Posts Tagged ‘wholesale’

Retail Executives: Should you accept your employer’s counter offer?

Wednesday, August 4th, 2010

 

This is a serious question that cannot be easily answered.

The first question you need to ask yourself is why did you look at this other company and why did you let it get to an offer stage if you were not serious about leaving?

Were you unhappy with your superior?

Were you underappreciated and underpaid?

Was your career path blocked?

Did you have concerns about the future of your employer?

Do you have an especially high regard for the prospective employer?

Before you accept your current employer’s counter offer, you seriously need to think about what has really changed with that counter offer that will make you happy. It may be easy to go back home and tell the family that you will not need to relocate because your employer made all kinds of promises and rewarded you with extra compensation. But, if conditions were bad enough to make you look elsewhere, there is little chance that things have changed significantly.

The truth is that most employees who accept a counter offer from their current employer usually leave the company within two years.

Why? In my experience there are several reasons.

Your current employer may never fully trust you again. Because you got to the stage of an offer, there is suspicion that you traded too much secret information.

Your employer also may believe you will leave again in the future. So, favored appointments will tend to go to those in the organization that have earned management’s trust.

If you were transferred away from a superior you did not like, that executive usually remains with the organization and will become a political opponent.

If you were disillusioned with your company’s future, the likelihood of that changing is minimal.

My advice to any executive is that you should not seriously look at other career opportunities if you fully believe your career is on track. Why jeopardize your role with your current employer and why create a reason for your employer to have less reason to trust and invest in your development?

On the other hand, if you feel that your advancement is blocked or if you have reservations about your employer’s future, you should actively look for other opportunities and be committed to the change.

Retail Executives: Now is the time for retailers to recruit Strategic Hires !

Tuesday, July 27th, 2010

The National Bureau of Economic Research (NBER) has declared that the recession is officially over. For retailers, the question is how robust will the economy be in the next couple of years. Most economists and Mr. Ben Bernanke, Chairman – Federal Reserve, are forecasting a slow recovery. Why? The economy still needs to work through consumer debt and the consumer needs to find ways to increase their income so that they can spend again. In the recent past, consumers spent wealth gained through the inflated housing market. Unemployment is still high and will take time to recover. And, the baby boom generation is moving into retirement which means that this big population bubble will be spending less.

So, why is now the best time to bring on strategic hires? First, let’s define strategic hires as executives who can do significantly more than the incumbent. More importantly, let us define a strategic hire as someone who will help change the course of your business. This will be someone who is more strategically oriented to:
• Analyze the customer base to refine the definition of the targeted customer and then develop marketing programs to communicate with the newly targeted customer to increase traffic, sales, and margins;
• Create a store environment which matches/exceeds the targeted customer’s expectations and allows you to build a brand through the retail experience;
• Seek ways to find basis point improvements in operations efficiencies while also improving customer service;
• Build a culture which meets/exceeds customer expectations and recruit and develop exceptional talent;
• Build a merchandising program which excels at providing the merchandise expected by the targeted customer, which constantly reviews new products and categories while rationalizing existing sku’s, which excels at making money through effective merchandising and consistently finds margin basis point improvements, and which creates excitement for the merchandising program throughout the company;
• Lead a finance team which is more than a recorder of numbers to one dedicated to helping the organization by providing the analytics and instructions for the merchants to understand the financial impact of their decision making and for the other functional areas to understand the best return on investment strategies. This is a Value Creator!;
• Build a supply chain program which results in reduced inventories with the same or better levels of customer service while also reducing logistical expenses;
• Build systems to support the operational, marketing, and merchandising program enhancements; and
• Develop strategies to expand the company in new markets internationally.

In these times when the nation is still ‘over stored’ and, with so many competitors offering the same or similar goods, those retailers who will excel in the next few years will be those who have some advantage, whether it be perceived value by the consumer or operational, marketing, financial, and/or human resources strengths. It will be up to the retailers who want to excel to find a way to create this differentiation in the market place and this is best done by hiring strategic executives who can create and maintain the differentiation.

How do you find these strategic hires? Strategic hires require a major investment. In this market it can cost $100,000 to $150,000 or more to relocate an executive. In addition, you have costs related to the time it takes the executive to learn the company and become comfortable in the new role. These costs represent an investment you cannot take lightly and you definitely cannot afford to make a mistake. This means the process for identifying and recruiting candidates must not be taken lightly and also requires an investment.

