Yesterday, we had the CEO of a large retail chain as a visitor in the Stanford class we Huggy Rao and I are teaching on scaling-up excellence. I will refrain from using his name as this a class, not a speech to the public. But he said something interesting in response to a question about the challenge of "descaling bad behavior." When I asked what the "warning signs" he looked for during store visits, signs that management was slipping, he offered two metrics (which he said could be applied to many others retail settings too):
1. Am I -- and other customers -- warmly greeted by employees when they enter the store? He said this was a general sign that employees were focusing on customers. He added that the small social connection and associated feeling of obligation makes it a bit harder for people to walk out of the store without buying anything.
2. Are the bathrooms clean? He joked that people in his company must think he has a small bladder because he is always asking to go the bathroom. He argued that dirty bathroom are a sign that the managers and employees are failing to execute in other ways, and because customers react so negatively to dirty bathrooms, it was especially bad for motivating sales and return visits.
He said that, when he spots these signs, he immediately has a huddle with the store manager and employees to explain why they are of such concern to him and to persuade them to start changing their behavior right away. He also emphasized that his firm uses all kinds of quantitative measures to run the stores, but as he pointed out, these simple measures add something that can't be seen just from looking at the numbers.
Ireally liked the elegance of his two measures and how he tied them to his immediate actions.
I wonder, what other simple measures do you use -- as a customer or manager -- to assess if a store is being ran well or badly?
P.S. I was sitting next to a marketing professor from another university during the talk. He argued that if you look at Wal-Mart's recent financial challenges (which the press seems to attribute to such deep cuts in the merchandise prices), part of the problem may be that they are failing along the lines suggested by this veteran CEO. As he noted, Wal-Mart is eliminating some greeters and moving others away from the entrance; an article in RetailWire comments on reduced and altered use of greeters: "A lot of changes have taken place at Walmart over the years since Sam Walton's passing, but the latest may have him flipping over in his grave. " That marketing professor also asserted the cleanliness of Wal-Mart bathrooms have slipped in recent years (This is hearsay as I am not a regular Wal-Mart customer; I did try to look online for evidence to support the claim, and while there were individual complaints, I didn't see any systematic evidence one way or another).