Tough Love

Experts assert honesty, communication and teamwork are keys to getting employees through thorny economic times.


Pet retailers facing the prospect of making painful decisions about how to keep their businesses afloat while the economy struggles to recover should get creative, manage by the numbers and be as honest as possible with employees, according to business and personnel experts.

The media has been bursting at the seams with news about bankruptcies, layoffs, loss of benefits and other all-too-real evidence of the destructive nature of the recession. The news has left employers and employees alike on edge and worried about their own futures. Perhaps it’s not an easy time to keep employees motivated or to inspire optimum productivity; but some say it’s actually the perfect time to foster a deeper sense of team spirit amongst a pet retailer’s staff.

The key is in getting employees to invest themselves in the success of the store. Once they understand that it is largely a friendly and helpful staff that drives customer traffic through the front door– leading to a healthy bottom line for the business and a secure working situation for staff members–they will be much more receptive to making ongoing improvements to their knowledgebase and customer service skills.

For those retailers who do find themselves in the position of having to let people go, cut their hours or make other unpleasant decisions, an honest, straight-forward approach can take some of the sting out of the process and lay a foundation for brighter days ahead.

“It has been drilled into everyone–companies and employees–that we should be afraid, but people know that employability is not guaranteed for life,” says Joseph Michelli, Ph.D., speaker, business consultant and author of The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary. “Great business leaders realize this is a time for us to pull together as a team.”

Communication is Key
Apparently, neither love nor money makes the world go around in times like these; communication does. Step one, no matter what the circumstances are for a retailer–whether it’s facing imminent staff cuts, has made cuts already or not–is making sure all possible lines of communication are open.

“Communication is key,” says management consultant, Lesley Perkins, Ph.D. “Frequency is important– communicating frequently and as honestly as possible, and not over-promising things that can’t be delivered.”

Paul D’Souza, a sales and business consultant and thought leader, likens the ideal relationship between employer and employee to a good marriage, based on open and frequent communication.

“Make sure you are having a dialogue with employees about the business, the marketplace and the consumer, and get them to understand that you know what is going on,” D’Souza says. “It’s a culture of communication that is a two-way street.”

As many retail operations continue to feel the shockwave effects of the fallen economy, however, they are challenged with the conundrum of how to survive until the economy is back on its feet. The place to start, according to D’Souza, is by taking a hard look at “the numbers.” Retailers should accurately assess where their business stands and be prepared to make adjustments if they find the business is no longer solvent.

“Manage by the numbers,” he says. “As wonderful as it is to bring out the best in your people and nurture your employees, if the business is not financially viable, then you don’t have a business.”

Pet retail operators can review recent traffic numbers, for example. “Then calculate, ‘Have I dropped my infrastructure in proportion to the drop in traffic?’” he says. “If you haven’t, you are subsidizing your business with past profits. You’re eating away at your past profits.”

Figuring out where to go from there may take some serious consideration. D’Souza and Michelli suggest first looking to the store staff for creative ways to cut costs. Employees may be able to identify places where the store can shave off some expenses or may have ideas how to drive traffic. If the losses are still manageable enough, small steps in the right direction might be all that’s needed to turn things around.

An aggressive marketing strategy that draws on the talents of a retailer’s sales team may also prove golden for a store that is tipping the scales just ever so slightly into the red.

Facing Layoffs
Sometimes, nothing short of making layoffs or cutting hours will balance the numbers and, at this point, decision-makers will want to proceed with a good measure of caution.

“What we’ve learned from the recessions of the 1980s and ‘90s is that the way the layoff is done is very important,” says Perkins, whose expertise falls in areas like personnel assessment and management, and has worked for Booz Allen Hamilton and IBM.

The numbers, of course– payroll, benefits and other expenses versus how much the store is actually generating–tell much of the story, and are a starting point for the retailer looking to get back in the black. But the next factor that most savvy retailers consider is which of the store’s employees are absolutely vital to the business and who can be let go without detriment to the company’s operation. Business leaders must identify who has the skill sets their businesses can’t live without.

