Challenging Corporate Policy! What I Did When It Didn't Make Sense
I was managing the plumbing department of a big box retailer. The economy was sluggish and head office made it quite clear that managers were to control costs and raise revenues. Nothing like walking a tightrope!
Of course, there are several actions a department manager can take to accomplish this objective:
Within a 50 mile radius of the store many of our customers had their water supplied by wells on their property. The water quality was hard and often had an odour. Iron content was high. These customers relied on softeners and water filters to improve the quality of their well water. These particular water filters were located (buried?) in the middle of the department, as per the merchandisers' plan. However, each sale of a filter netted a 30% profit. In contrast, each sale of an underground sprinkler system netted a 5% profit.
It did not make sense that a high profit product should be buried in the department. Water filters needed to be exposed to customers! Besides, sprinklers do not sell between November and March due to the cold Canadian winter. Water filters sell year round!
I wanted to switch locations with these two products. In the winter months, water filters could be featured at the front, not sprinklers. In the remaining months, sprinklers could be featured. The plan was to rotate product twice a year. Unfortunately, I had to get the store manager's approval for the merchandising change.
When I approached him with the idea he made reference to the plumbing merchandising manual and floorplan. No such changes were to take place. To his credit though, he suggested I contact the merchandisers at head office and plead my case. Finally, after several attempts to speak to a merchandiser, I was told my changes were not allowed as they contravened the corporate floorplan (i.e against the corporate policy).
To me none of this made sense! I had a way to increase the profitability of the department, but because no one at head office came up with the idea, they weren't even going to try it. Well, I had other plans.
I arrived early to work, one cold winter day, determined to re-merchandise my department. Being winter the sprinklers just didn't sell. I tore down both displays, had product strewn across aisles, and dashed between both locations switching out stock. Hearing all the ruckus, the store manager wandered by and just about had a stroke! My department was in organised disarray. Not only that, the district manager (DM) was on his way to perform an impromptu store walk. The store manager made it clear that any repercussions caused by my re-merchandising were mine alone. I accepted full responsibility.
I continued working when the DM walked into the department, small entourage of managers in tow. He asked what I was doing. So, I explained my plan, my reasons, and the process I had taken. I offered that the floorplan did not account for changing seasons and that the department was missing out on additional revenue by not implementing the changes I was suggesting. His reaction? "Carry on!"
My re-merchandising of these two product lines proved to be quite successful, and profitable!
In this scenario, the corporate policy was well suited to weather, and local market conditions, in Atlanta, Georgia, and not Ottawa, Canada. Perhaps corporate policies could be structured in such a way as to reflect regional differences whereby managers on the ground can exercise a certain degree of flexibility within the corporate policy.
Just a thought.
Of course, there are several actions a department manager can take to accomplish this objective:
- Curtail labor costs by reducing staff hours (and working more yourself).
- Transfer slow moving product, and reduce inventory.
- Control purchasing.
- Reduce department shrink.
- and my favorite, Re-merchandise the department.
Within a 50 mile radius of the store many of our customers had their water supplied by wells on their property. The water quality was hard and often had an odour. Iron content was high. These customers relied on softeners and water filters to improve the quality of their well water. These particular water filters were located (buried?) in the middle of the department, as per the merchandisers' plan. However, each sale of a filter netted a 30% profit. In contrast, each sale of an underground sprinkler system netted a 5% profit.
It did not make sense that a high profit product should be buried in the department. Water filters needed to be exposed to customers! Besides, sprinklers do not sell between November and March due to the cold Canadian winter. Water filters sell year round!
I wanted to switch locations with these two products. In the winter months, water filters could be featured at the front, not sprinklers. In the remaining months, sprinklers could be featured. The plan was to rotate product twice a year. Unfortunately, I had to get the store manager's approval for the merchandising change.
When I approached him with the idea he made reference to the plumbing merchandising manual and floorplan. No such changes were to take place. To his credit though, he suggested I contact the merchandisers at head office and plead my case. Finally, after several attempts to speak to a merchandiser, I was told my changes were not allowed as they contravened the corporate floorplan (i.e against the corporate policy).
To me none of this made sense! I had a way to increase the profitability of the department, but because no one at head office came up with the idea, they weren't even going to try it. Well, I had other plans.
I arrived early to work, one cold winter day, determined to re-merchandise my department. Being winter the sprinklers just didn't sell. I tore down both displays, had product strewn across aisles, and dashed between both locations switching out stock. Hearing all the ruckus, the store manager wandered by and just about had a stroke! My department was in organised disarray. Not only that, the district manager (DM) was on his way to perform an impromptu store walk. The store manager made it clear that any repercussions caused by my re-merchandising were mine alone. I accepted full responsibility.
I continued working when the DM walked into the department, small entourage of managers in tow. He asked what I was doing. So, I explained my plan, my reasons, and the process I had taken. I offered that the floorplan did not account for changing seasons and that the department was missing out on additional revenue by not implementing the changes I was suggesting. His reaction? "Carry on!"
My re-merchandising of these two product lines proved to be quite successful, and profitable!
In this scenario, the corporate policy was well suited to weather, and local market conditions, in Atlanta, Georgia, and not Ottawa, Canada. Perhaps corporate policies could be structured in such a way as to reflect regional differences whereby managers on the ground can exercise a certain degree of flexibility within the corporate policy.
Just a thought.
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