through an approach called continual improvement.
This is the first in a series of 6 articles which looks at how the process of continual improvement could help your business and how it was used to rejuvenate a Leeds DIY superstore in just 6 months.
Established over one hundred years ago, the DIY superstore was a goldmine on paper. Doors were open seven days a week and customers had plenty of products to choose from in the 30,000 square feet of trading space. All was not well however, and sales were seasonal, profits marginal, staff demotivated and the family owners were considering the future carefully. A strong plan was needed.
Business plans are a bit like marmite -Photo by Celeste Hodges
Unfortunately business plans are a bit like marmite. The label says they are good for you, but not everyone is going to like the taste. They can be once-off activities that no-one really understands, get in the way of real work and the results can be quite unrealistic.
On the other hand, a good plan is a powerful tool that focuses minds, draws the organisation together and provides a roadmap through challenging times. One of the more expressive but simplistic definitions describes strategy as "a view of the future and an action plan for getting there."
There was general disbelief at the DIY store on the day they were told the target was to double turnover over the next three years. After all, the eight staff were already stretched to their limits.
Business plans need careful analysis, thoughtful targets, risk management, contingencies, imagination and even bravery. Unless these can be communicated simply and effectively, people will resist the targets they don't understand. An obvious and seemingly radical vision is needed to convince people that such a drastic target can be reached. Often the business will be better off aiming for practically worded goals like "to be the best tea-room in Grassington," something that staff can quickly embrace and work towards.
When is a strategy not a strategy?
How was the store supposed to achieve such an ambitious vision? What was the amazing revelation that would transform this business?
Big changes are risky. They can be expensive, disruptive and put a strain on staff. The store could not afford this, so a different approach was sought.
One solution appeared to be in continual improvement. Originally used in manufacturing, this approach has people on the shop floor make small changes whenever a problem or inefficiency is spotted.
Work towards the target - Photo by bitsofreality
The action plan was therefore surprisingly simple. Staff had to work towards the targets as best they could whilst being guided by a handful of core principles and objectives. The shop was divided into physical areas, work divided into functions, areas and functions allocated to each person, and then each person was assigned the sole responsibility for the performance of their area.
In practice this meant Mark was allocated the paint section and store advertising. His duties included keeping the department clean, well-stocked and merchandised. He had to advise on replenishment and even meet with suppliers to decide on new paint lines.
His daily targets were standards like customer service, housekeeping and the brand identity. Much of this was new, so Mark had to learn and use industry best practices to do his work and achieve his goals. Management's responsibility was to help Mark learn, support him with activities like visiting competitors, keep things on track and even allow the occasional mistake.
How did this turn out?
On the shop floor there was some resistance at first. Continual improvement requires changes to the way people work, and the learning curve can be a little steep. Most staff quickly saw this as an opportunity to add depth to their jobs. They became more enthusiastic, better problem solvers and took on more responsibility. Customer service improved, the team required less micro-management, there was more pride and absence became less of an issue.
Financially the results were good too. The project culminated in January with a 25% increase in monthly turnover over the previous year. It also paid for itself out of greater efficiency and increased turnover, even though a new tea-room was added and the garden display completely rebuilt.
The next article will talk about the customer experience and what a fresh coat of paint really means to customers.
Part three will look at brands and how to attract a diverse clientele into the business.
Merchandising and the store layout will be explored in part four.
Part five will get to grips with staff issues.
The final article will consider advertising, digital media and the role of continuous learning in the future of any business.
Patrick Onions is principal consultant at The Knowledge Studio and an experienced practitioner in knowledge, information and project management. For more information visit www.knowledgestudio.co.uk