Comments that we frequently hear when talking to industry contacts:

‘The Marketing team is a roadblock. They don’t get in store. They don’t understand what the Retailer wants, trading terms and the implications or how a store operates”

‘We have developed the product now it’s over to you guys to sell it!’

‘The Sales team only care about achieving short-term sales targets. They don’t get the bigger brand and product positioning story, or the personality of our brand.’

‘This is the first joint planning meeting we have had with Marketing in over 2 years’

And Category and Field teams don’t feel like they are understood by either as they are usually the ones at the bottom of the pile. The old saying that cr*p flows down hill could never ring louder in many companies (go on, have a look in the mirror and deny it!). The ability or inability to execute at store level can be severely hampered by poor planning, communication and inexperienced expectation.

But the biggest issue whilst all of this internal squabbling is going on is:

“who is looking after the Shopper?”

The Shopper is the person who actually makes the BUYING decision at shelf and is the last person we have an opportunity to “talk to” before an item is put into a basket – hopefully our item!

The Shopper may not necessarily be the Consumer – think pet food, kids cereal, fem hygiene, men’s deodorant, hot and cold beverages, vitamins and supplements….and the list goes on.

So how is this really important person usually recognized in our internal structures, processes, procedures and most importantly accountabilities?

Marketing is usually focused on Consumer, Sales on the Customer/ Retailer. The traditional Trade Marketing role is intended to own the Shopper, but is usually the buck-stops-here point of contact for all sorts of other loosely aligned reporting and tactical initiatives that leaves little time to think strategically about our Shopper response

There might be an embryonic ‘Shopper Insights’ department headed up by a person who has had to shift from Consumer insights, Brand Marketing or even Sales to Shopper insights with no additional training by the company. But there is nobody to actually direct Shopper strategy or implement Shopper-focused initiatives, apart from what is contained in BLADS or Trade presenters, and they usually focus on sell ins or on stand placement.

So what to do?

1.    Consider Structure Optimisation

It could be that your traditional teams and their reporting structures are no longer effective for your changing needs, or those of your Retail Customer or of your Shoppers.

For example, some leading FMCGs have created a department that is ‘Shopper’. It is on the same structural and reporting level as Marketing and Sales, reporting in to the GM or MD.

Another example is to implement Category teams populated by the relevant Marketing, Shopper and Sales team members.

These examples achieve three things:

a) Ensure that Shoppers as well as Consumers are considered in the strategic decision-making process

b) Create a bridge between Marketing and Sales (including Field teams), thereby improving alignment

c) Ensures a clear focus on the in-store element of the path to purchase.

These are a couple of examples of how to restructure to refocus – not for the sake of it but to change your business approach to include the Shopper in all strategic decisions.

The most important factor is the true function each team is currently performing, whether it is the optimum function for the business, and what, at a higher level, actually needs to be achieved and therefore how the business should be structured to support that objective.

A few things to consider when looking at optimizing your Structure:

1. How/ where is your current business structured to include the Shopper? Who currently owns it? Has it settled into a dept where it is treated irrelevantly, and will therefore never get the clean air that the Shopper deserves?
2. Look to the future, how do you want to treat the Shopper moving forward? You could argue that a purely PL manufacturer should be more focused on Consumer trends for example and therefore does not require a separate Shopper function. But rather than ignore it, the question I would ask is “how much do I really need to understand about Shopper behaviour to have the best chance of shelf sales acceleration?” even if I do not own the Brand (but remembering that I live and die by the sales volume!)
3. Assess the overall internal alignment of the different silos – who does what by when etc., as process and role creep occurs in any business, the larger it is the more prevalent it is.
4. Compare Roles across the business to identify insight gaps. What do I spend my money on? Where and how is it used? What questions are my Retail Customers asking me that I cannot answer? What are they asking that they cannot answer?

2.    Skills Assessment

Have you changed people’s roles, titles and expectations without giving full consideration to their skill sets?

This can become a major source of stress to both company and team members.

For example, the bevy of new ‘Shopper Insights’ roles that have miraculously appeared without adequate training provided to support the new roles. And the growth of Trade Marketing into increasingly complex analysis and forecasting, again without adequate upskilling or needs analysis.

And one of the biggest issues: Marketing people are expected to know all about Shopper when it currently is not even on the radar of most traditional marketing schools and training grounds, leaving a big knowledge gap that can be behind the ‘roadblocks’ the Sales department complain about.

Further, where does this ‘new budget’ come from for all of this ‘new’ Shopper work? Usually from existing Marketing budgets – and how is that usually received, I’ll give you three guesses. New initiatives need to be funded from across the business, as with any new strategic venture, and some areas may make a larger contribution than others but that should be based on something more than a subjective view of where the $$$ are taken from.

When reviewing internal alignment, it helps to conduct a thorough, supportive (non- threatening) skills assessment of the relevant staff.

Things to consider when undertaking skills assessments:

1. What are the current outputs and deliverables by silo?
2. What are the duplications and unnecessary outputs?
3. Where to reallocate responsibilities if necessary?
4. How do I identify best practice for my business? This will depend also on how ‘best practice’ I want to be.

One MD I worked with had the view that each year you ‘removed’ half of the internal comms that rattled around the office, purely to focus on what we needed vs what we wanted (and it does save costs)

3.    Training

Roadblocks to internal alignment and getting things done amongst multiple silo functions are often about people feeling threatened. Because they’re supposed to know something they don’t (because nobody has told them or trained them in it!), so they stick to what they know in order to feel comfortable and appear competent.

