From time to time, floor covering retailers reach out to me for guidance. Not because I have experience as a retailer, but because I have had conversations with hundreds of dealers over the years about everything from issues they are having with customers, vendors or employees to what restaurants to visit in a particular city.
I recently was approached by a friend about a problem he was having and I thought it would be a good idea to discuss it here because I think it can serve as a reminder. And just like the opening narration of the radio and television series “Dragnet,” the names have been changed to protect the innocent.
So my friend—let’s call him Hugh Drashman for the sake of this article—is a successful owner/operator of a company called Northbreeze Carpet and Floors. He isn’t the biggest and he isn’t the smallest. He’s been around for a while and knows the ins and outs of the business. He pretty much handles every function of the business himself—sales, marketing, purchasing, operations, etc. He’s been able to grow with a relatively small team.
But as his business grew, Hugh decided he needed some help. He wanted to concentrate on growing the business. Maybe get into some new categories and segments. So Hugh brought in someone from the outside, someone who came well recommended, someone with solid experience. Let’s call him Fred Paulson. Two of the functions with which he tasked Fred was advertising and dealing with vendors/suppliers.
One thing about Hugh—he is very personable and has excellent relationships with his vendors. They were win-wins. They both recognized they had a vested interest in each other’s business. Sometimes Hugh was able to secure a pricing advantage or an exclusive; sometimes Hugh would take on a line if he knew it was important to a particular supplier.
But a funny thing happened on the way to the forum. Fred Paulson came to Northbreeze with existing relationships—friendships with vendors who may not have had as strong a presence in Hugh’s store. Fred saw this as an opportunity to take care of his friends. It didn’t matter to Fred that Hugh already had mutually beneficial relationships. It didn’t matter to Fred that existing vendors may have provided more value. So Fred started diverting business to the companies with which he had relationships, often competitors of Northbreeze’s key suppliers. Needless to say, this could have been detrimental to the business and put a strain on existing relationships.
By the way, just as an aside, the exact same situation happened to another friend of mine about 15 years ago. A new general manager was dating a rep and all of a sudden a rack would show up in every one of the stores. (And by rack I mean display.)
When Hugh learned what was happening, he gave me a call. He didn’t want to micromanage his new No. 2, but at the same time he was not only concerned about the company’s relationships, but whether he picked the right person for the job. He asked if I thought he made a mistake.
So in a nutshell, here is what Hugh and I discussed, which is what I would say to anyone reading this column:
- As your business grows, there are reasons to hire a strong No. 2. For example, you may find that you or your higher-paid employees are spending a lot of time on tasks that can be handed off to someone else. Also, there is nothing wrong with paying more attention to that proverbial work/life balance.
- Anyone you hire is a window pane to you and your company. That includes salespeople and executives. They represent you and your values. So do your due diligence.
- When you hire an external company or individual to handle certain tasks or functions, make sure that person not only has the necessary skills, experience and reliability to deliver the quality of work you need, but also make sure you and this individual are aligned on direction. If you are not, it could potentially damage your reputation or relationships.
- Make sure there is clear communication. Fred Paulson may not have been provided with comprehensive onboarding—in other words, he may not have been aware of the company’s culture, policies, existing relationships, etc. All things being equal, Fred was going to favor his people.
The post Retail advice from the outside looking in appeared first on Floor Covering News.