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Team Building Essentials Proven by Google

In 1990 I wrote a description of Team Building practices to help my facilitators understand the process when working with our groups. My program at YMCA Storer Camps utilized low and high ropes course initiatives and rock climbing to foster team building. The goal of every group was to get to a new level of Trust among the members. Sometimes we got there, sometimes we didn’t.

That’s me leading a rock climbing expedition to Rattlesnake Point in the summer of 1991.

The process, however, was the key. Even the groups who never got to a level of fully trusting each other did learn to communicate better, did learn to cooperate better, and saw the power of coordinated effort. Those are often seen as the Three C’s of Team Building.

I want to add a fourth C to that list, one that I think is most important …

Caring.

That was the differentiating characteristic between groups that made it to Trust and groups that did not. Only when a group started to put the needs of others ahead of their own did they show they cared. Only when a group looked at everyone’s emotional and physical safety as being the top concern did they show they cared.

Caring was the stepping stone to Trust.

You don’t get to Caring easily. It takes a whole bunch of other C’s. You have to first become Comfortable with each other. Then you have to learn to Communicate effectively. Then you have to learn how to Coordinate your efforts and Cooperate with each other. Even then, Caring is not a certainty.

When I was training my facilitators we often talked about the Transformation. Caring happened when the focus of the group shifted from “getting to the end of the task” to “getting everyone to the end of the task. Caring happened when inclusiveness was more important than successfully completing a task, even though inclusiveness was often the best way to complete a task

There are several ways to complete any task. The first is to have a powerful, talented individual who gets the group to the end line through sheer brute force of their abilities and/or leadership. The second is to have every member included, every member supported, and every member working together. The former disappears as soon as the individual leader is gone. The latter stays around and becomes the culture that continues success even as the parts change.

That’s why our true goal of every team building activity was to cross over the bridge from Cooperating to Caring. That leap was where the transformation occurred and changed the culture of the team. The step from Caring to Trust was much shorter and easier.

Of course, this was all theory from my own practices and observations in Team Building, until Google went about proving it.

Google did research of their teams to see if they could figure out why some teams were more successful than others. They found “five key dynamics that set successful teams apart”. Those five key dynamics in order of importance are:

  1. Psychological safety
  2. Dependability
  3. Structure and clarity
  4. Meaning
  5. Impact

Psychological Safety is Caring. It is making the group and the individuals within the group feel supported. A group of individuals who are feeling supported are more willing to think out of the box and take better risks, which leads to better performance in the long run. This was the most important dynamic for successful teams.

Dependability is Trust. In team building terms, we get to Trust after we get to Caring. But once we get there, we have the two most important dynamics found in Google’s study.

The other three items on the list match up nicely with Daniel H. Pink’s book Drive and his three keys to motivation. Pink says your team needs:

  • Autonomy
  • Mastery
  • Purpose

Structure and Clarity is the same as Autonomy in that you have given your team the guidelines to do what they need to do and have left them to do it within those guidelines. Micromanaging takes away that structure and clarity because everyone is second-guessing the rules, waiting for you to change them on the fly.

Meaning and Impact are the Purpose of what you are doing. Make sure your team always knows Why you do what you do and how that affects the customers and the company.

Google’s research is fascinating because it confirms exactly what I started teaching 27 years ago, and validates everything Daniel H. Pink wrote in his book about motivation.

So how do you get that kind of a team?

First, hire individuals who care about others, who show empathy. Caring is a tough character trait to teach, so look for it in your applicants.

Second, train them. Team building doesn’t have to be a corporate-retreat-three-day-weekend-activity. Team building can happen over the long run, fostered by the other C’s of being Comfortable, Communicating, Cooperating, and Coordinating. Work on those skills in your training. The better your team learns to communicate and cooperate, the more likely the leadership of those who care will take the team to the next level. You’ll see the transformation when it happens.

-Phil Wrzesinski
www.PhilsForum.com

PS Yes, I still do Team Building for groups when you want to kickstart the process. I also do training for Managers, teaching them the basics of Team Building and how to foster short-term and long-term growth in their team. The cool thing is Google just confirmed that what I have been teaching creates the most effective, successful teams.

PPS What should you do about your team members who don’t care about others? Unless you have a job where they work completely on their own with no interaction with the team or the customers, fire them and start over. Seriously. They’ll never serve your customers the way your customers want to be served. They’ll never let the team get to its highest level of productivity. They’ll never grow your business. Don’t take my word for it. Listen to Google.

Taking a Deep Breath of Perspective

We all meet interesting people from time to time. For one year I had a person enter my life that gave me a world’s worth of perspective. At the time he was the store manager of one of the big-box discounters in town. While our sons shared activities together, he shared amazing information not only about his store, but about all the big-box discounters in town. It was eye-opening to say the least.

