Most principals of decorative plumbing and hardware showrooms bury their head in the sand when it comes to evaluating their businesses. They don't take a hard look at reality or, as Jim Collins suggests in Good to Great - "the brutal facts" of where their business is and the direction it is headed.
If you own a showroom and do not constantly perform self-evaluations, there is little chance that change will occur. Walking through the business world with blinders on may result in the steady erosion of market share and profitability, and perhaps the loss of the business altogether.
The first question you should ask yourself is: "How do your rate your performance?" The second question you should ask is: "What are the criteria used for the evaluation?"
As Americans, we tend to use a numerical basis for everything we do. In school, we knew that if we scored a 95% on a test, we would receive an A. If we scored 1600 on our SATs, there was a good chance that we would be accepted to Harvard. We measure how soon we learn to walk and talk. We want to quantify performance and compare it to others.
Testing Your Company
At the Decorative Plumbing & Hardware Association (DPHA) Breakfast held in May at the Kitchen/Bath Industry Show, I challenged my peers to take a test. I asked them, if they had to rate their companies on a scale of 1 to 100, where would they fall?
I found that most people gravitate toward the higher end, giving themselves a score between 85 and 95. The low 90s was the median.
This generous self-evaluation becomes more realistic if you change the scale from 1 to 100 to 1 to 10. Ask yourself where you would fall. Again, most successful entrepreneurial owners are liberal in their self-evaluation and grade themselves between 8 and 9. Compress the scale a second time. Change the criteria from 1 to 10 to 1 to 5. A new rating of 4 is not as good as an 8.5. The smaller the denominational scale becomes, the more reality sets it.
The ultimate test, however, is to rate yourself on a scale of 1 to 2. Two means that you perform better than direct and indirect competitors and 1 means that the competition offers more to your customer base than you do at the present time. In all areas where you are a 1, there is room for growth and improvement.
Are you ready to take the test? Consider the different components that comprise your business: physical plant, marketing, merchandising, displays and staff. On scale of 1 to 2, rate each component considering the following.
As yourself the following:
Rate yourself on the following:
As yourself the following:
We are in the retail business. We need to compete and benchmark our performance not only against other showrooms that offer similar products, but other retailers that are competing for disposable income. Should your market spend its discretionary dollars at your showroom or at the Williams Sonoma down the street? Is your showroom a 1 or 2?
Ask yourself the following:
If I had to start my business over tomorrow, I would focus first on developing a corporate culture and then the physical plant. On a recent flight, I sat next to several executives from United Airlines who were returning from a course on how to build employee morale. Talk about being 10 years late and a million dollars short!
While the rank and file is requested to take multiple pay cuts and have their pensions turned over to the federal government, the top dogs at United continue to receive healthy salaries, stock options and bonuses.
As a result, United can talk until it's blue in the face. That business will never get there.
Every showroom owner should have a clearly defined and understood expectation of employees. They are the heart and soul of the business.
Does your rhetoric reflect reality? Do your staff members come to work simply to collect a paycheck, or is there another reason they are there? Is your staff a 1 or 2?