“Pet stores specializing in a particular animal or animals, for example, may have an employee with an in-depth understanding of those animals, and that person is the highest paid. Sometimes companies lay off people who have the highest salaries,” Perkins points out. “But what happens when the rest of your staff cannot fill that person’s shoes; that may not be the person you want to cut. 

“You have to look at what really is essential to running the business and getting the business through a rough period of time.”

Making the decision to right-size a pet retail operation can be an emotional one for the storeowner, particularly for retailers who have worked closely with small staffs for a long time. It’s an understandable reaction, but experts warn that emotions can cloud one’s judgment and obscure the task at hand. Storeowners and managers want to avoid making decisions based on emotion and do what makes most sense for the health of the business, keeping in mind that the most appropriate action to take may not be easiest.

“The first thing I would do is watch, control and prepare for my emotions,” D’Souza advises retailers facing this scenario.

Experts agree that the key to the transition will be communication.

“I know the people may be like family, but the only way to keep your integrity is to be able to look someone in the eye and explain that the revenue is not there,” D’Souza says.

Perkins adds that while larger companies may have staff already on board who are equipped to handle the interpersonal side of making layoffs, some smaller, independent retailers may opt to retain a consultant, if only for a few hours, to help with the process. Many more, however, will have to tackle it on their own.

“Frankly, any leader of a small or large organization should be equipping themselves to handle these tough discussions as part of their repertoire,” she says, adding that store managers also need to be prepared to discuss these matters with employees.

Being honest and focusing on the business realities may help everyone involved from stewing in emotion. “The safest way to approach this, from a business standpoint, is to be honest with the numbers; the numbers don’t lie,” D’Souza says.

Next, retailers can communicate the numbers to the staff, thus helping them understand the decisions they’ve made. Transparency, to the greatest degree possible, can help ease tensions. “Talk with people,” he adds. “Tell them, ‘this is where the market is,’ and reemphasize the numbers so that it’s not personal.”

Subscribing to the oft-proven notion that the truth surfaces in the end, the consultants agree that lying or trying to minimize the truth can be hurtful in more ways than one. Retailers would be hard pressed to find an employee who is unaware of the recession and its impact on just about everything and everyone. Therefore, the truth may be easier to swallow than some employers may think. “People get it, they really do,” Michelli says.

Easing Staff Tensions
It is also important to maintain a clear line of communication with employees who are staying on. Retailers that surprise staff with unexpected and drastic action may find themselves with a remaining crew of distrustful, edgy employees who fear the worst every day they show up for work.

“I would strongly recommend avoiding laying off people in rounds,” Perkins notes. “What you want to do is shock the system and then let it settle. When you constantly do it in rounds, things never settle.”

Also, experts advise employers not to be afraid to let others know how they feel or to allow employees to share what they are feeling. “Admit that this is really painful, and own up to it,” Michelli advises. “Don’t deny it. Let people know that this is one of the hardest decisions you’ve had to make in business. Then, let people share how they feel about it.”

A venting session may be helpful, a way to clear the air and create an environment of community and honesty among the remaining staff. “But after the sharing and expression of feelings, then we have to get back to business,” Michelli says. “What keeps us going is the ability to do productive work-admitting the painful truth and then calling people to their higher selves.”

Once the painful decisions are made and executed, the time has come to move on and, whether having faced a round of layoffs or not, retailers often find that the business thrives–or at least survives–when the staff is cohesive and working together.

“Companies can offer as much security as can be mustered, but leaders need to tell an honest lullaby and say to their employees that the way we survive this is together, and   then deliver service that differentiates them from the competition,” Michelli says.

He adds that it doesn’t cost a thing to find ways to motivate and praise worthy employees. He says that making employees feel like they’re part of your overall mission as a retailer is a great motivator and notes that people tend to develop a sense of pride when they work for a company they respect.

“Create a environment where everyone is supporting one another, and create opportunities to learn and grow,” Michelli says. “It’s nothing that costs money, but it increases the level of engagement of your internal customer–the employee–and that drives customer loyalty, which is more important than it’s ever been.”

D’Souza concurs that the best way for any business to move forward is to do so as a team.

“When employees are engaged and enrolled, and when you empower your employees with innovation and practical leadership, guess what? The business wins because everyone is in it together.”

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