Yes, in this employment market there are many executives who are desperate for employment and who are available on job boards. Although these may be top caliber executives, the important questions are: (1.) Are they the right executives for your strategic role? and, (2.) Do they have the best skills and experience as well as possess the strategic mind set? Your organization can interview dozens of these looking for the right individual. The important question is whether you are interviewing from dozens to hope for the right person or are you interviewing and selecting from a slate which has several candidates with the most appropriate skills, experiences, and personal characteristics to make sure you are getting the best strategic player for your team.

It may seem self-serving, but I strongly believe the best return on your recruiting investment for a strategic player is accomplished by engaging a search firm which specializes in serving the retail industry and which has a track record of recruiting strategic players which have proven to make a difference over both the short- and the longer-term. When you consider the cost of making a mistake, this approach is your best investment.

How do you select the right executive search firm? Based upon my years of experience in the recruitment of senior retail executives, I strongly recommend you take careful time and put in significant energy to choose a retainer based search firm to manage the recruitment of strategic hires. I recommend you interview at least four firms before you make your choice. Questions you should ask include:
-Does the search firm and the consultant who will work with you on your assignment truly understand the definition of a strategic executive and know how to determine if candidates have the experience that you require? Keep in mind, you are not asking who the search consultant knows, but, instead, what companies should be targets and why executives in those companies have the specific experience required. You are looking to guarantee a strong slate of candidates from which to select. Feel free to ask the search firm to provide you with a list of targeted organizations (along with reasons why) with their proposal to conduct the search assignment;
-Does the consultant know how to select a strategic versus a tactical executive? I recommend you have the search firm as part of its proposal prepare a position specification fully describing the position and the candidate. Instead of providing the search firm with the details of the position and the candidate, I suggest you have the search firm do it so you can assess their understanding of the position and your needs.
-Does the search firm have the resources to invest into the search assignment to determine all possible talent pools to find the best candidates? In my opinion, it is not in your best interest to have the search firm only identify the most obvious and visible executives. You require a firm which has a research group and which has databases available to identify all appropriate talent banks.
-Does the search firm have relationships with the obvious target companies to prevent them from contacting potential candidates in those target organizations? Why should you engage the search firm which recruits for the targeted organization as this means the search firm will be barred from recruiting executives from this organization to yours; and,
-Will the consultants working on your assignment have the time available to do the work? If the lead consultant is handling too many assignments at a time, it is likely he/she will not have the time to do your assignment justice.

First and foremost, you are in charge of your company’s future. You are not lucky to have a particular search firm working for you. Instead, you are smart to choose the right firm to do this strategic assignment. In my opinion, by following this process you should be able to build a team which will make a difference.

Retail Executives: Are you a job hopper?

Friday, July 23rd, 2010

One of the worst labels an executive can get is “job hopper”. This is an executive who has had multiple employment changes in a short period of time.

In the eyes of the prospective employer this raises many red flags. Job hoppers are usually the first candidates to be ruled out by employers and search firms as there are so many good candidates who don’t carry this baggage.

There are many reasons for too many career changes. These can be:
-unfortunate circumstances
-bad choices
-bad timing
-incompetence/malfeasance
-the idea that one should always be looking for the next job
-listening to a self-interested recruiter who wants the executive to move on to earn another fee.

We all make bad choices. Once is understandable. After that, it is a reflection upon the individual’s personal judgment or his/her inability to do good due diligence before accepting new employment.

Obviously, the executive who changes employment because of incompetence or malfeasance is always eliminated.

Just as importantly, the one who is always looking for his/her next job with another employer is also eliminated from candidate slates. The reason is simple. Employers are not simply looking to fill a position. They want someone in whom they can invest for future returns.

The tough issue is for those who ran into unfortunate circumstances.
-They had to leave an organization because of personal or family illness
-The family ended up not making the move or could not accept the new city
-The executive who followed a superior to a new company and accepted the superior’s due diligence on the new company which failed shortly afterwards.
-The new employer was acquired or new management was installed that terminated current employees.
-The economy tanked in 2009.

One of these events in a career is understandable. But two or three such events make it difficult to avoid the deadly job hopper label. Be honest and factual when you describe the circumstances to a prospective employer. Covering up your mistakes will only hurt you.

If you are labeled as a job hopper, it is very similar to having a low credit score. You can work your way out of it. You need to be dedicated to your new employer and committed to building your new career in that organization.

If you are tempted to make a jump simply to catch up with your peers, consider that you may be about to commit a fatal error.

Retail Careers: Developing Creative Fashion Executives

Wednesday, June 2nd, 2010

There is no doubt that running a retail business is complex and demands executives with more education. On the other hand, fashion retailing is also a creative art form and requires executives with passion for color, design, and texture. As we bring in executives with more business skills, are we losing the creative senses so required for fashion? If so, what do we need to do as an industry to recruit and develop those with the creative talent to create uniqueness, important differentiation, and stimulate the emotional triggers that are the foundation of the fashion business?