This ultimately holds the company back.

Tailored approaches are needed for each team, and the personalities within the team, to harness the potential for alignment.

Things to consider when conducting team training:

1. Clearly assess current Company and individual skill capabilities and competencies – where are my gaps?
2. Use a template or roadmap for training that ensures a consistent flow and sequence of subject matter
3. Match the required skills to the Role, Job Description and review process.
4. Train the knowledge and skill gaps, rather than everything

4.    Culture

Culture, for the purpose of this article, can be defined as ‘how the members of a company experience it’.

Often, in FMCGs with alignment issues, that experience can be fraught with turf wars, impenetrable alliances and the careful navigation of internal politics before any single initiative gets off the ground. If the coffee machine had ears!

That internal friction and disgareement, in turn, results in all those good ideas and strategies sitting on a shelf or being dumped in the ‘too hard’ basket.

Some things to consider to improve your alignment through culture:

1. Co-locate functions that need to work better together.

The classic example is Sales and Marketing. As exampled above, some of the better integrated companies have put Sales, Marketing and Category all on the one floor in an open space. They have to talk and understand the issues other roles must contend with!

2. Musical chairs

It’s an oldie but a goodie: ask people to step into others’ roles for a day (‘walk a mile in the other man’s shoes’) to gain better understanding. A really important one is to get the Marketing people out in field. Get them to see how their brands are brought to life (or not) in the instore environment, and how their brands are being sold by the sales team to retail customers. If Marketing staff aren’t out in field at least once a month, they risk being ivory tower theorists.

Ensure that Marketing co-present that all-important new line to the Retail Customer, not just to get feedback on their creation, but also to start to understand what, when and if their earth-shattering new line will actually get the acceptance and subsequent shelf space that was expected.

If not, what went wrong?

If accepted, how can I use those learnings to make sure the next new line I submit is just as successful?

3. Similarly, ask Sales people to deliver their thoughts on the long term brand building strategy (3–5 years). And so on. The point here is that the company has to invest in enough ‘downtime’ to allow staff to do this i.e. it needs to be seen as valuable time spent.

4. Assign an Account sales problem to another area of the business for a ‘blue sky’ solution. This forces research and understanding of the other functions’ issues and solution frameworks, and the only place to get the answers is from the people who currently do the role. Again they have to talk and understand the issues other roles must contend with.

You may well be surprised with the result!

5. Develop cross functional teams to develop and filter ideas and initiatives. Many companies use this approach for their NPD pipeline, so why would it not work in other areas? You would need to watch that you don’t strangle progress through beurocracy but the principle is worth either discussion or a trial as the end result is clearly worth the investment

1. 5.    Category Vision

An interesting question to ask a round table of 10 of your most senior executives drawn from across your business:

“What is our Category Vision and what are the key elements I would expect to see when I am shopping in store?”

Most companies would generate certainly over 6, and up to 10 different answers to that simple question.

Why? In most instances there is not a single aligned Company approach that has been developed across the different silos, so that each is subtly and without intent, working against the other.

It is critical that your Company speaks with the one voice with your approach to in store marketing – the impacts are clearly evident to your Retail Customer and may just be the reason why your competitor is considered the thought leader and overall category driver – regardless of market share, npd, promotional spend or rolled up margin.

The fact is that better internal alignment enables a more strategic approach to developing your categories and therefore your business, less time navigating politics, better skilled staff with higher morale, all leading to increased sales due to a stronger end-to-end offer.

Most important is the single business focus that is initiated – one Company one voice.

So, time to empty the silos and critically review your structure with a clear line of sight to the future!

ShopAbility has partnered with the Bevington Group, Australia’s most experienced process and productivity improvement specialists.

Coupling the experience of ShopAbility’s senior strategy team, all of whom have decades of CEO and Board level experience in Retail and FMCG companies, with the Bevington Group’s experience in improving business operational processes, we can deliver a unique suite of services that centre on real Organisational  Insight using XeP3.

The Organisational Insight Approach using XeP3 consolidates lessons from over 400 assignments in some of Australia’s largest and best recognized companies and ShopAbility is exclusively licensing Bevington Group patented technology and expertise for use in the Retail & FMCG sector.

Here in our second of a series of six insightful and interesting articles, Roger Perry the CEO of the Bevington Group discusses the fundamental principles behind restructuring your business in a changing and improving trading environment.

The 7 Principles of a successful restructure

Even as the economic outlook appears to brighten, the fact remains that many organisations can no longer operate as they had been.  A key feature of this changing landscape is the need for organisations to restructure. As process and structure specialists, Bevington Group has observed the good, the bad, and the ugly of restructures. Based on our experiences, we have devised seven broad restructuring principles to help make any restructure a successful one. These principles are:

1. Align structure to strategy

All restructures must align to strategy.  This may seem self-evident, yet a significant number of organisations fail to do so. For example, if local conditions are a predominant factor then stress local sales and marketing functions rather than a centralised behemoth which then tries to matrix with local elements.

2. Reduce complexity

Simply put, complexity costs. Whether it is a complex organisational structure, a complex product offering, or complex transactional processes, the added cost of complexity can be a drag on performance.

