Supermarkets have avoided most of the major blunders that other companies keep making over and over. Can their winning streak continue?
Some say the definition of insanity is doing the same thing over and over again and expecting a different result each time.
But how many of you sometimes feel like a candidate for the “funny farm?” Rest assured, you are not alone. But maybe it is time to apply some commonsense therapy to the business.
My inspiration for this column came when someone sent me an article from CBS MoneyWatch titled Ten Dumb Mistakes Companies Make Over and Over. The author, Steve Tobak, a partner in the business strategy firm Invisor Consulting, mentioned Kodak, which invented the digital camera in 1975 and sat on the technology for fear it would kill its cash cow—film. Then, there is the former CEO of Digital Equipment Corp. who questioned why anyone would want to own a computer.
The supermarket industry has not made mistakes of this magnitude. But I think it is interesting to take Tobak’s list and see how it applies to grocery retailing.
1. Killing promising new businesses to maintain old ones: Under the right circumstances, cannibalizing existing businesses to make way for new ones might not be a bad idea. You have to wonder how big the meals business might be if some retailers didn’t worry about it taking business away from other departments or really paid attention to consumer trends and quality.
2. Lack of objectivity and perspective: Getting pumped up at conventions about asking employees and customers for their input and then ignoring it completely in favor of the same old safety net thinking.
3. Failure to articulate the company’s strategy: A&P, Winn-Dixie, Albertsons, etc…etc.
4. Chronically bleeding red ink: If something, or someone, is not working (up to and including CEOs) let it or them go. There is a natural tendency to preserve practices and policies that have outlived their usefulness—whether it is a merchandising set, pricing policy, fad or trend. Do not be sentimental.
5. Not challenging the status quo: See #4. Additionally, the best companies are those not afraid to try new things. For instance, how many retailers out there keep an eye on food trends in restaurants and other places. Partner with manufacturers. Do not think of this solely as their responsibility.
6. Poor risk management: See #s 2 and 5. Do the research and try new things. But do not go overboard with new items. Everything has to earn its space. Make the investment in IT rather than trying to patch up an old legacy system. Beware of that bargain-priced parcel in an up-and-coming residential community that has yet to be built.
7. Ignoring hot new trends: The archives are filled with stories like the earlier one about the Digital Equipment CEO. Closer to home, we might cite retail executives who still think the Internet and social media are expensive, time-consuming follies. Or, retailers who think that consumer demand for Latin food means chips and salsa.
8. Dumb customer service policies: It is not a customer service policy per se, but lack of enforcement. Keep employees off their cell phones—especially at the checkout. I cannot think of one customer who likes waiting patiently while a checker finishes texting her BFF.
If you want to talk about great customer service, look to Wegmans. I was in the bakery department recently, waiting for the coconut custard Danish—I cannot help it, I am addicted. The young woman behind the counter says, “Sir, you don’t have to wait. I’ll come and get you when they’re ready.” Surprise! She did and as a result I probably bought twice as much stuff from the bakery as I originally intended.
9. Harassing customers: Here, Tobak talked about spam in inboxes and dealing with companies that do not honor unsubscribe requests. I’m not sure this can be applied to our business but I keep wondering about bombarding customers with messages on their mobile devices. When does aggressive promotion become stalking?
10. The Peter Principle: I have not heard this one mentioned in a while, but it is as relevant as it always was. Do we keep using the same people, policies and ideas after they exceed their maximum level of competence? Is an old-fashioned hierarchy preventing your company from competing effectively?
We may not be insane but everybody can use a little constructive therapy now and again. Tell us what you think.