When Well-Intentioned Policies Drive Negative Behaviors, Part 3 – “…it looked great on paper”
Welcome to the final post of our 3-part series exploring real-world cases where well-intentioned policies resulted in unintended negative consequences. In our last post, we discussed how poor processes, aging systems, and misaligned incentives forced store managers to invent labor-intensive workarounds that compromised customer service. This week, we discuss how even very senior, well-respected, and knowledgeable field leadership can make poor policy decisions when taking ideas from paper to practice.
Recovery is the term commonly used to refer to the activities of cleaning up, facing products on shelves, refolding or rehanging clothes, and overall organizing and sizing of the sales floor during and after operational hours. Recovery is a mainstay of store execution and can be a differentiator and source of competitive advantage. At a very minimum, great recovery drives increased sales, since a store that’s easy to shop is more likely to deliver on customer expectations for a great shopping experience.
Many stores utilize different staffing levels and methodologies in recovering their stores, ranging from a large portion of staff working by department, to a few individuals working specified areas, to “blitzes” or groups going through different areas one at a time. These can all be effective, but must be supported by appropriate scheduling and positioning of store labor hours.
Occasionally, new ideas to handle key operational activities such as recovery will come down a company’s pipeline with varying levels of vetting and potentially cause disruption. Some ideas are well intentioned, but may be based on a lack of real, recent store experience or understanding of the intricate labor requirements of the process. For this big-box retailer, with average store sizes nearing 100,000 square feet (and a low cost labor model) a new policy to handle recovery would have ramifications for several months to come.
This is an example of a policy that may seem great on paper but falls down when placed against specific retail realities:
Departments in large box retail stores (Home, Electronics, Women’s, etc) regularly span thousands of square feet
Many retailers, including this one, utilize low-cost and low-engagement sales floor strategies, making their stores bright and leveraging navigational signage, but typically staffing only 1-2 associates per area per time of day
In larger retailers, more square footage in a department does not necessarily equate to increased staffing (for example a large Women’s department may have the same staffing coverage as a smaller Men’s, Home, or Accessories department), which means that employees in departments with more customer traffic can find themselves quickly overwhelmed addressing customer needs (checking on sizes, opening an additional register, etc.), and not have time to recover
The customer impacts on a store quickly outstrip the capacity of 1-2 individual associates and would require significant increases in staffing to keep up and maintain throughout the day (remember, that denim area is now being folded multiple times a day to keep up “in real time” instead of just once in the evening)
The increased need to multi-task negatively impacts the ability for associates to effectively execute other key operational tasks such as performing customer service, investigating stock levels, and covering breaks for other associates
When done correctly, recovery typically takes longer than it takes for customers to leave an area in disarray, which not only results in missing the recovery objective, but also further impacts customer service, inventory activities, etc.
It is worth noting that there are counterpoints to be made here: not every customer contributes to store clutter, cleaner areas result in less disarray since “finding” displaced items is easier, etc. However, these are findings that regularly play out in boutiques, stores with high sales per customer, and retailers with “high-touch” policies – and therefore increased engagement and typically more staff. These attributes do not apply to traditional big box retail.
A very senior Vice President within the store operations organization, who had recently transferred from a home office role, created this policy. The VP sent the program to just under 300 stores and overnight began impacting thousands of employees.
Despite the stores’ best efforts, employees predictably could not keep up with the customer impacts and other expectations placed on them during the day. Customer service slipped, other tasks like returns and restocking began to pile up, and eventually nearly every corner of the store was impacted.
This post provides yet another case study from a large and successful retailer, showcasing how critical it is that different departments collaborate and deeply understand the total impacts of processes, incentives, and policies on the rest of the organization and most importantly, on the customer.