If you have only recently found this blog, you should know that I am a big believer in calculating and understanding your overall market size for your category and knowing your share of that market. The easiest way to find the size of your market is to find national numbers for your industry, divide by the US population and multiply that result times your market population.

For instance, if you are in a $20 billion industry, divide that by 323 million people in the USA to get $62/person. If your market is 150,000 people, then multiply $62 x 150,000 to get a market size of $9.3 million. You can adjust that number up or down based on your local economy (your average household income versus the national average). You can also adjust for other factors like geography (more boats are likely to be sold in Michigan or Florida than Nebraska), or demographics (your percentage of children compared to the national average if your category is marketed primarily to children). It gives you a rough estimate, that if you calculate the same way year after year shows you exactly where you stand in your market.

I’ve been doing this in the Jackson market for decades and measuring our share over the years.

My big-box friend handed me numbers of what the big-box stores were doing in toy sales in our market. Adding them up, the math fit what I already knew about the size of the market in Jackson. The part that made my heart flutter was knowing that I was doing more in my single store than any one of those big guys.

 

Is it a Vase or Two Faces?

Here’s the perspective part … 

All of these stores do way more volume overall than I do because they also sell grocery, clothing, hardware, electronics, and household goods among other stuff. All of these stores have way more traffic on a daily, weekly, monthly basis than I could ever imagine. All of these stores run weekly sales and discounts with huge flyers in every Sunday’s paper to go with their national TV campaigns and other advertising efforts. All of these stores focus on the hottest TV-advertised toys every year, adding the vendors’ marketing efforts to their own. All of these stores get full-blown media coverage, too.

Think about that last one for a second. This holiday season you are going to hear stories about Amazon, Walmart, and Target. All. The. Time. You are going to hear about their sales. You are going to hear about their overall volume. You are going to hear about their strategies to draw more traffic (more discounting—you read it hear first!) Your customers are going to hear all that, too.

Yet locally, without the discounting, without the hot items for your industry, without the national TV campaign and Sunday flyers and vendors marketing for you, without all the grocery-driven traffic, without all the media hype, you’re going to stand toe-to-toe with these big giants and still do amazing numbers in your category, maybe even equal or better than they do individually.

When people tell you it is all about price, and that discounting is the only way to get sales, go ahead and nod your head in agreement until those uninformed people walk away. Then remember that a guy in a small, depressed, blue-collar city in Michigan with all the inherent disadvantages was able to beat all the big guys through better service, better staff, product knowledge, smarter marketing, and higher prices.

You will, too!

-Phil Wrzesinski
www.PhilsForum.com

PS Calculating Market Size and Market Share can be incredibly helpful, even if your business is growing. If your market is getting bigger, but your share is decreasing, then even though you are growing, you are still losing out to competitors. Something needs to be fixed. It can also help you understand why sales are decreasing and when to get out of the market. We saw our market shrink to a size that wouldn’t sustain us in our current model. Our options were to shrink to fit the market, move to a different market, or close. We chose the latter so that I could spend my time helping a bigger market … you!

PPS That store manager left Jackson the year after we met to run a larger store in another part of the country, but not before leaving me with a wealth of knowledge and a perspective for which I am eternally grateful.

Connecting the Dots to Make Your Hiring Better

We sold a ton of dot-to-dot books over the years. I bought them by the number count – 10, 20, 50, 75, even 100-count dot-to-dots. I loved dot-to-dots as a child. My favorite was to try to guess the picture before putting pencil to paper, seeing the image in my mind. A few years ago there were some dot-to-dots designed for adults with up to 1000 dots in a single picture. (Yes, you needed a magnifying glass and a super thin mechanical pencil to do some of the more complex pictures.)

Today I want to connect a few dots for you in the hiring process.

If you have read my book Hiring and the Potter’s Wheel, you know that to find the best employees you need to find the right character traits for the job. For instance, if you are hiring a sales person, you want someone friendly, engaging, and able to solve problems. If you are hiring a bookkeeper you want someone organized, detail-oriented, and task-driven. The best person for the job has to bring those traits to the position. You can’t train those.

Yet, the first thing I do when I work with a client to help them write a job description and list of the traits they need to hire for a specific position is talk to the client about his or her personal Core Values. If you are the boss, the owner, the final decision maker, your Core Values become your company’s Core Values. What is important to you personally will be what is important to you professionally. It is where you will spend your most time, energy, and focus. Roy H. Williams and David Freeman taught me that.

It is not just enough that the people you hire possess the traits necessary to be successful on the job. To truly become an asset on your team, they need to share some of the same values you and your business share.

Toy House Character Diamond and Core Values
The Toy House Character Diamond – our Core Values that drive our business.

For example, my core values are Having Fun, Helpful, Educational and Nostalgic. While it isn’t important that you match those values perfectly, the more you match, the better we will get along.

