One Thing That’s Better Than Hiring Top Talent…

Finding and hiring top talent is an important priority in almost all retail and retail-type businesses. Adding that new leader who truly “gets it” can be the difference between good team performance and great team performance. Highly skilled leaders raise the level of team morale and engagement, and they drive consistently effective implementation of strategies and initiatives. For that reason, leadership hiring should be a rigorous process with very high standards.

But there is one thing that is even better than hiring top talent – DEVELOPING top talent. When you help existing employees to grow in a way which gives them top-notch leadership skills, you end up with the best of both worlds. You end up with top talent who also possess a wealth of inside knowledge and experience. This extra knowledge can help the internally-grown leader be more effective. Internal talent is also likely to enjoy a higher level of credibility from existing members of the team. And by promoting from the ranks you create a positive atmosphere of opportunity for others who aspire to grow with the company.

Developing top talent does require a bigger investment. It takes more time and energy. It means more tough conversations and more side-by-side coaching. It means sometimes letting people make mistakes that they will learn from, and also being there to help them fix the mistakes once they are made. Developing top talent is not easy, but it’s worth the effort.

Gut Instinct or Structure – Which is Better?

We have all seen leaders from both sides of this debate…

Type 1 leaders go with gut instinct. They have a knack for “feeling” when something is right and when it is wrong. They can’t quite put a finger on how to describe what exactly they are looking for, but they sure know when they see it.

Type 2 leaders go with structure. They have a checklist which tells them exactly what they are looking for, and they follow that list to the letter. They can tell you precisely what they are looking for; they just aren’t sure exactly when they see it.

Which is better? Are you compelled to follow the “gut instinct” leader who manages by emotion even if it’s not entirely clear to where you are being led? Or are you compelled to follow the “structured” leader who displays plenty of logic but doesn’t always make the emotional connection? If you are looking to hire a leader for your organization, which type of leader do you prefer to bring on board?

Gut instinct is really the product of all experiences one has had and the lessons one has learned. Those experiences and lessons are all wrapped up in our brains in a mesh of inter-connected synapses. Some connections are clear, but many are not. They exist in our minds in some subconcsious way that we can’t easily explain. For example, we may feel that a candidate for a job is just not right for some reason, but we can’t say for sure what that reason is. Perhaps our mind is connecting that the candidate’s lack of authenticity is similar to our experience of past employees who have failed terribly on the job. That would be our “gut instinct” correctly steering us away from a bad hiring decision. Or, it could be that our mind is connecting the candidate’s necktie to one that a hated ex-boss used to wear, and that is creating a negative impression. That would be our “gut instinct” tricking us with a form of cognitive bias, and we may be passing over a highly effective candidate.

The point is that gut instinct can be good, and it can be bad. What if gut instinct and structure were not mutually exclusive? What if, instead of being the opposite of gut instinct, structure was a tool to organize gut instinct? A definition of structure is…

“The organization of component parts of any larger, more complex thing which contains all of the parts.”

Without a doubt, a mind full of experiences is an incredibly complex thing that contains millions of parts. Structure can help to organize the huge mess of thoughts that swim around each other in our brains. When we organize those thoughts, we can make better use of them. And, more importantly for those we lead, we can more effectively communicate our thoughts to others. Structure can be seen as the perfect complement to good instinct. Either one on its own is less effective than both together.

Using the Rosenthal Effect to Identify and Develop Talent

Through reading Adam Grant’s book Give and Take, I recently became aware of a study which has interesting application for those of us who are in the business of identifying and developing talent in others. The study was completed in 1963 by Robert Rosenthal and Lenore Jacobson. They experimented with students at an elementary school in San Francisco. They started by issuing an IQ test to all of the students. Without revealing the actual test scores to teachers, they told teachers the names of the 20% of students who were identified as “academic bloomers” and could be expected to outperform other students in learning progress during the upcoming school year. At the end of the year when a follow up IQ test was issued, the students who had been identified as bloomers did indeed significantly outperform others in terms of their increase in IQ.