To mitigate complexity, there are three considerations which help with organisational design:

1. Design structure for strategy before you design for specific personnel.  Organisational redesigns which are a compromise between strategic intent and line management preferences inevitably add complexity. So, whilst politics are unavoidable, at least start with a clean and clear design that matches to strategy.

2. Avoid making leadership roles too complex (see principle #5);

3. Minimise the use of matrices. They introduce measurement overhead and a lack of clear direction to the staff;

3. Focus on core activity

Remove noise (inefficiency in processes), and enhance core, before restructuring roles. This means that you will need to know what people are doing today by obtaining a detailed understanding of tasks by role.  This ensures that no value added activities are thrown out when removing a role.  Similarly, duplication and redundant activity can be removed at the time of the restructure.

4. Create feasible roles

Don’t overload roles – restructures generally leave an organisation with fewer people to do the same amount of work.  When restructuring to reduce headcount, make sure you understand the current workload of employees. This will help to ensure you design roles that are neither too heavily laden nor indeed too light.  Furthermore, role design must take into account realistic groupings of skills.  Packing a role with too many distinct skillsets reduces the pool of durable candidates.

5. Balance Own-Work and Supervisory load of managers

The case of leadership or “management loading” can be particularly troublesome in restructures.  Often, the inability of managers to focus on leadership tasks due to increased output requirements can create significant problems for an organisation   For example, time spent mentoring and coaching staff drops off; staff become disengaged, more issues arise due to staff errors, and managers end up spending more time resolving them.  To ensure management are appropriately loaded, it’s critical to balance three elements: 1) the number of staff directly managed or supervised; 2) staff ability to perform work without supervision; and 3) the amount of “own work” managers have to do on top of their leadership activity.

6. Implement with clarity

Often there is confusion in the first weeks and months after an initial restructure. After all, who is supposed to be responsible for what? The answer is to clarify roles and responsibilities from the beginning, identify all functions (activities, tasks, and decisions) that have to be accomplished for effective operation, clarify who should be involved, and be specific about accountability.

7. Maintain flexibility

Finally, it is important not to cut your resources too fine. If the organisational change is material you will need resource flexibility in the first few months, so even as you strive to operate more efficiently, be sure to give yourself some wriggle room in your staffing.  Flexibility applies not only to staff members, but to staff capability.  Leave yourself and your leadership team some room to respond to capability gaps in the new structure.

Common ways to do this include: a staged transition so there are fewer capability gaps to manage at a point in time, and a temporary use of contract resources until in-house staff become familiar with their roles.

ShopAbility’s Norrelle Goldring is already running the course across Asia (in fact she’s in Manila, Phillipines doing just that this week), so this is international best practice industry training.

The course is likely to run in August. with  more details available at the POPAI and ShopAbility stands at Shopper Marketing Live! on 18-20 May.

So this is just a little sneaky peek… and stay tuned for more details.

Comments that we frequently hear when talking to industry contacts:

‘The Marketing team is a roadblock. They don’t get in store. They don’t understand what the Retailer wants, trading terms and the implications or how a store operates”

‘we have developed the product now it’s over to you guys to sell it!’

‘The Sales team only care about achieving short-term sales targets. They don’t get the bigger brand and product positioning story, or the personality of our brand.’

And Category and Field teams don’t feel like they are understood by either.

And the bigger issue: who is looking after the Shopper?

The Shopper is the person who actually makes the BUYING decision at shelf and is the last person we have an opportunity to “talk to” before an item is put into a basket – hopefully our item!

The Shopper may not necessarily be the Consumer – think pet food, kids cereal, fem hygiene, men’s deodorant, hot and cold beverages, vitamins and supplements….and the list goes on.

So how is this really important person usually recognized in our internal structures, processes, procedures and most importantly accountabilities?

Marketing is usually focused on Consumer, Sales on the Customer/ Retailer. The traditional Trade Marketing role is intended to own the Shopper, but is usually the buck-stops-here point of contact for all sorts of other loosely aligned reporting and tactical initiatives that leaves little time to think strategically about our Shopper response

There might be an embryonic ‘Shopper Insights’ department (headed up by a person who has had to shift from Consumer insights or sales to Shopper insights with no additional training by the company). But nobody to actually direct Shopper strategy or implement Shopper-focused initiatives.

What to do?

1. Consider Structure Optimisation 

It could be that your traditional teams and their reporting structures are no longer effective for your changing needs.

For example, some leading FMCGs have created a department that is ‘Shopper’. It is on the same level as Marketing and Sales, reporting in to the GM or MD.

Another example is to implement Category teams populated by the relevant Marketing, Shopper and Sales team members.

These examples achieve three things:

a) Ensure that Shoppers as well as Consumers are considered in the strategic decision-making process

b) Create a bridge between Marketing and Sales, improving alignment

c) Ensures a clear focus on the in-store element of the path to purchase.

These are a couple of examples of how to restructure to refocus – not for the sake of it but to change your business approach to include the Shopper in all strategic decisions.

The most important factor is the true function each team is currently performing, whether it is the optimum function for the business, and what, at a higher level, actually needs to be achieved and therefore how the business should be structured to support that objective.

Things to consider when looking at your Structure Optimisation:

1. How/ where is your current business structured to include the Shopper?
2. Assess the overall internal alignment of the different silos
3. Compare Roles across the business to identify insight gaps.

