Coach’s Corner : Furniture Store Evolution and Tomorrow’s Leaders

July 11, 2016  by in Business Strategy, Industry   

This month’s issue of HFB features our eagerly anticipated “40 Under 40” listing of the next generation of up-and-comers in our industry, basically our future leaders. I thought it would be appropriate for Coach’s Corner to support that effort with a discussion of what got us here, how organizations should evolve and what leadership should do for a company. To do that I have included information that we use in one of our programs designed to help companies get organized properly, so they can be managed efficiently and effectively.

In order to gain an understanding of the changes a retail operation may need to make, let’s begin by taking a look at the way many of the companies in the home furnishings industry have evolved.

The “Mom and Pop” image so often used to describe a furniture store is not far from correct when looking at the history of our industry. Through the early and middle years of the twentieth century virtually all furniture stores were single market, single location, family-owned-and-operated businesses. The owners worked all phases of the business and performed all tasks personally, including dealing directly with every customer and, therefore, making relationships with customers critical to the success and growth of the company.

The customer’s connection with the furniture industry was through the retailer and loyalties were to stores and people rather than with brands. As business grew, mom and pop hired a sales person to assist them in keeping up with the business and as a result, lost some of the personal connection to their customers. As the business grew further, more sales people were hired and office staffs employed. Delivery people were hired and warehouses moved off site causing even greater loss of owner control.

During the 1950’s and 60’s, with the beginning of the suburban exodus, many single location stores became multi-location operations causing the hiring of management from outside the family and the need for more formal organizations with different reporting and communications systems than had been utilized before. Some companies were better at adapting to these needs than others and thus grew to become some of the great furniture retailers we still find active today.

During the 1970’s, 80’s and 90’s the second and third generation of family members joined these companies and, in most cases, brought with them new organization skills developed through higher levels of education. But in many cases bringing change to these “owner dominated” businesses was difficult. Many failed as the number of furniture stores declined by nearly half between 1970 and 2000.

Still, there are many great retailers who successfully brought their businesses through all of these changes and are now facing the challenges of the 21st century. However, with the explosion of information and purchasing opportunities available on the internet, even more change will be needed if furniture retailers are going to keep pace in the highly competitive market for consumer goods and develop the quality people they will need in order to survive, let alone maximize their opportunities. The piece of the pie available to them is shrinking, so as they say, “only the strong will survive”!

Given the proliferation of promotions, the commonality of product and the ever growing consumer demands for service excellence, not only will systems, processes and facilities need to keep pace with all the competitors, so will your people. And the key to that happening is state-of-the-art management skills and leadership.

Redeveloping a family-based or privately held organization is hard work because most of the key people are typically “born and raised” in the business. Their perspective is from the inside out and there is often an inability to envision the proper organization or its benefits. In other words, many will continue to run the company the way it always has been, since that is how they were taught. When in reality that is often the worst thing they should do! So let’s take a quick look at what your management organization should be like in order to handle today’s challenges.

First we must understand that Management is a task. It deals with things, functions and concepts. People with the title of manager can have responsibilities which may or may not include the management of people. Many staff managers have no one reporting to them, no one for whose performance they are ultimately responsible, yet may be responsible for relationships inside or outside the organization. Management has been defined by one expert as “getting things done through others.”

On the other hand, Leadership is an art. It deals with people, principles and ideals. While management can be taught through education and systems, leadership is a less easily acquired attribute. The two concepts, management and leadership, are often confused in business literature and culture. People seem somehow to instinctively know what leadership is and when it is or is not being provided to them. Most would define the qualities of someone they consider to be a leader in very respectful and personal terms, especially “behind their backs”. Still, as with all arts, there are fundamental principles which underlie leadership and certain tools which, when properly applied, can enhance everyone’s leadership skills.

We often closely associate Leadership with the “team” concept. To effectively compete on our own retail playing field, we need to establish a mission-driven team with total customer satisfaction and company profitability as their goals. We must establish sub-teams including the Management Team, which bind them all together.

To cultivate leadership from your management team, you must have the following:

·       Managers with a developmental approach to dealing with people

·       Managers with a strong understanding of accountability for performance

·       Managers who spend time coaching, training, observing, measuring and providing feedback

·       Managers skilled in handling conflict

·       Managers with effective one-on-one communication skills

·       Managers that create team relationships with each other

·       Managers who understand that goals are a great strategic management tool

·       Managers who spend more time preventing fires rather than fighting them

For this to work, accountability in your organization must also be a two-way street. There should be equal levels of accountability up, down and across the organization. Your organization should place the customer squarely at the top. The next level in a modern organization includes the people who have direct, personal contact with the customer.

Your “front-line” team is accountable UP to the customer for: Setting, Managing and Fulfilling expectations in accordance with the company mission.

They are accountable DOWN to their managers for:

·       Compliance with company mission, policies and procedures

·       Achieving agreed upon goals and results

·       Collecting information, such as marketing results, traffic counts and other needed data which is not tracked automatically

Your management level should exist solely to develop and support line personnel. This is best illustrated by remembering that this level was only added when the front-line team grew beyond the owners’ ability to manage them. They are accountable UP to the front line for: Leadership and coaching, plus Performance appraisal, goal development, training, measurement, observation and feedback.

This team is accountable DOWN to the owners for:

·       Results, or action plans when results are not achieved

·       Representing the image of the company

The owners of a company sit squarely at the bottom of a modern organizational chart for two key reasons: they are the most removed from the customer and they support everyone in the organization. They are accountable UP to the management team for: mission and direction, plus resources, both human and capital (staffing, facilities, merchandise, systems, vehicles and so forth).

Owners are accountable DOWN to the stockholders and investors for: Profitability and effective use of assets.

So, if most of your current and future management team “grew up” in your business, how can you inspire and train them to create change in it when they are given the responsibility to do so? In simplest terms, get them out of the business to expose them to new ideas and different ways of doing things! Give them a chance to “grow” in a different garden or with help from a different gardener!

Here are a few ideas that have worked for some of those that earned their way onto our 40 under 40 list:

·       Send them off to college, let them make sure this is what they want to do!

·       Have them get a job outside of the industry for at least a year, before coming back onboard

·       Set them up with an “Internship” at a well-run furniture operation outside your market

·       Have them regularly attend markets, symposiums and associated seminars

·       Enroll them in a performance group either with you or one that is aimed specifically at managers

·       Hire someone from outside to train, coach and develop them that has experience doing so

Last and most important - listen to them and give them the ability to make needed changes. When they are ready, get out of their way!