This was a major validation of Rosenthal’s hypothesis, but not in the way you might think. You see, the bloomers were not chosen by IQ test results; they were chosen randomly. The improvement through the year was therefore not due to anything having to do with the students themselves, but it was instead due to the behaviors of the teachers. The point of the study was to determine whether teachers would treat “bloomers” differently than other students. The fact that bloomers performed so much better than other students indicates that teachers’ knowledge of their status became a self-fulfilling prophecy. Teachers spent more quality time with bloomers, gave them more encouragement, and gave them more extensive feedback. All of the extra attention led to improved learning and better results on the end-of-year test.

This “Rosenthal Effect” is also known as the Pygmalion Effect. It has been demonstrated in other studies outside of the classroom. The general concept is that genuinely higher expectations themselves lead to better performance.

What does this say to us as leaders? How can we use this knowledge to become better at getting the most out of people? What might be the opposite impact of having low expectations of other

The True Value of Sales Reports

Imagine you are a regional sales director who supervises sixty stores across several states.  You are maniacal about analyzing your region-level sales reports, and you are in the habit of doing a deep dive into the store-by-store reports every Monday morning.  For two weeks in a row, one of your top performing stores has taken a nosedive in its year-over-year sales results.  After the first week, you assumed it was a fluke.  Now after the second week, you have become concerned.  You pull more reports to try to get to the bottom of what was going on.  Your extra analysis includes the following:

– You dig into inventory reports to see if they had run out of key merchandise.  No, they had plenty of inventory on all of the best-selling items.

– You look at average transaction values to see if salespeople were all of a sudden not selling complementary add-on items.  No, units per transaction were as high as they had ever been.

– You look at payroll and scheduling reports to see if there was a staffing problem that you did not know about.  No, hours and staffing were right in line with budget.

There is no obvious answer in the reports, yet the problem exists – sales were suffering.

Finally, you stumble onto something in one of the reports.  While analyzing sales at a product-by-product level, you notice that the new line of women’s sportswear is not selling nearly as well as it is in your other stores.  That’s it – the new merchandise, which is a bit more fashion-forward than the product lines of the past couple of seasons, is not appealing to this store’s customer demographics.  You go back to the merchandise distribution team and ask them to adjust future orders to slant the store’s assortment more towards basic, non-fashion items.  It took a lot of analysis, but you eventually figured it out and solved the problem.

Or did you?

What if most of the new merchandise was still sitting in the stockroom and hadn’t yet made it to the sales floor?  What if the new merchandise was on the sales floor but was all ticketed with the wrong prices?  What if the street in front of the store had just gone under construction and it was hard for customers to park and shop?  What if a new competitor opened up directly across the street at exactly the same time as the new merchandise hit the store?

It is sometimes easy to draw conclusions from a seemingly thorough analysis of sales reports.  But, sales reports can’t tell us why a particular result is or is not happening.  And until we know the “whys”, there’s not much we can do about it.

Sales reports are very valuable for providing guidance into the questions we should ask and for giving us direction on how to conduct further investigation.  Thorough analysis of sales reports can help narrow our focus.  Answers will only come from on-the-scene inspection and dialog with the front line team.  Armed with good data, our inspection time and our dialog has a better chance of uncovering the real root issues.  Once we uncover the root issues, we can then build action plans which will really work.

Don’t take the easy way out – data in reports doesn’t come close to telling the whole story.  Nothing is better for understanding the business than getting out of the office and onto the front lines.

Words Matter – For Retail Leaders Too!

We have been watching our government devolve into turmoil as politicians, reporters, and others analyze the meaning of words that are said (or tweeted) by those in charge.  Whichever side of the political debate you are on, it’s hard to argue that words have not been responsible for generating passionate feelings, either in support of or in defiance of, our government leaders.  While our words as retail leaders are unlikely to create international incidents of the same scale, they can indeed have similar impact on the smaller worlds over which we have influence.  Some things to think about…

We have responsibility to anticipate the impact of our words on the self esteem of those who work on our teams.  When our words make others feel empowered and motivated, the impact is good.  When our words make others feel defeated and hopeless, the impact is bad.  Giving constructive feedback is part of our job, and doing so in a way which maintains or enhances self-esteem gives us our best chance of leadership success.

We have responsibility to be honest and direct in our communication.  Anything less than direct leaves open the possibility of misinterpretation and confusion.  Anything less than honest leads to wrong conclusions and future problems.  It is very possible to be honest and respectful at the same time.  We should not be less than honest just to avoid hurting the feelings of others, but we should communicate our honest feedback/feelings/decisions with senstivity and respect.