Following is an article we published in 2009 which shows the trend towards highly educated CEO’s in fashion retail.

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Higher education grows as a key to CEO success in fashion retailing.

The second report in a series of retail industry surveys conducted by Plummer & Associates reveals that 60% of the Chief Executive Officers in the top 50 fashion apparel retailers hold a bachelor’s degree. Of this group 26% also hold advanced MBA degrees.

As expected, 34% of the CEOs in fashion apparel retailers have advanced directly through the merchant ranks. It is also significant to note that the remainder of the CEOs developed through the financial and operating sides of their businesses.

While this survey showed no trend toward any one school producing today’s CEOs, CEOs with advanced degrees tend to hold degrees from Harvard, Columbia, George Washington University, Stanford University, University of Chicago, New York University and Darden at the University of Virginia.

A similar study ( http://www.prweb.com/releases/2009/04/prweb2298774.htm) conducted earlier this year by Plummer & Associates shows that fashion apparel retailers lag behind CEOs of other major retailers for bachelor’s degrees.  Out of the top 100 retailers, 85% of the CEOs have bachelor’s degrees as compared to only 60% of fashion retail CEOs.

CEO EDUCATION

TOP 50 Fashion Retailers

Bachelor Degrees 60%

MBA Degrees 26%

Top 100 Retailers (all segments)

Bachelor Degrees 85%

MBA Degrees 28%

JD Degrees 6%

The researchers fully expect the trend toward advanced degrees for fashion apparel retail CEOs to continue. As the retail industry consolidates and business demands become more complex, CEOs will need all the intellectual tools a formal education provides.

While working from the cutting table to the top may have been a viable career path in the past, the constantly evolving and complex nature of today’s retail landscape requires that executives must couple their ground up experience with the sophistication and strategic vision gained through earning a college degree.   

Retailers have consolidated from regional companies led by founding families into massive, complex businesses requiring sophisticated tools to manage them effectively. This new breed of retailers is intensely competitive and constantly looking for cost and marketing advantages to secure their market position.

Some of the complexities facing retailers today demand a command of following disciplines:

Marketing – Sophisticated reporting systems have elevated the ability to forecast demand, to measure customer buying pattern changes, brand awareness and customer loyalty, and to help build brand value. Each retailer now operates through more than one channel, (retail, e-commerce, catalog, direct marketing) requiring that the decisions made for each channel are highly strategic.

Supply Chain Management/Logistics – Today there are tools available to help retailers secure significant cost advantages throughout the supply chain while simultaneously improving customer service. This gives retailers significant competitive advantages.

Merchandise Management – Advanced technologies are now required to source merchandise for product development, assortment planning, SKU rationalization, customer knowledge, trend analysis, and inventory and category management. The most important part is utilizing these technological advances to increase profitability.

 Finance – This function has quickly progressed from recording history to active involvement in creating value through analytics and is now vital in allowing a retailer to compete for capital against all other industries.

Legal – Our society has become more litigious making larger businesses more of an attractive target. The complexity of new regulations has resulted in an increase in legal staff. A retail leader is now required to be more involved and responsible for setting the tone of legal strategies.

Human Resources – Once considered just a major expense, Human Resources managed effectively must now create differentiation versus competition. A company’s culture and devotion to the customer are now more important than ever.

Information Technology – In the past, technology seemed to be the sole domain of the IT department. . With advanced POS systems, the retailer has learned the power of information and no longer relies solely on market information provided by the vendor. Leading edge IT departments now interrelate with the entire organization by providing useful information to aid in decision making, control costs, forecast and analyze. Companies are now operating enterprise wide systems and the CEO must know the capabilities of these systems to ensure the company gains a competitive edge.

Global Reach –The days when retailers only operated stores in the U.S. with product only secured from U.S. sources are gone. The implications of the global activities are enormous.

In the late 60’s and 70’s the retail industry started recruiting top students from colleges and graduates from MBA programs. These forward-looking retailers saw the need for talented executives and brought highly educated executives into the retail industry.  The top leaders at that time were: Federated Department Stores, May Department Stores Company, Allied Stores, J.C. Penney and Company, Sears Roebuck and Company, and The Gap. These recruiting programs produced many of the CEOs of today’s most successful retailers.

It is clear that fashion retailers need to compete in the market place to bring the brightest talent superior intellectual tools and education to manage the business for the future. And, it is also clear that college recruitment programs need to be continued and expanded so that fashion retailers can maintain an edge over competitors.