For a large retail organization with stores across the United States, ensuring the right goods are shipped to the right store just in time to meet anticipated customer demand is critical. Ship too few of a particular item and sales are lost. Too many and they will sit unsold, taking up valuable shelf space and requiring expensive reshipment or markdown. Add the reality of variable demand between stores, and there is a strong likelihood that items can be sold out in one store while sitting unsold on the shelves of another store in a different part of the country. Demand can be so fickle!
The number of variables to be considered when matching the right inventory to the right stores is daunting. Think about seasonal variations in weather, annual clothing style changes, inventory levels in warehouses and stores, past customer demand, local events, store events such as sales, and even weather variations that influence customer behavior. It’s truly a multifaceted, complex calculation, but one that must be solved every week for thousands of line items. If solved correctly, both the customers and the stores profit. If not, both fall short. That complicated situation, of course, sits squarely on the shoulders of a group of performers with odd-sounding titles like allocation specialists or inventory managers or even shipping analysts.
In one organization, new employees spent the better part of a week simply learning the mathematical formula developed to solve this challenge. The variables to be inputted, how to determine the proper values for those variables, and how to wrestle with the unknowns in the equation to make the best predictions possible were all part of the training process.
So when we studied this critical role, imagine our surprise at what we did not see: top performers actually using the mathematical equation they had spent so much time learning. Oh, they used the principles behind the equation, but not the actual plug-and-chug part of the equation. Instead they combined an understanding of the underlying principles with an entirely unexpected set of additional factors to help them make even more accurate predictions than the formula alone would produce.
Observing the top performers in action and documenting both their mental models and the specific tasks they performed paid considerable dividends for the company. Significantly reduced training time, faster ramp-up time, and higher performance by both new hires and existing employees all combined to reduce costs and, more importantly, improve the employees’ ability to satisfy customer demand and maximize sales results. All because the top performers had a different and more effective model for how to perform the job.
Question to ponder:
What are your organization’s key business results, and what are the critical roles most responsible to produce them?
Originally Published on October 14, 2015 |