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Summer 2004 Time to Hire a Store Manager?

Running your cart or shop yourself can be fun. Chatting with customers, designing displays, dreaming up promotions, unpacking new inventory, making sales. What a great way to make a living!

Sooner or later, if all goes as planned, your retail business will grow to the point where you’re stretched too thin… when there aren’t enough hours in the day to get everything done… and you find yourself wondering, “Should I hire someone to run this place?” If so, you’ve reached a common turning point for retail entrepreneurs.

The time has come

“It’s time to hire your first store manager when your schedule gets out of hand and things begin to fall through the cracks,” says Fred Martels, president of People Solution Strategies.

The symptoms of overwork are many: Maybe you delay returning phone calls. Or you make promises to customers you find you can’t keep. Or you postpone important tasks or projects. Things—and pressure—pile up. And not just for you. Your staff’s stress and discontent grow, employee turnover rises, and sales drop off. If this sounds like you, the time to hire a manager may be now.

“In many cases, the owner becomes a bottleneck holding back the business,” says Ian Jacobsen, president of Jacobsen Consulting Group. “That’s a key time to think of hiring a store manager.” But there are other reasons, too. Maybe you want to expand the business to other locations or in other directions, and you need to take the helm there instead. Or maybe you’re getting bored with the routine and need to stretch your own career by assuming a more aggressive marketing role.

The fact is, it can be smart business to transfer management duties to someone else. Hiring a manager can give your retail business a shot of juice as well as free up your own time to pursue new growth opportunities.

Have a plan

How you go about it? What do you look for? Where do you find the right person? And how can you know? Here’s a four-step plan that will get you there:

The job
What will your manager be doing? “Typically, the store manager handles operational duties,” says Jacobsen. That generally involves staff management—hiring and training, scheduling, motivating, and evaluating… managing inventory… creating or supervising merchandise displays… maintenance and “housekeeping”… and, of course, customer service and sales. Other possible areas of responsibility: buying, advertising and promotions, and computer operations.

These duties are common to many store managers, but not all. Actually, it’s a mistake to define a manager’s job without considering the needs of your individual business. A manager at one store may have a set of tasks that are quite different from that of another. So how do you decide what tasks your own store manager should do? Mel Kleiman, managing partner of the hiring consulting firm Higher Tough Group, suggests that before you hire that person, ask yourself, “What do I do best?” Maybe you’re best at designing displays, or selling. Whatever it is, that’s the job you yourself should be spending most of your time on. “The key is to build on your strengths and not on your weaknesses,” he says.

Kleiman also suggests reviewing your current retail practices. “Look at every job your employees are now doing and ask why you’re doing it that way.” Then ask these two questions: Can we do this job differently? And can we do it with fewer people?

But be sure not to overlook a critical point: The most successful store managers go beyond just performing job duties and move into the realm of leadership. “Your store manager must be a motivator,” says Martels—someone who can influence your staff positively, resolve conflicts, and be a good coach. “You want the manager to develop your employees so that they’re even more valuable in the future. That’s what a great store manager should be doing.”This process will help you define what it is you expect your store manager to do.

The money
Good work deserves financial reward. How will your store manager be paid? Should you pay a flat salary, or spice things up with an incentive as well?

“There should be an incentive plan,” says Martels. “And it should have some objectivity to it—that is, some mechanism for measuring goals.” Easier said than done? Martels suggests using the “SMART goals” approach as the basis for incentive pay: goals should be specific, measurable, attainable, realistic and timely. Here’s a simple example of a SMART goal: “Increase sales by five percent next month.”

Of course, you’d need to develop a more sophisticated incentive plan that measures and rewards the right things. Many business owners track only sales per person per hour, says Martels. “But you need to expand beyond that” to include elements like measuring customer satisfaction and a reduction in staff turnover.