We have responsibility to take care with the jokes we tell.  You have heard the old saying – “There is an element of truth in every joke.”  That’s especially true when the joke comes from the boss.  At least that’s the way members of the team will perceive things.  Sometimes it’s better to hold the tongue rather than be funny and risk sending an unintended message.

We have responsibility to manage the things we do NOT say as well as the things we do say.  Don’t say “hello” to a team member, and they will interpret something from it.  Don’t answer a question raised by a team member, and they will interpret something from it.  Don’t address an obvious situation which should be addressed, and others will interpret something from it.  Team members notice what we don’t say as much as what we do say.

We have responsibility to accept when we are wrong and apologize when appropriate.  As hard as I try to be right and do good things, I very often am wrong.  That includes my own humbling violations of the four responsibilities I just laid out above.  We show leadership strength, not weakness, when we accept and acknowledge the times we are wrong.  Similarly, we show strength when we listen openly and allow our minds to be changed.  Doubling down on wrong-mindedness undermines the respect others have in us as leaders.

So, while we observe the sad state of discourse amongst our political leaders, let’s use it as a way to challenge ourselves to a higher level of performance within the context of “words matter.”  After all, we can’t control how they behave, but we sure can control the way we communicate and the way we impact the parts of the world that we influence.

The Key to Hiring Retail Stars

As we all know, retail success is highly dependent on the quality of the players on the team.  Average players make an average team, and stars make a winning team.  Understandably, we want all of our hires to be stars.  That means that hiring choices are some of the most important decisions we make for our business. While it may be a bit unrealistic for every single hire to be a star, you can increase your batting average by making hiring decisions that are focused on key personality characteristics.

It’s easy to be tempted into hiring the candidate who has the most outgoing personality, a great resume of experience, and can say all of the “right” things about selling and customer service during the interview.  But the things which separate star players from average players are deeper.  Use the guide below to identify candidates who have the character to be true STARS.

Sensitivity – Candidates with “sensitivity” understand their impact on others and have a certain level of humbleness that allows their interactions with others to be well-received.  Questions to assess sensitivity include…

  • “Tell me about a recent time when you hurt somebody else’s feelings on the job. How did you learn of your impact, and why did it happen?”
  • “Tell me about a recent team that you were part of. What were the team’s results, and what was your specific role in delivering those results?

Tenacity – Candidates with “tenacity” work very hard to achieve their goals and have the ability to persevere through hardships.  They are more likely to have extended time with one or more companies.  These candidates tend to have greater ability to focus on the important issues and filter out the less significant information.  Questions to assess tenacity include…

  • “Tell me about an extremely difficult project you recently had. What was the goal, what was difficult about it, and what did you have to do in order to succeed?”
  • “Tell me about something that you recently failed at. Why did you fail, and what actions did you take after failing?”
  • “Tell me about a time when you were a leader during a very complex situation. What did you do to cut through the clutter of huge amounts of information and focus your team to achieve success?”

Authenticity – Candidates with “authenticity” come across as genuine and have tangible substance behind their statements.  Authenticity is a critical component because it is the foundation of trust.  People will not accept advice or direction (and therefore will not buy) from others in whom they have little trust.  Authenticity is best gauged by good follow up questions which cut through discrepancies and statements without substance, such as…

  • “You said, ‘xxx.’ Give me some specific examples that reinforce your point.”
  • “Earlier, you said ‘xxx,’ but just now you said, ‘yyy.’ Explain to me how those situations are different.”
  • “You said you believe, ‘xxx.’ What are some specific observations you have had which make you believe that?”

Responsibility – Candidates with “responsibility” have a proven track record of being dependable and conscientious, and they take true ownership over their jobs and their teams.  Responsible people are those you can count on to do the right thing and put in their best effort even when you are not watching.  Responsible people also own up to the mistakes they make and refrain from deflecting blame.  Questions to assess responsibility include…

  • “Give me your definition of doing a good job.”
  • “Tell me about a time when your supervisor put you in charge of an important project. What steps did you take, and what were the results?”
  • “Tell me about a significant recent mistake you made and what you learned from it.”

