First Year in Expanded Store: Homing in on Success

birdMuch has been made of the carrier pigeon’s seemingly mystical ability to find its way home while flying over great distances. But researchers at Oxford University who study the birds recently concluded that their navigational skills were really enhanced by following roadways, not the position of the sun in the sky, as was previously believed. Researcher Tim Guilford told the Daily Telegraph, “In short it looks like it is mentally easier for a bird to fly down a road…they are just making their journey as simple as possible.”

It’s hard not to feel like the birds have been cheating. But people always have to complicate things. If pigeons can readily accept that following a road will be easier, why can’t we? Perhaps it seems uninspired to stick to the course, but when it comes to reaching goals, it is most effective.

The first year after an expansion or relocation is one of the most challenging times for a food co-op. The long-term demands on time, energy and resources can scatter even the most focused individuals. That’s why expansion and relocation consultant Bill Gessner believes a well-constructed expansion plan focused on priorities will also inform the first year’s implementation.

Gessner listed those priorities in the following order: sales, margin, labor and inventory. He suggested managers tape the words to their computer or desktop, or memorize it as a mantra. “The key to first year success is really sales-driven. You have to work to get the sales so you can make a go of it. You can’t get behind from the beginning.” Getting the right presentation and level of abundance is key.

“ The stores that underperform on sales are digging a hole for themselves,” Gessner said. Thus advance planning is critical to first year success. “It’s important not to lose your primary focus.”

It’s easy to get caught up in the swirl of post expansion and easily overlook underperformance in gross margin and labor costs. “It’s important to keep things in balance,” Gessner said. “Focusing on sales is not an excuse to forget about margin, labor or inventory. It’s essential to prioritize the development of your new store.”

The pressure is really on once the doors open in an expanded store, said Denise Chevalier, expansion project management consultant. “There are greater operational challenges and a need for more sophistication.” One of the projects Chevalier worked on last fall was People’s Food Co-op in La Crosse, Wisc., an ambitious expansion that added 18,000 total square feet for retail, new second-floor offices, a deli kitchen and restaurant. She believes that People’s may experience fewer surprises in the coming year because of the planning and preparation management put into the project.

“ Staff knew how the organization would look when the expansion was over,” Chevalier said. Once the store opened, managers knew what to expect. Not that it’s ever easy, but the time they put into creating organizational readiness during the expansion process allowed them to build their internal resources. “Timing is critical,” said Chevalier. “You want to build up to it, adding staff, doing training, because post-expansion the intensity increases. Not only has the operation changed but the need to meet goals is so critical.”

Operations consultant Mel Braverman concurs. “If you don’t have good systems going in, there’s very little time in the new store to improve. Usually, you’re just trying to stay on top of things.” The systems you create ahead of an expansion need to be easily transferable to a growing organization, otherwise you may be in trouble. “It could be hellacious for you that first year,” he said.

Gessner also noted that systems preparation includes marketing from the inside out. “You want to focus on fine-tuning your presentation and service levels before advertising in a grand way. You want to be sure that the customer buzz is positive.”

All the things that need attending to cannot be the exclusive domain of one, or even a handful of managers. That’s why it’s essential to budget for added expertise through an expansion and beyond. “As a project manager I can focus on the expansion’s facility, equipment, and information technology systems. The general manager can focus on developing internal readiness. It’s a tremendous amount of work to plan and implement an expansion. It’s more than double the work,” said Chevalier. Getting outside assistance can help keep improvement at the forefront and minimize crisis management.

Braverman said that a big part of the expansion planning process includes working with department managers on their departmental plans. “Not just the labor budget, but a plan that takes into account more deliveries, more product, more staff to stock it. You need to educate staff and the management team about the activities of the expansion, and how to prepare for the future operations.” It’s also important to build on the maturity and experience of long-term managers to ease the cultural and operational shifts that happen post-expansion.

There are lots of ways to do this. Management teams can get advice and help from experts and peers, do tours of other stores, and use the range of financial and organizational resources that are out there for food cooperators.

Braverman said managers also need to have a realistic discussion with staff about aspects of the expansion that may cause stress. It’s not always a rosy picture post-expansion.

Expansion planning and execution can easily raise stress levels off the charts. So how do managers do all these things and maintain a consistent disposition? If you’re feeling the pressure it may be time for a vacation, and again, this should be something your expansion planning takes into account. Smart post-expansion managers try to take off after an expansion to recharge. “Managers need time off,” said Chevalier. “It can be hard to do and people have a tendency to be there and be there. You need to go away and relax. Don’t burn the candle at both ends.”

Don’t forget to celebrate your accomplishments either, Gessner said. “People are working really hard. Morale and inspiration are important. There needs to be praise and celebration.”

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By |March 1st, 2005|Categories: Solutions|Tags: |

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