2. Skills Assessment

Have you changed people’s roles, titles and expectations without giving full consideration to their skill sets?

This can become a major source of stress to both company and team members.

For example, the bevy of new ‘Shopper Insights’ roles that have miraculously appeared without adequate training provided to support the new roles. And the growth of Trade Marketing into increasingly complex analysis and forecasting, again without adequate upskilling.

And one of the biggest issues: Marketing people are expected to know all about Shopper when it currently is not even on the radar of most traditional marketing schools and training grounds, leaving a big knowledge gap that can be behind the ‘roadblocks’ the Sales department complain about.

When reviewing internal alignment, it helps to conduct a thorough, supportive (non- threatening) skills assessment of the relevant staff.

Things to consider when undertaking skills assessments:

1. What are the current outputs and deliverables by silo?
2. What are the duplications and unnecessary outputs?
3. Where to reallocate responsibilities if necessary?
4. How do I identify best practice for my business? This will depend also on how ‘best practice’ I want to be.

3. Training

Roadblocks to internal alignment and getting things done amongst multiple silo functions are often about people feeling threatened. Because they’re supposed to know something they don’t (because nobody has told them or trained them in it!), so they stick to what they know in order to feel comfortable and appear competent.

This ultimately holds the company back.

Tailored approaches are needed for each team, and the personalities within the team, to harness the potential for alignment.

Things to consider when conducting team training:

1. Clearly assess current Company and individual skill capabilities and competencies – where are my gaps?
2. Use a template or roadmap for training that ensures a consistent flow and sequence of subject matter
3. Match the required skills to the Role, Job Description and review process.

4. Culture

Culture, for the purpose of this article, can be defined as ‘how the members of a company experience it’.

Often, in FMCGs with alignment issues, that experience can be fraught with turf wars, impenetrable alliances and the careful navigation of internal politics before any single initiative gets off the ground.

That, in turn, results in all those good ideas and strategies sitting on a shelf or being dumped in the ‘too hard’ basket.

Some things to consider to improve your alignment through culture:

1. Co-locate functions that need to work better together.

The classic example is Sales and Marketing. As exampled above, some of the better integrated companies have put Sales, Marketing and Category all on the one floor in an open space. They have to talk and understand the issues other roles must contend with!

2. Musical chairs

It’s an oldie but a goodie: ask people to step into others’ roles for a day (‘walk a mile in the other man’s shoes’) to gain better understanding. A really important one is to get the Marketing people out in field. Get them to see how their brands are brought to life (or not) in the instore environment, and how their brands are being sold by the sales team to retail customers. If Marketing staff aren’t out in field at least once a month, they risk being ivory tower theorists.

Ensure that Marketing co-present that all-important new line to the Retail Customer, not just to get feedback on their creation, but also to start to understand what, when and if their earth-shattering new line will actually get the acceptance and subsequent shelf space that was expected.

If not, what went wrong?

If accepted, how can I use those learnings to make sure the next new line I submit is just as successful?

3. Similarly, ask Sales people to deliver their thoughts on the long term brand building strategy (3–5 years). And so on. The point here is that the company has to invest in enough ‘downtime’ to allow staff to do this i.e. it needs to be seen as valuable time spent.

4. Assign an Account sales problem to another area of the business for a ‘blue sky’ solution. This forces research and understanding of the other functions’ issues and solution frameworks, and the only place to get the answers is from the people who currently do the role. Again they have to talk and understand the issues other roles must contend with.

You may well be surprised with the result!

5. Category Vision

An interesting question to ask a round table of 10 of your senior executives drawn from across your business:

“What is our Category Vision and what are the key elements I would expect to see in store?”

Most companies would generate certainly over 6, and up to 10 different answers to that simple question.

Why? In most instances there is not a single aligned Company approach that has been developed across the different silos, so that each is subtly and without intent, working against the other.

It is critical that your Company speaks with the one voice with your approach to in store marketing – the impacts are clearly evident to your Retail Customer and may just be the reason why your competitor is considered the thought leader and overall category driver – regardless of market share, promotional spend or rolled up margin.

The fact is that better internal alignment enables a more strategic approach to developing your categories and therefore your business, less time navigating politics, better skilled staff with higher morale, all leading to increased sales due to a stronger end-to-end offer.

Most important is the single business focus that is initiated – one Company one voice.

So, time to empty the silos and critically review your structure!

ShopAbility’s Peter Huskins has a wealth of experience with structure optimisation and internal alignment. Call him to discuss your needs on 0412 574 793.

• Gain more confidence presenting & communicating
• “Fear-busting” – losing the barriers & defences that hold you back
• Interactive, exercise-based training
• Working with a video camera & playback for maximum learning
• Tailored and relevant exercises e.g. roleplays etc
• NIDA –trained tutor  with international experience and FMCG understanding

Training is designed to optimise the presentation and communication skills of your team and is highly interactive and exercise-based.

Modules are either presented as half-day sessions, or full-day workshops with two modules combined in one day.

1. Presentation Foundations
2. Creative Presentations
3. Voice & Body
4. Communication & Personal Style

Presentation Foundations is the first course preceding all other optional modules. All courses involve the use of video camera & playback and group exercises

Presentation Skills Training is generally offered in the context of broader training programs including Retailer Negotiation Skills, Category Management, Retailer Category Presentations and a wide range of customised, specific training for companies.

