License to Sell

March 7, 2007  by in UnCategorized   

By Home Furnishings Business in on March 2007 Picture the licensee. Picture his stores, all built to match the corporate template. See his products, chosen with the help of the company’s merchandising guide. Look at his advertising campaigns, just like those of his fellow licensees across the nation.

Licensing: a path to success for the non-creative? As La-Z-Boy informs its potential licensees, “our marketing, merchandising and sales systems make it easy for you to succeed.”

Now meet Brad Parker, owner of six La-Z-Boy stores in and around Portland, Ore. The first thing you should know about Parker is that he is practicing a unique strategy in furniture sales that many people dismiss as naïve and counterproductive.

The second thing to know about Parker is that, while he considers himself a loyal and trusted member of the La-Z-Boy family, he can get a little miffed at his corporate parents and colleagues—especially when they look askance at his unconventional approach to retailing, his entrepreneurial passion. It’s known as “standard work.”

Setting the Standard

The practice, which powered Japanese manufacturing to greatness, trains employees to adhere to step-by-step procedures to reduce variability and increase efficiency—and thereby profits. “Standard work” is standard in many a factory around the world. But Parker preaches it as the best way to sell furniture too, adopting it not only for the people hauling case goods in his warehouse, but for the salespeople selling those goods on the floor.

“This whole notion of mistake-proofing a business, and tracking the results and having a continuous improvement cycle—when you apply it to retail, it’s just mind-boggling,” said Parker, who has used the technique on his sales floor for three years.

He hasn’t managed to sell the concept to La-Z-Boy headquarters. “We did it without their cheerleading and without their financial support,” he said. Nor have many others in the industry taken great interest in standard work for sales.

“People will tell you in the furniture business that there’s no such thing. And it’s b.s. There is total standard work to be had,” Parker, 40, said with his typical candor.

Why don’t others buy the idea?

“They typically will say our business is different,” Parker said. “They will say every piece of furniture is different. Every customer is different. Every situation is different.” But what they fail to realize, Parker continued, is that in some ways, every sale is the same.

Standard work will be standard before long, he hopes, simply because it’s effective. Willing to teach anyone who wants to learn, Parker has begun training fellow La-Z-Boy licensees in markets across the nation, from Phoenix to Scranton, Pa. “You’ve got to be a gorilla on the street to get stuff done, and then you attack the bureaucracy,” he said.

Family Business

Parker started off as far from bureaucracy as he could get. Though his family had owned a suburban Portland furniture store for generations, and though they were eager for him to join them after he graduated from the University of Oregon in 1989, the communications major had far different plans.

He became a builder, and worked for $5 an hour. He built his parents’ house. Then, thanks to a bad back, Parker needed a new profession. Once again, this time successfully, his family tried to woo him back to Parker Furniture. He converted the store’s computer system, and wound up working there for five years. Then La-Z-Boy came calling with its new La-Z-Boy Furniture Galleries concept. Would the family like to open three of these stores in Portland?

“Everybody in the family said ‘no way,’” Parker said. Except of course, Brad Parker. “Being young and naïve, and suffering from ‘tell-me-I-can’t-do-it-and-I’ll-do-it,’ I said, ‘I’ll do it.’ ” Starting in 1995, Parker opened a store a year for five years, mostly from the company’s cash flow. A sixth store opened in 2003. Last year the stores made $24 million and employed 99 people.

Success didn’t come easily. Parker ran out of money after the third store opened. This is where he is particularly glad to be part of a business larger than his own operation. “We had La-Z-Boy there to help us,” he said. “They would let us put some invoices to a note for a short period of time, until we got out of trouble. They’ve done that for me a couple of times as we grew too fast.”

It was only as the growth came under control that Parker became a student of standard work and began developing his unique approach to sales. He had been frustrated with popular sales manuals and methods, which he found simply didn’t work.

A friend, business consultant Mike Martyn, who studied standard work at Toyota, had some suggestions: Mine your employees for ideas. Streamline with visual cues. Keep prodigious records and break processes down into simple steps. Born in America, the standard work concept helped the United States win World War II, Martyn explained. It then ignited the Japanese manufacturing revolution. Now it would transform a cluster of La-Z-Boy stores in Greater Portland.

Another compliment Parker pays to La-Z-Boy is that while they may not have cheered him as he explored new worlds in sales, they trusted him, and allowed him to conduct his business as he saw fit. “How much freedom did La-Z-Boy give me? Pretty much 100 percent,” Parker said.

He started in his warehouse, where he saw tremendous duplication. So he gathered his warehouse workers and together they color-coded the building, so that when a piece of furniture is dropped off, it must be placed either in the red return lane, or the yellow repair lane. Red or yellow tape is attached to the product, as is a short note, written by the delivery driver, describing its owner’s wishes. The product is coded for the parts it needs, so when the part arrives, it’s easy to match. Parker takes pride in the fact that this pared-down diagnosis and sorting system was built from the bottom up. “All these suggestions came from front-line, entry-level people,” he said.

Parker was then able to cut two positions from his warehouse.

Following the Script

But what about standard work on the sales floor? “This,” Parker said, “is where people go nuts on me.” It’s one thing to mandate a step-by-step procedure for returning an ottoman to a warehouse. But do you really want to tell your salespeople what they must say to their customers?

Yes, Parker said.

“When everybody is doing things their own way, you can never improve anything . . . you have to stabilize a system before you improve it. That’s just common sense.”

Parker and Martyn studied the sales process for six months and then broke it down into steps that would fit on a single sheet of paper. They drafted 18 different versions before they decided they got it right. The theme of the training program they created from their study was that the best way to learn is by doing.

Here’s how Parker and his team have been training salespeople for the past three years:

The trainee reports to a room in Parker’s distribution center, which is outfitted with a vignette, a projector and a video camera. Role playing ensues, to teach a “structured interaction.” The trainee learns to open with the following line: “Tell me about the room you’re shopping for.” Otherwise, there is no script. But the trainee will also see how his or her new job is broken down into steps—from greeting the customer to gathering information to demonstrating the product to closing the sale—and how these steps must be done in order. During the gathering information stage, the “the five F’s” must be covered: fit, familiarity, fashion, function and finance. The training is complete when the trainee can move smoothly from step to sub-step to step.

“We didn’t reinvent selling,” said Parker. “We reinvented how to train salespeople.”

Graduates of the program are effective on the floor in 30 days, said Parker, as opposed to the four months that it previously took. Once on the job, a salesperson is required to fill out a card for each encounter with a customer. A yellow card designates a sale, and it goes up on the board in the lunchroom. A red card indicates a failure to close, and must further show where in the process the sale broke down. It too goes up on the board.

Is there resistance from the sales staff?

“We had tons of resistance at first,” said Parker. “But new people who come into the company and have never experienced it say, ‘Oh my God, this is the best thing I’ve ever seen in my whole life.’”

The beauty of standard work, said Parker, is that a manager and salesperson can instantly spot where a sale broke down. “They immediately become a mini-training center.”

But why stop at retail furniture sales? “I use it with parenting,” said Parker, father of a boy, 11, and a girl, 9. “Whether I’m teaching them to ski or to use the lawnmower . . . first major step, stand to the side. Second step, pull the cord. Third major step, turn the choke off...”

Martyn said he’s surprised by how much resistance Parker has encountered, considering the success of his stores. But he knows the eye-rolling won’t faze his friend, and that eventually, Parker will tune more people into his methods.

“He’s one of these guys who is going to pull the rest of the industry along if he has to,” Martyn said. “With Brad, it’s ‘go big or go home.’” HFB