Fortunately for me, a toy store attracted mostly people who like to Have Fun. I also hired specifically for the trait of being Helpful. My office manager had traits I will never have of being ultra-organized and detail-oriented. But she also was amazinglyHelpful. On top of that, she celebrated the seasons and holidays even more than I did. My key jack-of-all-trades guy had a level of Curiosity that surpassed my own. My event planner took Nostalgia to new levels and was always trying to Teach others. One of the most common phrases I heard her say was, “You can do that. Here, let me show you.”

When your staff doesn’t share your values, you get frustrated. You feel as if they don’t get you or what you are trying to do. Oh, they get you. They just don’t put as much value on the things most important to you. They may have all the other traits perfect for the job and may even be performing to a high level based on those traits, but if you don’t value the same things, you’ll always feel disappointed by them.

Connect the dots.

I saw a snippet of a training my good buddy Tim Miles did for business leaders managing their people. The slide had three words. “Walk the talk.” Tim goes on to tell you that you have to be consistent in what you say to your team and what you do personally. We all know that hypocrisy causes distrust. The do-as-I-say-not-as-I-do style of leadership doesn’t last very long. The strongest organizations are those where the leaders walk the talk. Your Core Values come into play here, as well.

When you let your Core Values guide you, you will always walk the talk, because you are starting and ending with the very essence of your being. Your consistency will never be questioned because even in moments of stress, your Core Values will guide everything you do. Your staff will know exactly where you stand at all times.

When Tim mentions that you should walk the talk, he isn’t saying that you have to have done every single thing you ask your staff to do. He is asking that you lead through consistency, that your actions match your words. I don’t like filing papers away. I hired a bookkeeper who loves filing papers away. What we both share is a deep desire for being helpful. It isn’t as important that I know how to file as it is that I show her I will be helpful to her and ask that she be helpful to me in return. Her way of helping me is by doing the stuff I cannot or don’t want to do. It just so happens that she has the traits of being organized, detail-oriented, and task-driven to go along with the value of being Helpful.

Connect the dots.

Daniel H. Pink, in his book Drive, says that to get the best out of your employees you need to offer them three things—Autonomy, Mastery, and Purpose. Autonomy allows them to do the job their way without the feeling of being micro-managed. Mastery means they are getting the opportunity to gain skills, learn, and become proficient at the task. Purpose means they understand why they are doing what they are doing.

Your Core Values come into play here as well. Of the three motivational elements, Mastery and Purpose are easy. Give them training and experience and feedback and they’ll become masters. Purpose is simply understanding your Core Values and what greater goal you’re trying to accomplish. Autonomy is the hardest of the three.

For you to be the kind of boss who checks in with your employees rather than checking on your employees, you have to develop a level of trust. It is far easier to develop that trust with people who share your Core Values than it is without. You know at the end of the day that their inner voice speaks to them in a similar language as your inner voice, so you trust that their decision process, while maybe not as experienced as yours, will be similar enough to meet the goals of the organization. Autonomy is tough when you don’t trust the employee. Without it, you won’t get the highest level of productivity. As a side note, if you are quick to trust, but your values don’t meet, you might get the wrong kind of productivity.

Connect the dots and you will see how your Core Values come into play in creating your own Dream Team.

-Phil Wrzesinski
www.PhilsForum.com

PS Go back and look at all the best teams you’ve ever been a part of. I can promise that you’ll find the individual members of the team shared many of the same core values. It took me a while to notice that in my own life, but in hindsight it is as easy to see as the arrow in the FedEx logo.

PPS When I say shared values, they don’t always have to be a perfect match. My jack-of-all-trades guy had the value of Curiosity. Not exactly the same as my value of Education, but close enough to be the kind of fit that made our team rock.

The Aha Moment (Or the Simplest Business Success Formula Ever!)

I’ve been looking at different job titles and job descriptions lately. The two that seem to grab my attention the most are the Marketing & Advertising jobs and the Managing People jobs. At first glance I figured I was drawn to those because those were two of my favorite things to do at Toy House.

Another thought hit me this morning on my drive home from dropping my son off at school.

Those two different jobs are really the same thing. Stop and think about it.

  • Awesome Customer Service is about figuring out your customer’s expectations and then exceeding them with surprise and delight.
  • Top-Level Selling is about figuring out your customer’s needs and then fulfilling them better than she expected.
  • Powerful Advertising is about figuring out your customer’s desires and then offering a solution better than she expected.
  • Amazing Events are about figuring out what your customer likes and then offering her more than she expects when she attends.
  • Incredible Managing is about figuring out what tools your team needs to be successful and then giving them better tools that take them beyond what they thought was possible.

It’s all the same thing.