The training involves:

INTERACTIVE GAMES

• Fear-busting & confidence
• Communication reflexes
• Flexibility & responsiveness
• Accessing the right brain / creative side
• Using memory in presentation

TOOLS & TECHNIQUES

• Voice & speech
• Body – language & gestures, movement
• Presence
• Communication
• Confidence building
• Mental focus & fear-busting
• Tips for ongoing practice

WORK TO CAMERA

• Amplifies areas of strength and of need
• Enables participant to view themselves for maximum learning
• 360 degree feedback mechanism
• Challenging and fun group work / role plays
• Relevant presentations e.g. elevator pitch

CUSTOMISED DEVELOPMENT

• Individual participants
• Tools & tecnhiques tailored to individual needs
• Take-away materials
• Access to video footage (reference)
• Customised ongoing programs where appropriate (separate scope)

About the Trainer: Lee McAllistair

• As a NIDA –trained presenter and performer Lee has worked internationally across multiple live and recorded communication mediums including television and radio (UK and Australia) and  as a live presenter / performer in the UK, Asia and around Australia.
• In addition to her NIDA training Lee holds a Masters in Communication Management, holds more than 10 years’ senior marketing & FMCG experience and is a founding member of ShopAbility for the past four years.
• Her marketing work has won industry awards including the Australian Marketing
• Institute, Public Relations Institute of Australia and she has consulted to clients
• including Coca Cola, Sony Pictures, Blackmores, National Foods
• and Foster’s Group.
• Lee’s performing work has earned her favourable reviews in UK and
• Asian press, having performed at major events including a sold-out five week
• season at the largest Festival in the world, the Edinburgh Festival Fringe
• (generally known in the Industry as “the slaughterhouse” for how
• unforgiving it can be to performers).
• In a presentation training capacity, Lee’s focus is on pushing through
• the inevitable fears associated with presenting and communicating to
• others, using interactive exercises and the “great amplifier” of all fears:
• A video camera.

For all Training and Company Capability program enquiries please call Peter Huskins on 0412 574 793 or peter@shop-ability.com

By Peter Huskins for Retail World Magazine.

Rather than write about the theories and well trodden path of Relationships in general, I’d like to frame this article more about challenging you to identify what capabilities and competencies matter to you and your business when you are managing your Customer relationships NOW. We all know, and have been trained in our careers, about Customer management and how to influence the sale. We know we need a win/ win relationship, good networks across our Customer’s business and a reputation for trust, confidentiality and achievement.

But how do you measure how good you really are, and how good you want to be?

In our last article on Scorecarding Your Business, Norrelle mentioned the importance of key factors in building and using a Scorecard. One specific area of competence that was identified was Customer Engagement – read Relationship Management.

But what does it mean in a Scorecard context and then in an application context? Measuring and assessing performance on a Company or Individual level is one thing, but the ability to transform a relationship into a powerful partnership focussed on joint growth and profitability is quite another challenge.

Being able to adequately assess the capability of your business (and of individuals) to manage Customer Engagement, in other words Relationship Management, is a critical first step in understanding if it is a core strength that can be leveraged, or an underlying weakness that needs development. A thoughtfully developed Scorecard also allows for future re-assessment that enables progress to be measured and fine tuning to take place.

So let’s look at the basic framework around Customer Engagement and the possible criteria to look at if want to apply a specific lens to this fundamental discipline, what we call

The 5 R’s of a Relationship

Relevant – Rigorous – Respect – Resourceful – Right Time

We believe these are the key competencies and capabilities that Customer facing people need to have and use when they engage with their Customer. They also apply to functions that may not have direct day to day responsibility for Relationship Management but in many instances their decisions or actions have a direct impact on a Customer…and someone else has to sort out the mess.

The next time a Brand decision is taken in apparent isolation to the Sales function, and to the bewilderment of a Retail Customer, will not be the last! Likewise the next time a promotional price point is promoted to the bewilderment of both Sales and Marketing will not be the last! These are the day to day challenges of managing a Relationship, both external and internal.

Now let’s expand on these 5 R words, using other words that hopefully will strike a chord and assist in building your own Scorecard and identifying areas of improvement for your Customer Relationships:

1. Relevant – how appropriate and significant you and your Company are in your dealings with your Customer. Words like current knowledge (of the Category), product and competitors, store conscious, future focussed, clear and concise, objective, informative, KPI driven, cost conscious or low cost come to mind
2. Rigorous -  how thorough and accurate you are in managing your Customer’s business. Focussed, applied, consistent, curious, speedy, interested, targeted, well planned, analytical and diagnostic are good descriptors
3. Respect – is there a high mutual admiration and opinion of each other? Committed to the Retailer, single minded focus internally, your Customer’s champion, loyal, flexible,
4. Resourceful – how practical yet creative you are? Being different, exclusive, innovative, imaginative, knowledgeable, strategic, whole of business,
5. Right time – balancing a sense of urgency with timeliness and applicability

Urgent, available, timely, opportune, sensible and appropriate.

Now it should be a fairly simple exercise to identify the words you would like to use to fashion into this table featuring the 5 x R’s (or another set of key words/ titles that you would like to use to benchmark your business)

There is a level of complexity and thought that needs to be applied to develop a ‘fair’ scaling methodology to the Scorecard. By scaling, I mean what does good – better – best look like for Relationship Management? The words and phrases must describe exactly what you mean for each level of Relationship Management, and these may vary by Company based on the emphasis you place on these from a strategic sense as well as an application sense.

