Addressing performance variability in your district is the most important activity you will address. So, what do you do about it? First, let’s define performance variability. Performance variability occurs when there are stores that run the gamut from up double digits to down double digits. I often talk to Regional and District Managers about this and find it is not something that is being reviewed on a regular basis. Don’t get me wrong, they are aware there are top and bottom performers, but they have not done the math to determine what these bottom performers are costing them. The biggest question I get asked is “So what do I do about it? I can’t fire all the bottom performers, its hard to find talent.”
How To Evaluate Your Team’s Performance Variability to Sales.
Okay, the good news is I can help you reduce the performance variability across your market, no matter how large! I am going to start with the process for district managers.
Step 1: Pull out your Year-To-Date (YTD) sales results. Rank the stores from highest performing to lowest performing on their performance to sales plan, last year’s (LY) results, or whatever sales goal your teams are given. If you have both a sales goal and an LY, review them one at a time. This can be done against sales plan/LY results but can also be done in any key metric.
You should now have a list of every store’s results force ranked from top to bottom. What is the total spread? Here is an example: District A has 10 stores. The top store is +21 to their sales goal and the bottom performing store is -12% to their sales goal with lots of different results in between. That is a variability spread of 33 points.
So what do you do next?
Step 2: Starting with the bottom stores, evaluate the store leader in each location. A few questions I ask:
- Is there a known issue that is currently being coached to?
- Is there a potential issue but you have not addressed it yet?
- Are the results soft, but its not a talent issue?
Based on your responses for each store, determine what steps you will take next to address the issues.
How to Calculate the Math on Bottom Performing Stores.
It is easy to look at the results and see there is an opportunity, but its best to know just how much sales volume the bottom performers are costing.
Here is how to do the math:
- First start with how much volume each of the bottom stores needs to make up to achieve their sales target. To get this number, subtract where they are currently on the year with where they need to be to at least be where the middle performers are. (i.e., They need to be at $250,000 YTD and they are at 198,567 YTD. This means they need to make up $51,433. Let’s say the goal is to make up the missed volume by June 30. At about 8 weeks away, they need to do an additional $918/day. Now divide that by their AOV. Lets say it is $215, they only need 4 more transactions per day.
- Take a look at their traffic and conversion results. Chances are good they can pick up 4 more customers a day off their traffic.
You will know best what is realistic to make up the lost volume. Do the math off timing that make sense for your business.
Now do this for each of your bottom locations. Add up the volume they owe you and you will likely see its a big matzo ball hanging out there! Don’t stress, nothing a good action plan can’t help fix!
Create your Action Plan to Get The Volume Back.
Now that you know how much volume this performance variability is costing you, it is time to create a plan for your stores to pay back what they own on the year! There will not be a “one size fits all” solution. This will be a store by store plan as each location might have their own challenges.
I like when district managers connect with other peers who are doing well and get thoughts from them on how they are driving results. Many leaders don’t want to do this as they don’t want to appear weak or like they don’t have all the answers.
YOU DON’T NEED TO HAVE ALL THE ANSWERS. It is ok to ask questions and learn from others! They will be flattered you are asking and will be more than happy to help you!
Talk to the Store Manager about their Action Plan.
The next step is to sit down with each store manager who has volume to make up and find out what their strategy is. They might need your help figuring this out. Walk them through the math, it will make them smarter!
The action plan should be owned by the Store Manager with accountability from you on how to acheive it. I recommend weekly conversations for store managers who are struggling and bi-weekly for the others.
Make sure their action plans are specific, trackable, relevant, attainable and motivating!
Performance Variability Does Not Go Away On Its Own.
The last important point is district manager behaviors that I would encourage you to start doing right away.
- Talk about performance variability on your district calls. The old saying “what gets measured gets done” is true. When you talk about it consistently on your calls, the team will start to be aware of it and work to reduce it.
- Talk about progress to their action plan during your 1x1s and store visits. The goal is to encourage them and continue to highlight improvement. That is how we will motivate results. It cannot just be about achieving the end goal.
I have created a tool you can use to manage performance variability in your district, check it out in the Guides & Checklists. I hope this is helpful. Let me know how you are doing!
In your corner,