  1. Figure out what she desires, needs, and expects.
  2. Give her more than she desires, needs, and expects.

That is the formula for a successful retail business. That is the formula for a successful service company. That is the formula for successful manufacturer. That is the formula for a successful advertising campaign. That is the formula for successfully managing your team. That is the formula for being successful as an employee.

The first part requires research. The first part is about studying human nature, watching market trends, thinking like a customer. The first part is about asking questions, listening, and analyzing what you hear. The first part is about testing and clarifying and testing some more. You’ll get it right some times and you’ll get it wrong some times. The better you do your research, the more often you will get it right.

The second part is about having that character trait in you that wants to help others. When you hire and train your team, look specifically for that trait and you’ll find the second part of the formula becomes second nature to your company. Your team will already want to give. You just have to show them what to give.

-Phil Wrzesinski
www.PhilsForum.com

PS An employee that figures out exactly what the boss wants and then gives the boss more than she wants will always have a meaningful job. A manager that equips her team with tools to make them better than they thought possible will always find people wanting to work for her. A marketer that can figure out the true desires of the customer base and speak to those desires will always move the needle. A salesperson who can figure out the exact problem a customer is trying to solve and then offer a solution better than she envisioned will always make more sales. A manufacturer who anticipates the needs of both the end user and the middleman and sets up a business to exceed both their expectations will find growth.

PPS I answered my own question. My Core Values include Helping Others and Education. I already have that character trait of giving (that’s why I write this blog and publish all the Free Resources). The Education side of me wants to do the research to figure out what to give.

Learning From the Mistakes of Others

As I was putting my resume together, I was thinking back on some of the Team Building activities I have created over the years. My favorite one was the Drainage Ditch Determination. That was 26 years ago. I wish I still had the original notes. I know we didn’t call it by that name but I cannot remember exactly what we called it. I do remember the activity and the lessons. I can take you back there in a heartbeat.

(Thump-thump)

That’s me holding the ropes on a rock climbing trip back in 1991

After a day of basic team building activities, the group was given a new challenge. A handful of canoes needed to be transported at dusk from one location to another. The only map available showed a lake and a drainage ditch that led from their current location to the destination (approx 2 miles). The map also showed hiking trails leading to the destination (approx 2 miles) but had the disclaimer that although the trails were well-defined, they were unmarked (and crisscrossed the region.)

The group was then split into four subsets.

  • Leadership. They got the final decision on what the group did.
  • Logistics and Planning. They were responsible for determining the options, presenting them to the Leadership group, and making sure everyone had what they needed to complete the task.
  • Communication. One of the rules of the activity is that there was no verbal communication on open water. This group had to plan out all communication and how it would be implemented including internally and externally.
  • Safety. They had veto power over all the other groups if ever they felt an activity was unsafe. They also had to set the parameters for safety such as wearing life jackets in the canoes, etc.

The challenge itself was fairly straightforward. The most obvious choice based on the information given was to paddle the canoes as far as possible and carry them the 40-50 yards necessary to the final destination. What the map didn’t make clear was the difficulties traversing the drainage ditch because it didn’t show the barbed wire fence or culvert obstacles to be overcome. What made it even more interesting is that the activity began at dusk. By the time the group reached the drainage ditch, it was fairly dark and only one flashlight was permitted.

You can probably see where this activity went. The first issue usually arose on the lake when members of the group realized some of them didn’t know how to paddle a canoe (and they had no verbal communication for giving on-the-spot instruction.) We had eye-opening conversations about the importance of making sure everyone has the basic skills necessary to complete a task and whether that was a leadership problem or a logistics problem.

Once in the drainage ditch, issues of safety, logistics, and decision making all came into play. On top of that, there was the issue of perseverance.

One group I facilitated got within ten feet of a split rail fence. Their destination was just on the other side of that fence, but because of major breakdowns in communication, concerns for safety (emotional and physical), and low morale, Leadership threw in the towel. We had a powerful talk about what to do when morale falters, and the importance of emotional safety. (Note: it was the right decision for them to quit when they did. In Team Building, completing the task is always secondary to safety and never necessary to learn the lessons.)

Even the groups that successfully completed the task had breakdowns along the way. It was in the failures that the best learning occurred.

We had discussions about how the division of powers, while fine on paper, tended to be fallacy in practice. Everyone had to be on board for safety. Everyone had to be on board with the logistics and plans. Everyone had to be on board with the communication. Leadership simply had to make sure everyone was on board. If someone didn’t understand or didn’t want to go along with the group, completing the activity was in jeopardy.

We had discussions about the importance of Leadership listening as much as leading. When Leadership didn’t listen to Safety or Logistics, that group was doomed to failure.

We had discussions about the importance of being able to stay calm and solve problems when unforeseen obstacles got in their way. Climbing out of a canoe in a drainage ditch to avoid a barbed wire fence in the dark was a challenge most people had never faced. One group mapped out a new policy for unforeseen obstacles for the next time they faced one on their real job (they were a group of Resident Advisors for a college dormitory.)