Many experts caution against using an incentive formula that’s so simplistic it could actually hurt your business. “I advise against a percentage-of-profit formula because it can foster behavior that’s not in the best interest of the business,” says Jacobsen. “You don’t want to reward someone for short-term efforts to make profit look good at the expense of the long-term health of the business.”

Jacobsen advises taking into account the key factors a store manager has some control over; set goals for them; and base incentives on reaching those goals. The level of profit, of course, should be one of those factors.

Whether you offer an incentive at all will depend on the values or “culture” of your business, says Kleiman. If you’re less aggressive and you want to emphasize how your people all work together, then you may want to establish a pay-plus-year-end or season-end bonus based on what you want to accomplish. “If you’re looking for someone to really drive sales and make things happen… then an incentive system is the best way to compensate those types,” he says. One major benefit of bonuses: they don’t ratchet up the pay levels, he says.

The search
If you’ve done your homework, you have a “shopping list” of critical skills and abilities you want in your store manager. Use that list to design interview questions that will determine each job candidate’s suitability, says Jacobsen.

Where to find candidates? Start with people you already know. Always consider the people who work for you now, says Jacobsen. “They should already have a good knowledge of your merchandise, customers and operations. They should be higher on the learning curve.” But be careful not to pick someone just because he or she is your best sales person. “What makes a good salesperson is different from what makes a good team leader,” he says. “You don’t want to lose your best salesperson and gain a mediocre store manager”—the classic “Peter Principle” mistake.

Another benefit to hiring from within: It’s great for morale. People want to know there are career opportunities for them at your store, says Martels. So it’s a good idea to have a solid career-development plan—even a brief description will do, “as long as people know what they have to do to be promoted around here.”

On the downside, your staffers may not have the needed skills. Is the employee you’re considering trained to do managerial tasks? “If not, are you going to train them? And do you have the time and expertise to train them? If not, you better go outside to hire,” Kleiman says.

If you do need to hire your manager from outside, be sure to tell everyone exactly why. And when you make your choice, explain why you chose that person and emphasize his or her skills. And be upbeat—you want your staff to feel good about this.

When you do an outside search, Kleiman suggests stretching beyond the usual boundaries. Go to businesses you like “and look for managers who are actually working.” Or you may have customers who have great managerial skills. Or you may find someone in places you don’t normally think of as needing a manager. “Look for alternative experience that may give you a manager at a price you can afford, where you could not get one otherwise. Maybe someone ran the PTA for a couple of years—that’s great managerial experience,” he says.

The transition
Hiring a store manager means more than just shaking hands and handing over the keys. You have to be sensitive to the feelings of everyone who works for you. One big challenge: your staff may feel it’s a threat to their jobs. “Communication skills are really important here,” says Martels. “Engage your employees so they ‘own’ the hiring process and are excited about the change, instead of being fearful of it.” Get their input every step of the way. Explain what the manager will do and how it will benefit everyone, and keep getting feedback from everyone, and address their concerns as they arise.

Also consider the new manager’s transition needs. If he or she came from within, a mindset shift is in order. “Newly promoted people sometimes have trouble moving out of their old role into a new one,” says Jacobsen: what makes someone a successful team member is usually different from what makes him an effective leader. So set up a master schedule for the new manager as a map of the transition process. As the manager masters each step, you can hand over more authority. “Also communicate the criteria by which you will measure and evaluate performance,” he says. “It’s critical to the new person’s success to know what measures are important to you and what you will use.”

Finally, adjust your own mindset. “It can be difficult to step back and get out of the way,” says Jacobsen.

Select someone you can trust to do the right things at the right times and for the right reasons; then give that person the latitude to do the job, he says. That doesn’t mean turning your back: it means giving the person the training—and the room—to grow into the job and do it well. Once the person has earned your confidence, he says, give that person the authority to do the job.

Hire smart

If there is one common theme to all of this advice, it’s this: Take your time, know what you need, and hire smart. “Every person in your [business] is important, but the store manager is even more so,” says Kleiman, because “the manager you hire today will determine the retail business you will be tomorrow.”

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