Service Desire – Candidates with strong “service desire” get enjoyment and satisfaction out of doing good things for others.  They go out of their way to be helpful to others, and they see other people as the primary purpose of their role.  Questions to assess service desire include…

  • “Tell me about a recent time when you had a lot of work to do and customers were keeping you from doing that work.”
  • “Tell me about a time when another team member was struggling on the job and how it affected you.”
  • “Tell me about a recent customer who had a major problem and how you tried to solve it.”



3 Tips for Retail Leaders to Fix Performance Problems

As retail leaders, we all get frustrated when a member of our team isn’t performing the way we expect them to perform. That frustration is even greater when we are certain that the expectation has been clearly communicated to the team member. Here are my three tips to fix these performance problems:

  1. Establish a new frame of mind for yourself. Yes, yourself, not the team member.  Your new frame of mind is to accept the truth that most people (and that includes our employees!) want to be successful at whatever they are doing. They may have different levels of drive that they will put into being successful, but it is the rare employee indeed who shows up to work with the intention of looking bad and sabotaging the company which employs them. Once you accept that the team member with the performance problem is most likely not failing intentionally, you should be able to move past the frustration. When you move past the frustration, you enter “solution” mode, and your purpose and communication style take on a positive tone which is more likely to bring positive results.
  2. Assess whether the “performance problem” is actually a training issue in disguise. Admittedly, they can look very similar. In both cases, a team member will be falling short of expectation in some way. A “training issue’ is when the team member has never before demonstrated the ability to perform at expectation, while a “performance problem” is when the team member has demonstrated successful ability to meet the expectation in the past and is now not meeting the same expectation. It’s common for the two situations to be confused, so it’s a good idea to stop and ask yourself whether you have seen the employee meet the expectation in the past. If the employee has not performed the task successfully in the past, it is a reflection of some flaw in the training (or an absence of training altogether!), and that means it isn’t really the employee’s fault. Therefore, it’s not fair to hold them accountable. Of course there are situations where training is fully sufficient and the employee is just not able to learn the skill. That’s a different story and must be handled as a performance issue. But, the majority of training issues, if viewed as training issues, can be fixed with additional training and/or modified training that is adapted to the unique needs of the individual team member in question. By identifying those “performance problems” that are really training issues, you will automatically take on greater responsibility for solving the problem and helping the team member to be more successful.
  3. If you determine that the situation truly is a performance problem and you accept that the employee most likely wants to succeed, your empathy and intellectual curiosity should guide you to the third tip – determine the root cause. There is no point in taking a punitive approach; the team member doesn’t need to be punished for falling short of an expectation. If you truly want to fix the problem, you need to be in “solution mode,” not “punishment” mode. The first potential root cause is that the employee is not be aware their performance has slipped. So, the first step in solving the problem is to make the employee aware. The second potential root cause is that conditions have changed. For example, a cashier may have demonstrated over their first five months on the job the ability to accurately handle transactions, provide good service, and keep their till balanced. But come Friday after Thanksgiving, things fall apart.  The cashier is no longer balancing their till accurately, and cash shortages and overages have become a new pattern. The root cause may be that the increased pace of business has changed conditions so much that the cashier can no longer perform at the same level. There is almost always some changed condition at the root of a performance problem. It could be difficult personal circumstances outside of work that are impacting focus, it could be change in the other team members around the employee, it could be additional tasks or priorities which take time away from the task in question, it could be loss of motivation due to something that happened at work, etc. Your job as leader is to ask enough questions to get to the heart of what the relevant change is. And you must ask the questions with a sincere desire to learn and understand. When you find the root cause, you will be in a great position to address it with the team member in a positive, productive way.

All of these tips are aimed at the same general thing – get yourself into “solution” mode. It is true that the solution in some performance problem situations may be to move the employee out of the business. But that step should come only after you have done your best to try and solve the performance problem. By resetting your own mental context from frustration to solution, you will be best-positioned to fix the performance problem.

3 Ways Leaders Can Cut Through Clutter

One important responsibility we all have as leaders is to help our teams cut through the clutter of too much data and too many choices.  The most successful teams are those which can analyze information accurately, collaborate effectively, and make good decisions efficiently.  It’s not unusual for teams to get bogged down in complex issues for which there is no obvious solution.  The more variables there are, the harder it is to see through the confusion.  While an effective leader doesn’t necessarily have all of the answers, she or he does have the ability to clear the path so the team can find the answers.