Back in 1991 my boss and I facilitated several groups through this activity that ranged from high school groups to the corporate leaders at Domino’s Pizza (including Tom Monaghan himself). I doubt the insurance companies would allow such activities any more.

Good thing you and I can still learn the lessons from the groups lucky enough to slog through that ditch.

“Learn from the mistakes of others. You can’t live long enough to make them all yourself.” -Eleanor Roosevelt/Groucho Marx/Sam Levinson (depending which quote site you prefer)

-Phil Wrzesinski
www.PhilsForum.com

PS One thing I have always found head-scratching in business is the knee-jerk reaction to immediately fire someone who screws up. Screw-ups happen. Wouldn’t it be better to keep the person who has already learned the lesson the hard way rather than hire a new person who hasn’t yet learned that same lesson? Just some food for thought.

PPS You might recognize the subset groups better by their corporate names

  • Leadership = Management
  • Logistics and Planning = Sales and HR
  • Communication = Marketing
  • Safety = Legal

Go back and plug those words into the post and see how those lessons become even more apparent.

What Are You Winning?

I admit it. I fall for click-bait headlines all the time. I saw one recently about the Columbus, OH based discount closeout chain Big Lots! that said, “Discounter Opens ‘Store of the Future’ “. Yeah, I had to see this.

The article went on to say how they had changed their signage and rearranged the furniture. They even added a huge Hello! sign by the front door and a huge Thank You! sign on the way out. My first thought was, “The 1990’s called. They want their store design back.”

Image result for big lots! hello signFortunately there was a link to a full article on their changes. Turns out the cosmetic changes are more because of the structural changes going on. Big Lots! is getting away from being a pure closeout store with different treasures all the time. They are focusing more on the categories where they perform the best.

As their CEO David Campisi said, “You can’t be all things to everyone. You have to take a position you can own and win.”

While his store design might not be all that futuristic, he is ahead of many of his peers with that last statement. (Toys R Us, I’m looking at you.)

Here is what I want you to think about today.

  • What position can you own in your industry?
  • Do you own it today?
  • Are you winning?

If you can answer the first question, you have a strategic plan. If you answered yes to the next two questions, you’re well on your way.

-Phil Wrzesinski
www.PhilsForum.com

PS If you would really like to see what a store of the future might look like, check out b8ta. I believe we will see more stores like this in the coming years.

PPS If you answered No to either of the last two questions, then ask yourself one last question. What will it take to get to Yes? Add that to your strategic plan.

When to Take a Political Stand

I watched my Detroit Lions lose yesterday after another controversial last-second call by the refs. I expected Facebook this morning to be filled with Lions fans questioning the call and talking about how we got robbed once again by the refs (by the way, I think the ruling was correct, but I don’t like the rule or how it ended the game. That’s my stance.)

Image result for lions martha ford during national anthem
Martha Firestone Ford standing with Lions Coach Jim Caldwell. ESPN photo

Instead all I found was post after post wondering who stood, who kneeled, who didn’t even show up for the National Anthem. After President Trump’s remarks in Alabama, this was the story crossing my newsfeed, with strong opinions on both sides of the issue. Everyone is taking a stand on this topic.

That raises an interesting point.

When is it okay as a business owner to take a political stand?

Some consultants will tell you NEVER. You cannot afford to alienate the 30% of the population that strongly identifies with the other party. They may be right. Sometimes it is best not to rock the boat or alienate anyone unnecessarily.

At the same time, however, you become more attractive to the 30% of the population that strongly identifies with your stance. There is something to be said for doing and saying things that solidify your relationship with your tribe.

The real issue, however, is that your customer tribe is yours because of your Core Values, not your political identity. My core values are Fun, Helpful, Educational, Nostalgic. It would be folly of me to believe that any one political party has a lock on any of those four values.

The only time you should take any type of political stance is when it is directly guided by one of your core values. When your stance is for (or against) something that has a profound impact on your core values, then your tribe will be standing arm in arm with you, regardless of party affiliation.

The First Amendment in the Bill of Rights grants you the right to free speech. It does not grant you the right to be free of all consequences. Taking stands earns points from those who agree with you and alienates those who disagree. When your stance is perfectly aligned and consistent with one of your core values, those whom you alienate will be people who likely did not share that value in the first place. Make sure you are okay with losing some people in the process before you step up to the mic.

-Phil Wrzesinski
www.PhilsForum.com

PS Even when the stance lines up favorably, pick and choose those fights carefully. They take a lot of energy away from working on your business and can often backfire. The saddest thing to me about Colin Kaepernick’s decision to kneel during the National Anthem isn’t about respect or a lack thereof. It is that his actions haven’t had the effect he hoped of spurring a new round of discussion about racism and profiling. It has only fueled heated discourse on respect, entitlement, and patriotism.

