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Enlightened Management for Retailers

The small shop my husband Dean and I own in Madison, Wisconsin is similar to many other gift and kitchenware stores across the country – aside from the fact that Orange Tree Imports has been around for 43 years. That’s over 300 dog years, or whatever the retail equivalent might be, so we’re rather proud of our longevity. But it is our unusual alternative form of management that sets us apart from most retailers, and sharing this approach to running a small business is one of the main reasons that I wrote the first edition of Specialty Shop Retailing: How You Can Succeed in Today’s Market back when the store was only 20 years old.  It’s a great joy to me that the book, which recently came out in a 4th edition, continues to find an attentive audience around the world.

It’s even been translated  into Russian, which is a bit of a surprise considering that one of the main tenents is how to run a store using participative democracy, a form of business management based on the concept that employees should have a voice in all aspects of running the business. This means that everyone on our sales staff , and even our two bookkeepers, are in charge of doing the restocking and displays of specific departments of the store. Our employees are privy to all our financial data and give input on major decisions, from hiring to visual merchandising and remodeling. Dean and I do own the store, so we are not a true cooperative, but we try to function as democratically as possible.

Delegating Effectively

In order to make management by participation effective, we realize we must share some real power with our employees, even though final decisions do rest with us. “Giving away responsibility and authority is the ultimate expression of leadership,” according to Jammie Baugh, author of The Nordstrom Way (New York: John Wiley & Sons, 2012). It may be particularly difficult for you to learn to delegate responsibility, especially if you are used to doing everything yourself. An employee will rarely perform a task exactly the way you would have, but in order to be an effective leader, you must learn to give employees the authority to own the jobs they are doing. Changing a display or second-guessing a customer refund decision undermines staff members' confidence. There is a fine line between wanting the very best in window displays, customer service, restocking, and product selection—for the sake of the store and its customers—and wanting to let employees set their own standards for their job performance.

The day may come when you begin to delegate buying responsibility beyond just the placing of routine reorders. Staff buyers need to understand the focus of the shop and the criteria you use to evaluate merchandise so that the store will retain your personal touch. It is helpful to review all orders initially, especially if you do not provide a buying budget. Don't expect every item on every order to sell well. All buyers, even you, make some mistakes.

Being able to delegate effectively is an enormous advantage. The skills and ideas that our 25 employees bring to Orange Tree Imports allow us to do much more than we could if Dean and I were trying to run the store alone. The variety of ages and interests of our staff members reflects the diversity of our customer base, and their varied opinions help us keep in touch with different perspectives. And because we encourage them to take on as much responsibility as possible, our employees’ many talents are reflected in creative touches throughout the store.

Leading the Team

Even with everyone sharing responsibility, there is still an important role for the store’s manager or owner. Many shopkeepers are uncomfortable taking on the role of boss, especially if they’ve had a bad experience in a previous job. But managing a retail store is an opportunity to show just how effective a leader you can be: educating, motivating, and rewarding your employees. Keep in mind that a good boss does all of the following:

  • Treats employees as individuals, caring about their success
  • Routinely spends time on the sales floor
  • Is always available to employees when they need guidance, support, or just someone to talk to
  • Welcomes the input of all staff members
  • Praises the contributions, large and small, that each employee makes to the store's success
  • Is as generous as possible in rewarding employees for their efforts

Even a good boss cannot always please everyone, but as a leader you need to make sure all employees can count on being treated fairly and with respect.

If you have never managed employees before, read some of the many books available on personnel policies and business management. Enlightened management techniques can have an enormous impact on your employees' level of job satisfaction, and you will find that a happy and enthusiastic workforce is essential for providing good customer service.

Hiring by Consensus

Finding and keeping good employees is a challenge for most shops today, and having our staff involved in hiring and training is undoubtedly one reason for our store’s relatively low turnover. One of the most important elements in the success of this approach is the entire staff's involvement in the interviewing process. We have used this technique for many years, so almost all of our current employees have been hired by their colleagues.

