Retail Strategies and Failure

So, what leads to failure?  There is a wide range with everything from basic human performance to acts of God and Murphy’s Law which is probably my favorite.  Another one of my mantras is expect the best but plan for the worst.  Again this shows how we always have failure in the equation but it is not our favorite agenda to deal with it.  Failure ranges from deliberate deviation, lack of competence to something that is just so complex it cannot be executed.  I used to love those cardboard display pieces that would come into a store with the easy to assemble directions that I could never ever get it to come out like the picture.  Please send two because I was guaranteed to destroy the first one.  There is another level of failures that exist in a controlled environment to prove or disprove a hypothesis but we will not address that in any great detail in this article.  As we explore the spectrum of failure, the increased ratio of variables to a process or policy makes it increasingly difficult to execute and increases the predictable failure rate.  We all want the 100% execution or return on our assets and efforts but myself at least have always planned for a predicted failure rate.  Whenever trying to estimate sales revenue, margins and expenses I have to build that “pad” into the equation.  I quickly became tired of having my head handed to me after not taking this into effect. 

We try to avoid failure for the most part by building structures to reduce the variables we have been discussing.  Everyone from Ford to Ray Kroc developed structures to reduce the variables or improve the speed of the required task by repetition of the task.  Turning men into machines was a common criticism of this process.  It took the soul out of man.  As we move down the timeline of history, we continue to seek the balance necessary. Using policies and procedures also allows us to establish benchmarks to measure productivity and improve working conditions.  Back in the day, there were just a few issues such as child labor, hazardous working conditions and just about every other abuse of human we could imagine.  And it is always worse than what is documented in the movies.  Anyone who has traveled to developing nations knows the struggles they have trying to achieve growth, reduce income disparities and not establish so many governmental controls that free enterprise is strangled. 

Case studies at Harvard ranged from a Toyota assembly plant to the R & D department of Eli Lilly.  Toyota was cited as having one of the best production and quality lines in the business.  Tasks were doable, codified, internal customer specifications well established and quality control verified at multiple check points during the process.  The Eli Lilly system was as controlled but the outcomes of these systems were entirely different.  While Toyota was looking for a zero defect outcome, Eli Lilly wanted failures to establish new frontiers and break away from the outdated medications of the past years.  The issues with Toyota’s production system were inattention not by the actual workers on the line but with plant management which was not holding the line accountable.  As a general rule, human beings we know take the easiest path possible. 

So how do we get away from the notorious blame game?  First, you must have a psychologically safe environment.  If no one wants to stick their neck out, no one will and you will be the one in the dark.  Integrity, walking the talk and truly encouraging open communication is essential.  I used to love walking into an office to relay a poor result and being screamed at until if felt like my face was melting.  There is venting about a situation and there is killing the messenger.  Neither is professional and should be avoided.  Next, make sure status is not a necessary component of the communication process.  You want the entry level line worker to feel as comfortable as the senior VP.  In studies conducted in various organizations, status could be directly linked to psychological safety while in others there was no correlation at all.  Rather than the caste system in some cultures and/or companies, management in the safe feeling companies had done an excellent job in truly abolishing barriers.  A recent article in the Wall Street Journal on India discussed the difficulty a growing economy was having trying to eliminate or even just reduce the caste system.  The country is experiencing the increased division that new money can cause.  With history and habit patterns as established as India’s are, it will be very difficult to break down the walls.

Next, a company must have a way to measure, evaluate and correct the failure.  All of these must be conducted in a framework that still maintains accountability.  The worst integrity breach of all is losing accountability and letting poor performers drag down your A team.  Not only will failure not be reported and corrected, it will become the new norm.  At that point you can say bye bye.  To recap establishing a safe environment, frame the work accurately, embrace the messenger, acknowledge limits, invite participation and make sure to hold people accountable.

More To Come