PPS If you do find yourself taking a stand as a business or as a business leader, remember these three rules …

  1. Whenever possible, be positive. Rather than be against something, be for something else.
  2. Offer a solution. If you don’t like something, offer an alternative. Instead of looking like a whiner, you present yourself as an intelligent, thoughtful person who has given both sides of the issue a good, hard look and wants to see a positive outcome.
  3. Don’t be afraid to say, “I’m sorry. I was wrong.” Sometimes you will end up on the wrong side of a fight. Better to apologize and move on than dig your heels deeper into the sand and make it worse. Admitting fault helps you win back those who were opposed.

Lessons From Toys R Us

By now you have all heard about Toys R Us (TRU) filing bankruptcy. I have been personally tagged several times on Facebook linking to articles about the bankruptcy (a couple former staff members have even hinted I should reopen Toy House now.)

Here are some things you need to know.

Image result for sad face giraffeFirst, this is a Chapter 11 Bankruptcy which is a reorganization type of bankruptcy. The giraffe isn’t going away. They aren’t closing all their stores and liquidating. That’s a Chapter 7 Bankruptcy. Toys R Us is banking on being able to restructure (and relieve themselves from) their debt so that they have the operating funds to continue competing in the toy and baby retail industries.

Second, David Brandon, the former Athletic Director at my beloved University of Michigan, is not the cause of their demise. (Many UM fans who hated Brandon for his poor job hiring football coaches want to scapegoat him for this, too. It’s easy, but wrong.) They were in trouble long before he got there.

Third, this is not a happy day for the toy industry. Even though Walmart surpassed Toys R Us in toy sales in 1998, TRU still does a tremendous amount of business and sells a tremendous amount of toys. There are many vendors in position to take huge losses in this ordeal. While the big guys like Mattel and Hasbro can likely afford it, many mid-tier and smaller vendors would be gone without TRU. That doesn’t help the rest of the industry.

Toys R Us is also important for new toy launches. The big-box discounters want tried and true. Without a large store willing to take chances on new products, there won’t be as many new and innovative products from existing companies.

A lot of people have opinions why Toys R Us is where they are today. Many want to blame Amazon. Still others want to blame the economy. I’ve read articles bashing their expensive new headquarters building, their lack of leadership, and the leveraged buyout by Bain, KKR, and Vornado.

One article wanted to blame TRU for spending too much on their stores and not enough on their website. Considering that TRU reported $912 million in e-commerce and $11.54 billion in total sales, that puts their online sales at almost 8%. (For comparison, Walmart only does about 3% of their total sales online, but that is skewed by grocery.) While 8% is impressive, it doesn’t justify taking money from the part of your business that generates 92% of your revenue and giving it to the part that only generates 8%. 

My opinion is that they didn’t spend the money on their stores the right way.

The real demise for Toys R Us started in 1998. That is the year Walmart surpassed them in total toy sales by dollar (McDonald’s Happy Meal beats them both in units sold.) 

Toys R Us chose at that time to take on the beast to reclaim their crown as king. They didn’t stand a chance. Walmart had more stores, deeper pockets, a larger advertising budget, better operational efficiency, and no need to make money on a category they saw as a commodity traffic-driver.

Seth Godin said it best. “The problem with racing to the bottom is that you might win. Worse, you might finish second.” Toys R Us finished second and we all lost because of it.

Toys R Us allowed Walmart to dictate to the world that toys are commodities, not the valuable educational tools every specialty toy store owner and every educator in America knows them to be. Toys R Us allowed Walmart to dictate that price was the only reason to buy toys. Once Toys R Us decided to compete on Walmart’s terms, they were done.

Hindsight being 20/20, the best move TRU could have taken back in 1998 was to reestablish their position as the “toy leader” and put their emphasis on the value of toys as educational tools, on the value of toys for promoting growth and development, and on the importance of choosing quality toys for your children.

If toys were thought of that way today, Toys R Us would have diminished the commodity role of the big box discounters and strengthened the toy industry as a whole, while firmly establishing themselves as the clear “toy experts” instead of a warehouse full of only toys competing with warehouses full of toys, hardware, clothing, housewares, and grocery. It would have been a win-win for them and the industry as a whole. They weren’t going to beat Walmart at Walmart’s game and likely never would catch Walmart in total sales (Walmart now has over five times as many stores.) But had they played to their own competitive advantage they would still be the king perceptually and the industry would be better off for it.

That is the lesson. Play to your competitive advantage. Play on your terms, not someone else’s. 