The best and most engaging way to do it is to develop what you believe best describes each scale for the Scorecard and then distribute the draft around to key people in the business asking for their input and amendments.

Sometimes you hear that it is an easy solution to “ask your Retail Customer” however in reality it is a lot more difficult than that. Different Buyers in different categories within the same Retail company have different hot buttons. Some KPI’s and business strategies will be the same however each Category (read Buyers) is unique. Also the ability to be able to benchmark against your peers is beneficial as strategic and tactical opportunities are frequently highlighted.

Everyone has days where everything just seems to go wrong – think about asking a Buyer to candidly rate your business the day after a particularly heavy negotiation session over Trading Terms or a competitor’s hot promotional price point, note the word ‘candidly’. Of course they will be distracted, the outcome of your business rating will be dependent on the success (or not) of the previous day.

Strategically some companies also wish to excel in some areas and not in others, much like the alternatives offered in The Discipline of Market Leaders (Treacy & Wiersema) where one of either Operational Excellence, Product Leadership or Customer Intimacy are selected as the core strategic Company capability. Your chosen discipline is the driver for your business, one that you master vs your Competitors, however the model requires at least normal/ average capability in the other two disciplines in order for the chosen model to succeed.

If you do wish to pursue the Customer Intimacy model, the key indicators are:

• Deliver to specific Customer needs, not broad market requirements
• Know the people you sell to & exactly what products & services they need
• Continually tailor products & services at reasonable prices
• Customer loyalty is a key asset; cultivate Relationships rather than pursue transactions
• Give the Customer more than they expect, constantly upgrading offerings
• Consider Customers a lifetime value, not just profit & loss on a few transactions
• Tailored mix of services or customized products; using 3rd parties to supplement internal activities
• Obsession with solution development, results management, and relationship management

The above descriptors also provide a neat alternative to use in the Customer Relationship Scorecard as well.

The overall message here is do not try to be all things to all people, select your Customer Relationship criteria and scaling methodology and  then strongly measure and apply it, as the capabilities and competencies you design for your business must become a key strength in your relationship with your Retail Customer.

Relationship management is not all one sided, although it may definitely appear to be the case sometimes. The ability to see over the seemingly large immediate issues and then be able to contextualise for the benefit of a sound on-going relationship is the key – and that works both ways!

The FMCG Sustainability Institute (FSI) is pleased to be able to offer accredited Green Skills Training to businesses who seek to increase the sustainability knowledge and skills of their people. Courses are heavily subsided by State and Federal funding – depending on circumstances by up to 90% -  and certificate of attainment is issued on satisfactory completion of the courses.  Currently FSI offer a 1 day Introduction to Sustainability in the Workplace and a 4 day Green Skills for Business Sustainability program (This course provides the knowledge and skills to develop workplace policy and procedures for sustainability and is part of the Business Sustainability- Diploma Unit).

More information on the FSI website HERE

By ShopAbility for Retail Pharmacy Magazine

Last article we talked about how you decide what things to range, taking into account your competitive strategy and shopper types, and concepts such as category weighting, segmentation, depth, and breath.

We looked at how to determine what your range should be at a total store level.

This time around let’s take this thinking one step further and look at how to make the most of your existing range within a given category, now that you’ve established what it should be.

What is Efficient Assortment?

Otherwise known as ‘Range Optimisation’ or ‘Range Rationalisation’, Efficient Assortment ‘right sizes’ your range in a given category based on the top selling products either or both of volume and value terms, and as measured against stock turn velocity and return on inventory.

Why is Efficient Assortment Important?

You might have the deepest or broadest range, or the most high margin products, but not all of it is necessarily moving or worth a lot to you.
Efficient Assortment helps you get best bang for buck from your available space for a given category, because it ensures you’re ranging the top selling and fastest moving products and minimizing space wastage on slow movers.

Which ‘level’ is Efficient Assortment performed at?

‘Efficient Assortment’ is normally performed at Category level, involving individual products and SKUs (see Fig 1). Traditionally, category segments, individual brands and unique SKUs are secondary considerations.

How it works – the 80/20 rule

You’ve heard of the 80/20 rule, otherwise known as the Pareto Principle.  Traditional Efficient Assortment uses the Pareto Principle to determine how many SKUs (individual products – stock keeping units) are worth 80% of category sales (the 80% analysis should be done for both volume and value).

Anything over the 80% line is called the ‘tail’. Anything that is in the Tail, unless it performs a unique role or is of high value, is ripe for rationalization – particularly if it duplicates the functionality of a product in the top 80%.

Below is an example Cumulative SKU graph (in both volume and value) for Category X. This kind of cumulative graph can be done very simply in an Excel spreadsheet, drawing from your sales data/point of sale system.
In Figure 2, the category is a sparse one (as opposed to dense one) because only a small number of SKUs make up the Top 80%. In this example there is a long tail.

Docking the Tail

The fastest way to shorten the tail is to ‘deduplicate’ it.

This simply means looking at the products in the tail and determining which ones have an identical function or role to their counterparts in the Top 80%.

In the Figure 2 example, though, there may not be many duplications as there are so few products making up the Top 80%.

So if they’re not duplicate products, how else can you determine what should go from the tail?