A preliminary interview of all the most likely candidates is usually done by the personnel manager, myself, and sometimes an assistant manager. The questions we ask during this 10 minute interview are similar to those that are on our application form, plus some open-ended queries such as, "Tell us about an achievement you are particularly proud of," and "Give us an example of how you handled a difficult situation in one of your previous jobs." The applicant is given a chance to talk informally and to ask us questions about the job. The key to good interviewing is to put the candidate at ease and allow him or her to talk as much as possible.

The three or four candidates selected for second interviews after this first round of screening are asked to come before the store opens for a staff interview. As many as 15 of our current employees usually attend these informal interviews. We sit in a circle and meet with one candidate at a time, asking the applicant to tell us a bit about him- or herself. The staff is free to ask anything they want, except of course about topics prohibited by law. (We make a point of briefing them in advance about what needs to be avoided.) Questions sometimes range from "Do you have any pets?" to "Do you like to cook?" In the interest of fairness, we try to ask every candidate a few of the same questions.

One employee usually tells the candidate a bit about what it’s like to work at Orange Tree Imports and describes what the job entails. After the last candidate has left, the staff discusses the notes they have taken and then votes by secret ballot (if it looks like it will be a close vote) or a show of hands.

Some candidates find it very intimidating to face this large group, and we take their nervousness into account when evaluating their interview performance. We look for indications that the candidate really wants to work at our store, as evidenced by a positive attitude and by good grooming for the interview. The stress of the staff interview is not unlike facing a number of customers all wanting immediate attention, so the process helps us see if the candidate is comfortable talking with strangers.

The staff has a vested interest in the success of the new coworkers they have selected. The new employees come on the job having already met a number of the staff members and with the knowledge that their coworkers want them to be there. Of course, as with any other democratic voting process, candidates are sometimes selected by a narrow margin, but most staff members are comfortable with the concept of the majority vote ruling. I can think of one instance, however, when some members of the staff were so vehemently opposed to the final candidate for personnel manager that we started the process over again.  (Yes, even the personnel manager is hired by staff interview.)

We check references after the selection process is completed, and offer the job to the chosen candidate as soon as we are able to get in touch with their references. Those not selected are given the courtesy of an email, and often their applications are kept on file for future consideration.

Facing Challenges

The main difficulty facing an employer using the participative democracy style of management is keeping confidences. When openness is the norm, it is painful not to be able to explain to other staff members that one of their colleagues is feeling particularly emotional because of a personal problem or to know that someone is leaving soon without being able to mention it. But part of employer-employee trust is promising that when something is said in confidence, it will not be repeated. Thankfully, no one has ever asked that my husband Dean and I not talk to each other about staff concerns, so we always have someone to discuss an issue with without violating confidentiality.

Employee records are of course kept in a locked cabinet that can be accessed only by those entrusted with a key. An employee has the right to see everything in his or her own file at any time, but there is no reason for employees to see each other's records.

Although we also ask employees to keep the store's financial information confidential, we are realistic enough to realize that everyone talks about their work at home. We have never had anything that we were trying to hide from the outside world, so fortunately it has not been detrimental to have our store's operations be somewhat publicly known.  In fact, we usually find that when our employees talk about their work, it is with a sense of pride and satisfaction – which is one of the positive results of the democratic management approach.

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ABOUT
Carol Schroeder

Carol Schroeder and her husband Dean have been co-owners of Orange Tree Imports in Madison, WI since 1975. The Shop was recently chosen as one of four finalists for Retailer of the Century in a national competition. In addition to running the store, Carol writes extensively on all aspects of bricks and mortar retail. A newly updated and expanded edition of Specialty Shop Retailing: How You Can Succeed in Today's Market, her best-selling handbook for independent shopkeepers, was published in 2018. It is available wherever books are sold, including the website of her weekly blog for independent retailers: https://specialtyshopretailing.com/