Right now the conventional wisdom is that Toys R Us owns too much real estate. Their stores are too big and costly. They need to close them down and sell off the real estate and focus online. I wonder how different the tune would be if back in 1998 they decided to make their stores more friendly and welcoming, filled with toy demos and play areas. What if they turned their stores into educational meccas offering classes on parenting, programs for preschoolers, and events that drew traffic? (According to this article, that is a little of what they are trying to do.) Instead they turned their stores into brightly lit warehouses with minimal staff and an entrance that makes you feel like a common thief just walking through the door.

Real estate is only an asset or liability depending how you use it.

There is still a chance for Toys R Us to turn the ship around. But they need to sail into different waters. I know a little about sailing. If you know David Brandon, tell him to look me up.

-Phil Wrzesinski
www.PhilsForum.com

PS It may sound like I’m suggesting Toys R Us be more like an independent specialty toy retailer. Umm … Yes! They have a far better chance being successful in that playground than in the big-box-treat-everything-like-a-commodity-warehouse playground they’ve been playing in. They had it right in their Time Square store and oh so wrong in the 865 other locations.

Working “On” Part 5 – Evaluating Progress

We all dreaded the blue sheets. As camp counselors at Storer Camps, we had to write up an “evaluation” of every camper in our cabin. The blue sheet was the worksheet we used. It had spaces for us to mark their daily activities and a few questions where we wrote short answers about their time at camp including what they seemed to like most, their strengths, and areas where they struggled.

The blue sheet dates back several decades. I remember my mom getting them from my counselors back in the 1970’s. I remember my own trials writing them late at night by flashlight on the porch of my cabin just to get them done on time. I remember turning them in to my director for approval only to be asked to rewrite them because of penmanship or to change a word or phrase. No time off until your blue sheets were finished and approved.

I also remember reading them as a parent and appreciating the thoughtfulness and insight that went into them. It made my boys’ camp experiences more meaningful. It gave me an outsider’s perspective of my children, a valuable measure of their growth.

Evaluations can be viewed as measuring sticks. They show you progress when you compare them to previous evaluations. They are also maps because they show you where you are in relation to where you want to go.

You are already using tools to evaluate your business. Your Profit & Loss and Balance Sheet are two of those tool. Your GMROI and Turn Ratio are also tools used to evaluate your business. These are easy tools because they measure hard, fast numbers.

If your Game Plan, however, is to exploit your Competitive Advantage of having better people offering better services, you have to have a map that shows you where your staff members are in relation to where you want them to go. You have to have a tool for evaluating their progress.

Some consultants believe in commission sales as the tool to evaluate your staff. If their numbers are going up, then life is good. The problem is that commission sales don’t always work in every type of retail store, nor are they truly an accurate predictor of someone’s selling skills since luck and timing and many other factors outside of pure selling skills have an effect on the numbers.

Some believe in written evaluations—blue sheets for your staff listing their strengths and areas they need to improve. I tried those and got frustrated by them. Although they measured, they didn’t map. Plus they took a long time to process and complete. They were as discouraging as they were encouraging. On top of that, if you don’t evaluate fairly and honestly without emotion using concrete, specific examples of problems needing to be fixed, these written reports could come back to bite you in a wrongful termination lawsuit.

Written evaluations are best for documenting unacceptable behavior to protect yourself in termination cases, but they don’t work as well for motivating your staff to improve.

Here are the concrete steps I suggest for mapping a path for your staff.

  • Talk to them. Sit down every so often and just have an informal conversation.
  • Ask questions. Ask them how they are doing. Ask them what they are working on. Ask them what they have learned from the training program (that I know you have implemented.) Ask them where they see themselves in the big picture of the store. Ask them if they understand their purpose for being employed. Ask, ask, ask.
  • Give them praise. Praise them for what they have done, what they have learned, and where they are. Roy H. Williams said, “What gets measured gets managed, but what gets measured and rewarded improves.” Praise is often enough of a reward to get the improvement you seek.
  • Offer suggestions. Based on your observations of their work, coupled with their own beliefs of where they are on their journey, give them suggestions for what they can “work on next” to reach the goals you have already spelled out for your team. Give them concrete action steps such as reading certain articles or books, or watching certain videos, or working on a specific task.

Do it informally and do it often. Formal evaluations are scary and make your team afraid of you. Because of the amount of work involved, they also happen too infrequently to be of good value. Informal discussions following the format above build trust and help motivate your team. Plus they give you a much quicker read on the talent and potential of your current players so that it is easier to spot new, better talent when it comes along.

Combine these conversations with a kick-ass continual training program and you will see the progress before your very eyes.

-Phil Wrzesinski
www.PhilsForum.com

PS There are many who might disagree with this procedure. There are valid arguments for a formal evaluation process. If you are a small business with only a handful of employees, however, a formal evaluation process could be (or at least feel) overwhelming. Your true goal for evaluating your staff is to see where they are and motivate them toward the ultimate goal of being the best at serving your customers. Daniel H. Pink in his book “Drive” points to three things that intrinsically motivate your staff—Autonomy, Mastery, and Purpose. A simple measuring stick of growth compared to where you were previously is Mastery, but a map of where you are in relation to where you want to go is Mastery and Purpose.