Return on Inventory

Look at what’s in the tail and what it’s worth to you – not just from a gross margin perspective on an individual item, but its stock turn rates.  You can’t bank margin – there’s no point ranging something that gives you 60% margin if you only sell one item a year unless it’s an extremely high $ value item. 60% of nothing is still nothing.

What we’re referring to here is GMROI – gross margin return on inventory. Using GMROI, a product with a lower margin but a high stock turn rate might actually be netting you more $ than a higher margin product that isn’t moving.

So in looking at the ‘tail’ in your category, have a look at the margins of the individual products versus their velocity – both hurdle rates (units per store per week) and annual stock inventory.

Products that are in the tail that are two or more of a) duplicates of something else b) low margin and c) low stock turn, should be the first cabs off the rank to be rationalized.

But make sure you don’t leave home without …

… checking what’s missing.

A traditional Efficient Assortment analysis tells you what to delete, but not what to range (which was the focus of the first article).  The 80/20 method of range rationalization looks at individual SKU contributions, but doesn’t look at coverage or unique needs.

So in doing an Efficient Assortment analysis, and looking at your Top 80%, you also need to keep in mind the following:

• Category coverage: Do my Top 80% skus cover most or all of the needs of the category?
• Segment coverage: Do my Top 80% skus represent products from each Segment of the category? Or are there products in the Tail that fulfill this function?
• Unique skus: are any of the products in the Tail a unique SKU that fulfills a special need and therefore can’t be deleted?
• New products: are any of the products in the Tail newly introduced (ie in the past 6 months)?

To mitigate the newness factor, Efficient Assortment analysis needs to be done on a quarterly or 6 monthly basis so you can track the progress of new product introductions and their potential entry into the Top 80% – ie to track trends rather than just dipstick one point in time.

So I’ve done my analysis, now what?

Once you’ve done your analysis you need to put the results into action instore. This might include:

• Out with the Old: Sell through (via special, promotion or other mechanic) or return the items in the tail that you’ve decided to rationalize (working with suppliers on how best to do this)
• Go with the Goers: Put a plan in place for how you will better support the products in the Top 80%. Decide whether you will focus on further supporting your Top 20% of skus or whether you will put focus on growing and improving the SKUs that sit between the 20% and 80% marks. This might include facing them up (giving them more facings on shelf), since you’ve now got more space to play with, or things like point of sale at the fixture and consumer promotions.

In summary: why you should look at Efficient Assortment

You might need to do an Efficient Assortment exercise on a category if you answer yes to one or more of the following:
1. You have a number of products that perform the same functions
2. You have a lot of products for a category but not enough space and you need to get rid of some
3. You don’t know which products are your top sellers and/or bottom performers
4. You are spending time and money promoting products that you suspect aren’t moving.

We’ve talked a bit here about the role of space on range. Next issue we’ll look at how to think about laying out a category and the products in it in more detail.

In the meantime, we welcome feedback on these articles – what you agree with, what you don’t – and what you’d like to hear about. Email us with feedback on enquiries@sh-opportunity.com.au

1. Avoiding duplication and inefficiency
2. Providing clarity, direction and inspiration to the existing workforce
3. Keeping the company AND the people within it developing with a view for the longer term.

Here’s some tips on how.

The Sales vs Marketing Conundrum

One of the most common things we hear is ‘Marketing don’t talk to Sales, and Sales don’t talk to Marketing’. This ‘great divide’ causes all sorts of problems.

For example, Sales is primarily concerned with the retail customer, and Marketing with the consumer / end user. So who is looking after the shopper? As we probably don’t need to state, they’re often not the same person (think pet food, children’s products, and ‘buying for others’ in general).

‘Who is looking after the shopper?’ is a great place to start when reviewing your organisational structure. Having a ‘Shopper Marketing’ function that represents the voice of the shopper makes a lot of sense. To be effective, it needs to report in at the same level as Marketing and Sales. So that you have the Retailer (Sales), the Consumer (Marketing) and the Shopper (Shopper Marketing) equally represented in decision-making. Ideally, you would co-locate all these functions so they HAVE to talk to each other, and schedule regular planning and work in progress meetings for all three teams together.

Where would Trade Marketing sit, then? Ideally it would sit under Shopper Marketing, given that Shopper behaviour insight is necessary to determine effective point of purchase solutions. It would also need close relationships with Sales for the Retailer perspective and Marketing for the brand perspective.

More and more leading organizations are restructuring to include a dedicated Shopper Marketing function so that the voice of the Shopper influences planning in the same manner as that of the Consumer and the Retailer. This kind of structure can also assist with reducing confusion and duplication among sales and marketing functions.

‘People accounting’ in the era of lean (but not mean)

The current climate is requiring many companies to review which functions, roles and people are critical, versus those who are not.

To avoid making subjective decisions about this, it is helpful to have an exceedingly clear picture of the performance criteria for each role in the organisation, and how this contributes to the whole.

Ideally, every role has more than KPIs -  a clear scorecarding system is required. Scorecards for every role enable objectivity in reviewing current performance as well as development, and provide clarity of communication and expectations. Scorecards also identify clearly where a person is not progressing along their development roadmap, and when they are going faster than the company is and therefore require more support.

Furthermore, the whole organisation needs a scorecard based on its core critical functions, with a clear indication as to where each role fits in. Developing such a scorecard can sometimes identify where duplication and inefficiency are occurring, and where roles can merge or become defunct.