Three ways a good leader can bring order to the chaos of complex issues are as follows:

  1. Continuously steer towards the goal and/or the problem to be solved.  It’s very common for teams engaged in a collaborative process to stray from the main point.  One person makes a statement, the next person adds a new perspective, the third person takes the discussion a different direction, and soon the team is working on a completely different problem.  An effective leader will recognize when the team has gotten off track, clarify the objective, and bring the team’s conversation back to the main point.  In order to do this, the leader must have a clear vision of the goal and must listen carefully to the evolution of the discussion.  Once it becomes obvious that discussion has wandered too far, a simple reminder of the real objective is all that will be necessary to get things back on track.
  2. Break down different aspects of a problem into two dimensions.  For example, a team may face the dilemma of how to prioritize a list of potential strategic projects which cannot all be accomplished.  The team may go round and round discussing the relative merits of each project, but it will be hard for them to come to agreement without a clear and visual comparison.  The clutter-cutting leader will help the team identify the two most important aspects of the projects to consider.  In this case, the two dimensions might be amount of revenue that will be generated from each project and the amount of resources required to complete each project.  With these two dimensions identified, the team can visually chart the projects onto a grid that contains four quadrants (High resource cost & High revenue generation, Low resource cost & High revenue generation, High resource cost & Low revenue generation, and Low resource cost & Low revenue generation).  Projects which fall into the low cost, high revenue quadrant should be prioritized at the top, while projects which fall into the high cost, low revenue generation should be the ones which are first to fall off of the to-do list.  The visual representation into two dimensions brings clarity to the problem in way that every team member can grasp.
  3. Create a series of prioritized binary choices.  Complex issues are difficult because they have many angles and many different parts.  Teams can easily become paralyzed by layers of micro-decisions that all seem intertwined and interdependent.  A clutter-cutting leader will help a team sort through the ambiguity by breaking down multi-dimensional questions into a series of yes/no or otherwise close-ended decisions.  For example, a team that is working on the launch of a new product is faced with the difficult decision of setting the roll-out price.  But the price issue can be directly related to other aspects of the new product roll out such as competitive positioning, costs, marketing plans, etc.  The team might endlessly discuss the pros and cons of various price points without arriving at consensus.  An effective leader will lay out several questions in a way that will guide the team to consensus, such as…
  • What variable costs must our product’s price cover?
  • What is the competition’s price?
  • Do we want our product to be priced higher or lower than competition?
  • How do we want this product to be priced relative to our own existing product(s)?

By centering discussion on these tangible questions, the team will be led to make a series of micro-decisions.  Each of these micro-decisions will move the team a step closer to the big question of “What should our price be?”

By using these clutter-cutting techniques, leaders will be shining a spotlight on the path ahead, and teams can become more effective with the process of collaborative decision making.

Probabilistic Thinking to Aid Decision Making

As retail leaders, our world is full of choices for which there is not one clear answer.  Accountants operate under the straight forward rules of math.  Engineers operate under the clear logic of physics.  Even attorneys operate under the documented rules of law.  In contrast, as retailers, we make decisions every day that are based on the uncertain nature of human beings.  If we try too hard to find certainty, we end up paralyzed and unable to make decisions at all.  If we fail to analyze situations enough, we end up making decisions without proper consideration of all that we should consider.  So how can we find an effective “formula” for decision making that accepts the impossibility of certainty AND gives us robust objectivity?

One solution is to use probabilistic thinking.  This means envisioning the value of various possible outcomes, assigning probabilities to each possible outcome, and doing the math to determine an expected value for each potential choice.  Comparing the expected values of various options gives us a probabilistic perspective on which choice to make.

Consider the example of one of those tough decisions we often must make.  We have an open supervisory position on the team, and we must choose from three candidates.  One possible choice is to promote a long term salesperson who has paid his dues.  Another choice is to promote a young, up and coming salesperson who shows lots of promise but hasn’t yet acquired the level of experience of the long term employee.  And the third possible choice is to hire an external candidate who already has supervisory experience but would be more of an unknown gamble.  As you are reading this, your mind is probably filling with all of the pros and cons of each option.  You are probably also beginning to argue with yourself about which of the pros and cons are most important to focus on.  If you were really in the situation, your mind would also be filling with assessments of the three candidates and how their specific characteristics match up to the pros and cons.  That’s a lot for the conscious brain to sift through, and without more structure, you will probably go round and round, floundering in the uncertainty of it all.

