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Learning the Leadership Lessons of Retail

While shopping for gifts this holiday season, consider these valuable insights on how to be an effective executive.

(originally published by Booz & Company)

’Tis the season to shop: As we endured Gray Thursday, Black Friday, and Cyber Monday a few weeks ago, I reflected on some of the enduring lessons from the early years of my career in retail that I have carried forward into my study of leadership. I worked under Bloomingdale’s legendary CEO Marvin Traub as well as in several other organizations. Retail is as tough a business as any: Competition is fierce, customers are fickle, and an ill-timed storm can crush a critical selling period. It is also a rich source of practical insights for any executive who works with people (in other words, all of us). Here are a few lessons I still call upon today.

Don’t just be different, be special. Under Traub, Bloomingdale’s was legendary for sourcing unusual products and presenting them in spectacularly original ways. People even collected the store’s paper shopping bags. With all the talk of reinventing business models and cutting costs, many executives have forgotten that if your business isn’t special, it’s forgettable .

If your business isn’t special, it’s forgettable.

And it isn’t just the physical environment or the merchandise; it’s the people. If you want to engage employees so that they engage your customers, make them part of an extraordinary enterprise. You must delight customers to the point where they form an emotional attachment to your brand—only then can you delight shareholders as well. Bloomingdale’s knew this, then. Companies such as Starbucks and Patagonia know it today. How many banks, airlines, or government agencies can make this claim?

Pick up the trash. A good retail executive will not hesitate to stoop down to pick up a scrap of paper on the store floor when she sees it; she won’t call someone over to pick it up and, unless there is an unusual amount of trash around, no other comment will be made. There are two lessons here. First, take time to be visible where customer interactions actually happen: Walk the sales floor, pick and pack in the warehouse, and answer some customer complaints. Then, model the behavior you want others to follow: Sweat the details, show emotional intelligence with customers, care about the work environment, and pitch in for joint success.

The most effective retail leaders I’ve worked with knew the stockroom clerks, the salespeople, and even the maintenance staff—by name. They didn’t rely on an elaborate program from human resources; instead, they employed the power of human contact. They recognized individuals and, as a result, were able to get direct, honest feedback from employees throughout the organization.

Don’t blow a long-term relationship over a short-term glitch. In retail, you have the opportunity to see your customer face to face (or, these days, screen to screen). Retailers know that any hiccup in the process—from lack of stock, to long lines at the register, to glitches in the online ordering process (I’m talking to you,—can cost you a sale today and perhaps a relationship forever. Create clarity around what a great customer experience feels like in your context. Get specific details and tell stories. Then recognize and reward those who deliver it. Remember that no matter where you work, your customers are comparing the experience you offer to Zappos or L.L. Bean. In today’s interconnected world, people do not restrict their comparisons to your perceived competitive set—they’re comparing you to everything they see and experience.

I recall making the case to my boss that Bloomingdale’s should pay for a leather coat that a customer ripped on the sharp edge of a store fixture. It was, in my estimation, the store’s responsibility to keep its fixtures in good repair. My boss agreed, in part because the store knew that the majority of customers who returned something spent as much or more than the value of the return before they left the store—if they had a good experience.

Not all the lessons were positive. One of these was that when your name is on it, you own it. Some organizations—from universities, to banks, to many retailers—treat their sales channels or business units as completely separate entities, and there may be legitimate back office reasons for this. However, a customer may not see the separation, and if they can see a connection, you are expected to be able to put corporate boundaries aside and make things happen across your organization. For example, a clothing store should be able to take a return, even if the original order came from a catalog.

Another lesson is that frontline employees are too often undervalued. If you want your enterprise to be special; to deliver an extraordinary experience; and have unity of mission, execution, and values, you depend on the people at the bottom of your hierarchical pyramid. Think about how your pay and benefit policies, training efforts, and other support mechanisms align with your desires. The ringing of the cash register is one essential short-term measure of returns, but smiles on both sides of the transaction are a critical metric for long-term success.

Throughout my management career, I looked for people with retail experience when I was hiring. I knew that if someone had done well in retail, he or she could work with people, would not see any task as demeaning, and was probably used to getting paid too little. Refugees from the retail sector have always proven to be competent, pleasant individuals ready to work hard for a reasonable salary. Perhaps you should look there, too.

As you walk the aisles of your favorite stores this holiday season, try to spot the leadership lessons amid the bargains.

Eric McNulty

Eric J. McNulty is the associate director of the National Preparedness Leadership Initiative. He is the coauthor of You're It: Crisis, Change, and How to Lead When It Matters Most (PublicAffairs, 2019). He writes frequently about leadership, change, and organizational culture.

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