2010 Hay Group. All Rights Reserved. Store Managers Mobilization Study: How to engage the Store Managers to Feel and Act as Owners AB Vassilopoulos

Transcription

1 2010 Hay Group. All Rights Reserved Store Managers Mobilization Study: How to engage the Store Managers to Feel and Act as Owners AB Vassilopoulos

2 Store Managers to Feel and Act as Owners In 2008 the retail sector in Greece was facing significant challenges coming from developments in information technology, high competitiveness, globalizing business structures and, most importantly, increasingly knowledgeable & demanding consumers in search of service excellence, choice (assortment), best value for money, convenience, quality, unique shopping experiences, freshness and safety. AB Vassilopoulos has been involved in the retail industry many decades and it is the second largest super market chain in the food retailing sector in Greece. Its main challenge being to sustain the competitive advantage through strategic alignment and organisational effectiveness, it came obvious that there was a need to focus on the stores network and the Store Managers. They needed to identify these issues relating to the management systems and processes and affecting Store Managers performance and ability to improve business results. In this context, Hay Group conducted a study on how to empower and mobilize AB Vassilopoulos Store Managers in order to: Create/increase sense of ownership / identification Put focus on both short & medium-term objectives, Increase their commitment & engagement in the day-to-day operations Improve their management systems and help them achieve their business targets (qualitative and quantitative) Attract & retain top talent More specifically, we assessed the Strategic Alignment & Clarity, re-evaluated the Area & Store Manager jobs, examined deployment levels of Management Systems and Processes, assessed Store Climate, Freedom to Act / Innovation and competitiveness of reward structure. page 2 of 5

3 Winning the war through enhancement and effectiveness AB VASSILOPOULOS S.A. was established in December 1969 by the brothers Gerasimos and Charalambos Vassilopoulos. In November 1990 it was listed in the main market of the Athens Stock Exchange and since July 1992 it is a member of Delhaize Group (65,23% ownership). It counts 201 stores in Greece with a turnover of 1,337m and a operating margin 3,4% (as of December 2008). With a workforce of people, AB ranks among the most important employers in Greece with 66% of employees being women and 34% men. The fulltime staff represents 49% of the total. Key Milestones: In 1994, AB Vassilopoulos launched its "private label" product line, combining quality with competitive prices. Today, it has more than 2,700 private label products. In 2000, AB Vassilopoulos acquires TROFO and ENA Cash&Carry, thereby forming the second largest retail chain in Greece. In , a new distribution channel is added to Group's development program, that of Franchising. In 2005, two new store formats are created for the Franchise business: AB FOOD MARKET for medium format stores and AB SHOP & GO for small format stores. In 2008, in one of the most important highlights in the domestic retail industry in Greece, AB Vassilopoulos acquires the discount retail chain Plus Hellas, enhancing both its network and its presence in Northern Greece. It also launches a new type/ concept of low-price stores, Lion Food Stores. AB Vassilopoulos challenges In 2008, all these developments (acquisition of Plus Hellas and P.L.L.C. S.A) create a changing and increasingly demanding environment for AB Vassilopoulos, further reinforced by the external economic conditions and the consumers choice to move towards less expensive, private label products. AB Vassilopoulos recognized the importance of the enhancement of the Store Managers capabilities and effectiveness as an essential condition to respond effectively to those changes, achieve outstanding performance and sustain a competitive advantage. The main objectives were focused on revenue growth and the engagement and mobilization of the store managers in order to increase store s business performance within a challenging work environment. Hay Group has been recognised as the best partner in addressing this challenge. Hay Group has a long and successful history with AB Vassilopoulos, started in Since then, we have delivered various projects such as job modeling (2001), succession planning system (2003), performance management system (2004), Top Team workshop (2004), Leadership programs (2007), and Grading structure (2008). All these years, Hay Group managed to build a long-term relationship with AB page 3 of 5

4 Vassilopoulos and gain a great experience and knowledge of its environment, which was reflected on AB Vassilopoulos trust and commitment. These were reinforced by our global consulting engagement in the retail sector. Hay Group s approach AB Vassilopoulos main concern was to start developing a culture of ownership by engaging the Store Managers to feel and act as real business managers and entrepreneurs of the Store under management. AB Vassilopoulos partnered with Hay Group in: a. identifying what really differentiates: Top from Average Stores Top from Average Stores Managers b. assessing a number of enablement factors, such as the management systems currently in place (performance management, reward and recognition, etc.), Hay Group had to identify key strengths & improvement areas for both the Stores and the Store Managers and make specific recommendations. In that respect Hay Group conducted a study on a sample of Stores and Store Managers to assess the Leadership Styles they demonstrate, the associated impact that those styles are having on the Organizational Climate experienced by the employees and how that affects the bottom-line performance. The approach included the following phases: 1. Role clarification meetings with key stakeholders (Retail Operations Executive Director & HR Executive Director) in order to clarify key accountabilities & expectations with regards to Store Manager role, and how is this changing based on the business agenda for the next three years. 2. Structured interviews with the Area Managers and the Store Managers to understand their perception of the Store Manager s role, address clarity issues, assess the effectiveness of current management practices, job satisfaction issues, business challenges and the content of their day to day activities. 3. Use of Diagnostics with the Stores personnel to assess the Organizational Climate and the Leadership Styles demonstrated by the Store Managers. Furthermore to clarify the key elements that make the difference in business performance. This phase included external benchmark analysis, comparing AB Vassilopoulos with the retail sector and other supermarkets as well as an internal comparative analysis (Top vs. Average performing stores). 4. Spot-interviews with Customers at selected stores to understand their expectations on Customer Satisfaction & Service. page 4 of 5

5 The survey results identified a number of areas that the business should be focusing on (systems and people s capabilities). Those included: How success looks like for the Store and the Store Manager The development of the leadership capability of the Store Managers, make them understand that their objectives must be more balanced than just achieving the financial results The communication of the company values to all employees, how these values are communicated and what are the winning behaviors expressed in the everyday working life that support the values and the realization of the business strategy The review of the short-term reward and recognition schemes The process of cascading goals down to the front line employees The review of the standard operating procedures for the Retail Operations Division The benefits for the client: The study has allowed AB Vassilopoulos to develop: a clear understanding of the different aspects and key areas that affect the Stores and Store Managers performance an action plan of the next steps / initiatives have been launched with a direct impact on the business performance of the company. Although it s still too early to have measurable results directly related to the iniative, initial indications are very positive. page 5 of 5