A probabilistic approach will give more structure to the analysis of the options.  Let’s take four steps as follows:

  • List all of the criteria that we should consider about the candidates for this decision.  In real life, there are probably dozens of criteria to be considered for this type of decision.  To keep things simple for this example, we are going to use just three… ability to coach people, ability to sell, and ability to fit into the existing culture.
  • Weight the criteria in terms of importance and relevance.  In this case, we want to weight the criteria based on how important each will be to the chosen candidate’s success in the role.  You can use whatever weighting scale you wish; for this example, we will weight from 1 to 10, with 10 being the most important.  Ability to coach people will be a 9 (since that’s the primary objective of the role), ability to sell will be a 3 (since this is a supervisory position), and fit into the existing culture will be a 4 (since some culture change may actually be refreshing).
  • Determine the probability that each option will fulfill each criterion.  In this case, we will determine the probability that each candidate will be successful in coaching employees, selling, and fitting into the culture.  We can create a chart like the following: Probabilistic thinking (4)
  • Do the math to calculate the expected value of each possible choice.  In this case, for the long term employee, we multiply 50% x 9, 80% x 3, and 90% x 4, and then we add those three products together to get 10.5.  When we do the same thing for the up and coming employee, we get 10.7, and when we do the same for the external candidate, we get 7.2.

So, the expected value of promoting the up and coming employee is higher than the other two options, though promotion of the long term employee is a close second.  Does this mean that choice will definitely work out best?  No, not at all.  Remember that we can’t eliminate uncertainty.  All we can do is give ourselves an objective way to analyze the uncertainty we know exists.  The expected value difference in this example depends largely on our assessment that the up and coming employee has a better chance of being an effective coach than the long term employee.  But, we still have only assigned a 60% probability to that result.  This process does give us an objective way to analyze our assumptions.  With a sharper focus on the one major defining difference, we can dig a bit deeper on that issue with our candidates and test our assumption more fully.  Perhaps that will lead to a change in our assessments, or it may further solidify our beliefs.  Either way, we will have used probabilistic thinking to improve our decision making process, and we will have pulled ourselves out of the endless circle of debating within a world of ambiguity.

Self-branding to Improve Leadership Effectiveness

Have you ever given thought to the idea of self-branding as a way to improve your effectiveness as a leader?  Consider what Nike means to the world of athletic footwear, or Federal Express to the world of package delivery, or BMW in the automobile industry.  Chances are that once you read those names, you immediately had a vision in your mind of what each company stands for (“Just do it.”  “When it absolutely, positively has to be there overnight.”  “The ultimate driving machine.”).  More importantly, you also had a picture in your mind of the experience you could expect from each company if you were to interact with them.  That’s the power of a good brand, and a good self-brand can do exactly the same thing for you as a leader.

But make no mistake, self-branding is NOT about self-promotion.  It IS about actually defining and delivering on an experience that you want to stand for.  And it’s about picking a brand image that fits with your leadership strengths and then staying true to that image.  A strong self-brand will improve your effectiveness in the following ways:

  • Others will know what to expect from you, and that will make it easier for them to commit to you and to follow you.
  • You will become more focused on your strengths and more confident in the value that you contribute to others who interact with you.
  • You will build a reputation for expertise on certain skills, and that reputation will feed a virtuous circle which leads to ever-increasing awareness by others of what you stand for.

Building a self-brand begins with an exercise in self-discovery.  Through a good understanding of the strengths you possess (from your personality, your experiences, and your skills and specialties), you can make confident commitments to certain experiences you will deliver to others.  Then your self-brand becomes a “north star” that will continuously guide you to delivering on those commitments.

To learn more and to start the process of establishing your self-brand, go to…

When prompted to “Redeem a coupon,” enter LIFRIEND and you will receive 50% off, leaving the price to you at only $12 for this 1.5 hour video course that will give a whole new perspective to leadership effectiveness.