The economy is looking like it is getting stronger and beginning to turn around. It appears that the recession has bottomed out. And many retailers who survived are hoping for the return of the “good old days.” The days when you didn’t have to be outstanding, you just had to “be there.”
Economists say the recovery will be slow, so running a business may be easier, but it will continue to be a dogfight for customers. The bad news is that you still have to be outstanding. It’s still about survival of the fittest. Those who thrive will be those who continuously get better.
The most successful retailers are those who are never satisfied; they are relentlessly seeking ways to improve their businesses; i.e., systems, policies and procedures, profitability, cash flow, employee productivity, employee retention, etc. They are always looking for ways to improve. Hopefully, most of us improved our businesses by becoming more lean, efficient and effective during this recession.
High jumper and Olympian Dick Fosbury was like that. He had difficulty improving using current high jumping techniques. He was determined to jump higher. So he began experimenting with other ways of doing the high jump. Gradually, Fosbury developed a revolutionary style that entailed jumping over the bar backwards head-first while curving his body and kicking his legs up in the air at the end of the jump. This required him to land on his back. Many made fun of the new technique, with one newspaper captioning a photograph of the jump, “World’s Laziest High Jumper.” The technique gained the name the Fosbury Flop after a reporter for a Medford newspaper wrote that he looked like a “fish flopping in a boat.”
His technique truly changed the sport at the 1968 Mexico City Olympic Games. Despite skepticism from judges and coaches, Fosbury won the gold medal. Of the 36 Olympic medalists in the event from 1972 through 2000, 34 used “the Flop.”
Today it is the most popular high jumping technique in the sport. Since Fosbury introduced it, the Fosbury Flop has persisted as the most common and most successful high jumping method. It characteristically employs a low center of gravity and a low center of mass. The world record for the high jump is higher today, because athletes are using the “Fosbury Flop.”
It took years for Fosbury to improve and fine tune his technique. But for the jumpers that followed, all they had to do was copy his methods. And copy they did. They used the Total Quality business practice of benchmarking a best practice. The Fosbury Flop was the best practice.
You can do the same thing in your business. Make sure to constantly strive for being the best sales organization, the most responsive customer service department and the most profitable retailer in your area.
Fortunately most retailers don’t need to create new techniques and methods to move their business to higher profitability and sales. They can search out and adopt the best practices of their competitors and peers. Don’t forget to look at other industries for additional ways to improve. It’s a matter of looking for the “Dick Fosburys.”
Once those best practices have been identified, they can be implemented and then benchmarked to maximum effectiveness. Benchmarking is the process of comparing one’s business processes and performance metrics to industry bests and/or best practices from other industries. Improvements from learning from others’ best practices mean doing things better, faster, and cheaper.
I know retailers who constantly complain about installers or employees or cash flow or profitability or… you name it. I’ve heard the complaints, yet rarely does anything change. Many of us are too busy, or too reactive to sit down and contemplate what we could do to improve our business. Most of us are spending way too much time working in our businesses, instead of on our businesses.
We continue doing the same thing over and over again, yet expect different results. We all know what Einstein said about that: Insanity! The way to get out of that rut is to relentlessly research and pursue best practices. How do the best retailers keep getting better? They are relentless at research, at networking, at attending conventions (like Surfaces, Coverings and others) and studying the best practices of other retailers. They are looking for the next Dick Fosbury.
Look at and identify your problem areas – What needs improvement? How are your systems? Your cash flow? As you identify problem areas, do research or network or call your peers. Ask what they do. Ask for ideas. Hire a consultant. Whatever you do, don’t stop searching for the next best practice. Some retailers are so involved in their businesses they can’t see the forest for the trees.
Consider the questions below to gauge your financial management.
*Do you have financial-management software that is easy to use, requires minimal time and expertise, and provides the information you need?
*Do you monitor your most important financial numbers by the 5th of each month? Which numbers do you watch?
*How do you set prices? Based upon customers’ opinions about value; a percentage of your cost?
*How are sales commissions established? Using a schedule that assures sufficient profit for the company; with a generic commission schedule?
*Do you know your Break-Even Point?
*Are your profitability and cash flow increasing each year enough to increase the market value of your company?
*Do you review Accounts Receivable at least once a week?
*Do you have a system that assures you pay Accounts Payable on the last date that maximizes your cash-flow and term-discounts?
*Do you have a written or posted standard payment policy?
*Do you require the customer’s signature on each contract before proceeding?
*Do you have a board of advisors, or group of people to whom you can turn for advice, and backing for your tough decisions?
This is just a short list. For those who would like my list of best practices, email me at firstname.lastname@example.org. Extraordinary retailers are relentless in their striving to get better. They didn’t invent the wheel or the Fosbury Flop, but are constantly on the lookout for the next Dick Fosbury. Do you want to jump higher?