Ultimately, ‘people accounting’ is as important as traditional accounting, because one directly affects the other!

Keeping morale on the up and up

It’s a well used statement that in every downturn there is opportunity for some, and the same thing applies internally to your teams.

Whilst some roles may be considered ‘surplus’, that can ultimately mean fast-track development for others.

For each person / role in whom the company decides to continue investment, a personalized roadmap for development needs to be created. Where the scorecard provides clarity about performance against expectations, the roadmap provides crystal clarity on mutually agreed development goals and how success in achieving them is measured.

A development roadmap can be a highly motivating way to push through tough times with goals in mind, seizing on the opportunities created by restructuring to create a more flexible, versatile, highly skilled team that is offered variety and ongoing development support.

There are many ways to optimize the business in a downturn, but to recap on three key measures:

1. Review your Sales and Marketing functions and consider whether the Shopper is adequately represented (because ultimately it’s the Shopper who drives topline growth!)
2. Implement a clear scorecarding system for the company as a whole and for each function, to determine what is critical versus not critical, and where inefficiencies exist
3. Ensure your people have clear, motivational development roadmaps to encourage a flexible and versatile workforce in an era where spanning across multiple roles and responsibilities may be required.

‘Development plans’, or lack of them, are one of the most often-cited reasons for good people to move on from a company and seek greener pastures. Capability and skills development are items that regularly fall to the bottom of the priority list, swamped by day-to-day concerns.

Yet good capability roadmaps deliver value for organisations as well as individuals. A highly skilled, versatile team that takes ownership of its contribution towards the profitability of the business is an asset that pays dividends to the bottom line every day.

But what does a good capability roadmap look like and how do you implement one?

Know your destination

What knowledge and skills does your team need in order to achieve maximum performance? What does an ideal capability and skills checklist look like?

Some thought starters to get you going:

• Do you need your teams to understand and apply shopper behaviour knowledge in strategy making?
• Gain a greater understanding of what makes retailers tick and how to negotiate?
• Is it best practice in-store marketing principles you need your people to apply?
• Do you need to standardise what ‘brand marketing’ actually means and ensure that your marketers know how to do it with excellence?
• Or does your focus need to be on processes and tools everyone can use for cross-functional communication and teamwork?
• Category or channel strategy know-how?
• Range, space, pricing and promotions analysis and reviews?

There are many areas for development (shameless self-plug here – Shopportunity has comprehensive capability roadmaps across the whole gamut of FMCG skill sets and departments, and also develops tailored programs from scratch. OK that’s done – ’nuff said). The challenge here is to prioritise which are the most important capabilities and skills first. Which leads to our next point.

Link your roads

Ultimately a successful capability roadmap needs a context rather than attempt to exist in isolation. It needs to be book-ended by your other programs and linked to any other training (external or internal) your people undertake.

It also needs to directly relate to performance KPIs and scorecards (or the KPIs and scorecards need to be updated to include content from the capability roadmap).

You will probably find, once you have prioritised which are the most important skills your team needs to have, that there are still a number of different areas. It may be that each of these areas needs its own roadmap, and these are all linked together in an ongoing program of learning.

Use signposts

Furthermore, within each area there are likely to be different levels – skill number 9 relies on knowledge about number 3 and so forth.

So a good roadmap will take a specific focus area and create learning for a team across a number of levels over time. For example:

1. Introductory – an orientation and context to make sure the basics are covered (it’s surprising how many times they’re not because it’s always ‘assumed’)
2. Core – the fundamental things people need to know
3. Intermediate – the capabilities and skills required to move from ‘adequate’ to ‘competent’
4. Advanced – higher level skills and thinking to move towards ‘excellence’
5. Leading Edge – ahead of the curve thinking for maximum competitive advantage

Along the way, ‘signposts’ recognise achievement and knowledge gained. Signposts for each of the five levels can help participants acknowledge their own learning process. Checklists for each level can help them to revise and ensure they know how to apply everything they’ve learned. And, back to ‘link your roads’ – this needs to be reflected in KPIs and scorecards.

Avoid dead ends and one way streets

A good capability roadmap allows for maximum interaction and engagement. It offers a high degree of clarity about ‘the way we do things’, but it is not about ‘lecturing’. In fact, people that come in to your company with knowledge and skills gained elsewhere may also have contributions to make to the roadmap itself – so it becomes a two-way continuous improvement process for the company and the individual.

A clear capability roadmap also helps you avoid getting buried down rabbit warrens with your people. When you have already agreed on your destination, what the most important ‘big ticket’ items are to achieve your business goals and how to get there (the roadmap), you won’t be tempted to waste time, money and resources on learning programs and ‘pet projects’ that don’t achieve your strategic objectives.

Focus needs to always be on what will deliver maximum impact to the business.

Know what ‘getting there’ looks like

Signposts along the way are handy, but how do you know when you’ve reached your destination? You need a picture of what your destination looks like, and a way to measure and review on an ongoing basis that you are still there.

A good capability roadmap will include ‘pictures’ of success for future reference.

For more information about ShopAbility’s capability roadmap programs, contact Peter Huskins on 0412 574 793 peter@shop-ability.com for sales training programs, or Norrelle Goldring on 0411 735 190 norrelle@shop-ability.com for shopper marketing, brand marketing and insights training programs.