Working “On” Part 4 – The Game Plan

When my dad retired in 2005 his biggest concern for me was what was my plan. He’s a football fan just like I am. We’ve heard coaches time and time again talk about their Game Plan for beating their opponent. We had a new opponent that had just opened in Jackson named Walmart. How was I going to beat them?

The newspaper had asked me a similar question when Walmart announced the opening of their super center in Jackson. “How will you compete with them?”

Phil Wrzesinski ringing birthday bell
Phil Wrzesinski rings the Birthday Bell at Toy House on 11-11-11

My answer to both was the pretty much the same. “We have over five times the selection of toys as Walmart and several services they don’t offer, not to mention the smartest staff in town. The better question is, How are they going to compete with us?”

Sure there was some hubris involved. You can be a little confident when you do have a plan.

Our Game Plan was simple.

  • Increase our levels of customer service.
  • Offer more in-store activities and events.
  • Create more memorable moments.
  • Set up more demonstrations and hands-on displays.
  • Write more powerful messages for our advertising and marketing.

We were going to take our competitive strengths and put them on steroids.

Even with Walmart opening that summer, in 2005 we had our largest Christmas season ever. Two years later we surpassed every record in top line sales. 2008 was looking to be another record-breaker, only falling short at the last moment. (I think the housing bubble burst had something to do with that.) 2009 was the most profitable year in the 60-year history of the store. Even when we decided to close seven years later, our share of our shrinking market was still holding steady, even with Amazon’s growth into toys.

The key to a successful Game Plan is two-fold.

First you have to get the strategic part right. I knew we couldn’t compete with Walmart on price. I also knew they couldn’t compete with me on service. If a football team has a great player no one can tackle, you keep feeding him the ball until they stop him. I was going to keep improving my customer service and in-store experience until no one could match it.

Second, you have to have concrete steps to achieve each point of your strategy. I created year-long training schedules to transform my staff, focusing on small, incremental improvements each month to reach our goals of better engagement with customers and better selling skills. As a team we evaluated our current event offerings and came up with new ideas to make sure we had something special going on every month. My buyers were instructed to look for more toy demo options from our vendors.

Believe it our not but our Birthday Bell—one of our customer’s favorite activities—didn’t come into existence until 2010 as we were trying to come up with ways to offer more memorable moments. (Nostalgia is one of our Core Values.) That bell is now at a local museum.

Here are the steps you need to take to develop your Game Plan.

  • Identify your Core Values. The most effective Game Plans must fit within and accentuate your Core Values. If they don’t, they won’t last.
  • Evaluate both yours and your competitors’ strengths and weaknesses. Be brutally honest. Figure out where you have the competitive advantage and where you don’t. Highlight and exploit where you are already better and concede (or at least don’t waste valuable resources) on the areas where you cannot win.
  • Develop concrete actions you can take to increase your competitive advantage that also fits within your Core Values.
  • Play the long game. If you already own the competitive advantage in an area of your business, growing it slowly and incrementally helps your gains stick better with your staff and customers. Every bit of growth is positive, no matter how small because everything you do builds on what you have already done.

Having a Game Plan gives you two other benefits.

First, it makes working “on” your business easy. You have the blueprint right in front of you at all times. You have your marching orders for what to do next. Your Game Plan determines the kind of people you hire and the kind of services you offer. It guides your decisions and makes those decisions easier. You even have the tools for measuring your progress.

Second, it keeps you from chasing after every new fad that comes down the pike. You and I both know how often we get bombarded by some salesperson with the “next great thing” that will transform retail. When you have a solid Game Plan you can determine much more easily if the next new fad fits for you or doesn’t. You can also see whether it will affect your competitive advantage or not.

Any coach can tell you that talent alone doesn’t win games. It takes a solid Game Plan that plays up your competitive advantage and solid execution of that Plan to seize the day. If you want to win in retail you need to schedule part of every week for working on your Game Plan.

-Phil Wrzesinski
www.PhilsForum.com

PS If you don’t have a competitive advantage, then you need a major disruption. You need to do something huge and wild and spectacular that sets you apart from your competition. Offer a brand new service no one else would ever think of doing (like Amazon did with drone delivery). Change up your product selection to get into a niche no one else is touching. Think of it as the trick play in football. No one saw it coming. Then build on the momentum it gives you.

PPS Not sure where your strengths and weaknesses lie? Check with your local business agencies. Some of them offer SWOT analysis (strengths, weaknesses, opportunities, threats) at low or no cost. Sometimes an extra set of eyes is all you need to see what you missed.