Observing the Operation of the Business

As consultants, we have visited many wholesalers’ stores and warehouses over the last 26 years (Jen hasn’t been visiting quite that long).  Often the visits are a part of a “corporate physical” engagement wherein we are taking an objective look at a company in order to provide the owners with a practical punch-list of actions to improve the business.  The process looks into all of the company’s bodily orifices to look for diseases that can be cured through treatment.  

As we have mentioned in previous columns, at the heart of the process there are visits to the company’s locations, and private conversations with many employees.  We have learned that recommendations based upon 2nd- or 3rd-hand information supplied by the owners does not provide the breadth of information required to properly apply our experience to the situation.  As we talk to employees, we find that they are almost always willing, and often excited, to provide their insights into the company’s problems and also the, sometimes obvious, solutions to those problems.  They know the problems, they often know the solutions, but nobody has taken the time to ask them.  This internal wisdom exists at all levels of the company.  We have gained critical knowledge from an executive vice president who was uncomfortable expressing his opinions to the owners, to a young truck driver who was deemed too low in the organization to offer any real help.  Each person has a unique perspective that can add value and nuance to the picture.

Observing the operation of the business — This involves looking at the business with a fresh set of eyes to see the good, bad and ugly side of the operation. All of us get into a rut where we walk by the water-spotted ceiling tile, the damaged paint on a door or the dirty bathroom without noticing.  Visitors and customers probably DO notice the situations and are given an impression of your business…good, bad or ugly.

We are happy to come into your situation and to work through the process. Over the years, the results have been pretty good where the owners were willing to listen, evaluate the recommendations and then to take ownership for implementing the punch list.

You can do some of the process without us. Even with the very best of intensions, it will probably not be quite as objective since objectivity is difficult for most humans.  Still, there is much to be gained in the effort. Here’s an outline for the process:

Talk to a bunch of people to get a diverse perspective — You want to look at all sides of the elephant in order to gain a 360-degree view of the animal.  Each person will bring different information to the party, with different takes on the situation.

Talk to people, one at a time — Many times people will gather the team together for a group hug thinking it’s an expedient way of getting input.  The group dynamic will channel the feedback and may prevent some from providing anything.  Typically, this results in the dominant type-A folks driving the discussion while the other non-A types sit and hope for a quick end to the suffering.  We think some wholesalers use this approach so they can pretend they are seeking input while intending to suppress any real candid feedback.  If you do get candid feedback, one team member’s negative views can spread discontent in this open forum.   

Previously, we mentioned the young truck driver’s insights.  He provided a ton of ideas and a customer centric set of observations that were pivotal in understanding his company’s problems. As we attributed the ideas to the driver in our report to the owner, the owner said, “Wow, he has never said a word in any of our meetings or talked to me about his ideas.” The kid knew the problems and had suggestions on how to solve them.  

Talk in a private setting — If you want to preclude candor, talk in a location where others can overhear the conversation or where there are continuing interruptions for either party in the discussion.  

Listen! Don’t talk, listen — You will need to introduce the process as you talk to people, but then let the room go silent.  As we have said before, take notes for a couple reasons: 1) If you are talking to a bunch of people, you will want to keep the conversations straight; 2) It shows respect for the person providing their thoughts.  When you listen actively and take notes, it demonstrates that their ideas have value.
Ask non-directive questions —  These are generic questions where you are attempting to remove your own personal bias from the discussion.  For example:  “Can you think of any areas where the company needs to improve?”

Allow off-the-record comments — Some of the best information may be off the record.  If you want people to continue to provide information, you must honor it as if you were a priest taking confession.  Don’t put off-the-record comments in your notes, and don’t disclose them to anyone, ever.  Of course, there may be limitations if illegal acts are involved.  In that event, talk to your attorney.
Ask questions — To clarify the ideas and to demonstrate interest and understanding, ask for examples to further improve your understanding.

Observe the operation of the business — This is our walkabout checklist as a starter for your facility inspections:

1. Signage:  Maintained, lights in working order, properly visible.  Always show the website address. 
2. Driveway and parking lot: Clean, potholes filled, parking spot clearly marked. “Customer only” spots marked AND never used by employees, owners, owner’s spouses, sales reps, etc.
3. Hours of operation, display: Clearly marked in large enough type that they can be viewed from a distance and easy to find on the company website.
4. Hours of operation, accuracy: Respected, as in, really open and operational at the opening time, and fully operating until closing, possibly after, if customers are present.
5. Emergency contacts:  On the door and on the company website.
6. Front door: Clean and any signage in good shape.
7. Counter, general: Clean, clear of clutter, computer terminals clean, keyboards clean.
8. Counter, marketing:  Planned and measured marketing materials/demo units, any marketing displays properly maintained and removed when in disrepair.
9. Coffee area: Very clean, with proper accessories.  Some wholesalers win the first order of every day by the way they provide coffee and amenities to customers. Some always provide coffee, water and ice while providing extended amenities like donuts, snacks, hot dogs, popcorn, etc. on a regular or ad hoc basis.
10. Bathrooms: Very clean, properly stocked.  Checked at least daily.  A marketing opportunity to show plumbing customers new products (not a circa 1980s pink commode).  Make sure they are in good working order.  Also, hope we do not need to say this:  If you have changed fixture or faucet lines or are in a leased facility, try not to promote competing fixture or faucet lines…it just looks bad when you don’t like your own lines enough to use them regardless of the reason.
11. Ceiling tiles: Clean throughout the facility.
12. Lighting: Clean, bright and working throughout the facility.  Some stores feel like you are walking into a dive bar, not a wholesale branch…they just feel kind of depressing.  Just because you are barcoding, doesn’t mean you can pick orders accurately in the dark.
13. Walls:  Painted, no water stains, a great place for current advertising and promotional posters from your suppliers.
14. Self-service area bins: Clean, neat, organized, product in the proper bins, signs to help new customers find what they need quickly.  
15. Warehouse: Ideally, off limits to customers or at least moving toward that.  Remember, allowing customers into your warehouse is like a bank allowing unescorted customers into the vault with dollar bills laying around on shelves.
16. Safety: Are there tripping/slipping hazards? Is material properly stowed?
17. Material: Put away promptly so it can be sold and picked efficiently.  The inventory experts seem to recommend putting away today what arrives today as the mantra.
18. Yard: Fences in good order, gates and locks operational, lighting in proper order, security cameras operating, junk-yard dog hungry (kidding), free of hazards.  Most yards that we have walked are rife with safety issues ranging from tripping hazards to racks that might collapse at any moment.
19. Trucks: Clean, good signage including emergency numbers and website address, maintenance current, especially safety-related issues.
20. Other company vehicles: We feel that company vehicles ought to have signage to build the brand with few exceptions.  Any sales person who doesn’t want to promote the brand day and night doesn’t understand.

It’s a new year. You can take the opportunity to up your game by reconnecting with your team in a substantive way and by taking a tour of your stores but with a new, more critical set of eyes.  Best wishes for a prosperous 2017.