June 8, 2016
Many will ask “Do numbers really matter when managing store performance?” Why does the existence of performance numbers impact the very performance they measure. It is often stated ‘If you want to improve something measure it.’ The statement is rarely disputed but not always supported. There are just as many reasons not to analyze your data as there are to do so. a common one is that it is a sacrifice of productivity and time.
Managing Stores
When people are very busy, there is a tendency to minimalize the measurement and assessment effort. However, when measurements and analysis are limited, you may not be given the underlying reasons for your performance. You can end up spending the more time than you saved to hunting for answers. So both sides argue for saving time and getting work done. These conflicting reasons and results present the question of what the true balance is between effective analysis and efficiency. There seems to be two camps – believers .and non-believers.
Non-Measurement Justification
1. What can anyone really do about sales anyway?
2. Driving sales is done with promotions and that just costs you money.
3. The same amount of stuff is bought anyway, all that you do is change when it is bought.
4. All you need is a basic daily summary to make sure things are okay the rest is just a waste of time.
5. Measuring takes time and money and keeps key staff from doing the important operational work.
These ‘reasons’ help to explain the value of numbers. First, the person may not be a retailer. Sometimes operations people are placed in roles that require marketing and retail skills. It may be that a non-numbers person needs a new perspective. Secondly, it implies margins actually do impact sales. Sales and profits are linked are not identical. Naturally, profit margins and sales levels are two ways to drive total profits. Profit margins can impact price and price certainly affects sales.
Competition
Point three may be the most important. With limited markets, not driving sales may allow competition to get it. If there are limited opportunities to sell, a competitor taking a sale is costing you one. Finally, the cost of measurement is not the same as the value it provides. It may be that choice of measurements is the issue. Additionally, it may be the use of the data as well that determines its impact. Obviously, anyone that does not think tracking is useful, will not use the numbers well.
Indeed, the second part of the measurement tenant is to be careful what you measure. Of course, any measurement system requires time and money. Further, most companies report that their staff is working hard and feeling stress. It is important not to overload workers or distract them for the main job. However, challenges to managing are not the same as the value of managing something well.
‘Without data you’re just another person with an opinion. ‘
W. Edwards Deming
Measurement justification
1. Understand if things are better or worse.
2. Problems are listed so fixes are easy.
3. Tracking ensures waste and shrinkage do not hurt performance.
4. Shared results allows everyone to work with the same perspective.
5. Measurement shows staff what management values. Having a scorecard clarifies goals.
6. Results justify rewards and explain restrictions.
Why Numbers Matter
Obviously, there are arguments for both sides. When a proper use of measurements is put in place it addresses both the plus and minus points. Even if you agree to measure, it is important to make the measurements as simple and cost effective as possible.
Using the data must be straight-forward. Make it easy to fit into the work flow. Of course, it fit the time constraints for work. With good numbers, key insights into key performance are clear. Leading indicators drive work to the desired results. That is, numbers matter for store performance.