You Cannot Fix an Average

Look past top line averages to reveal store level performance.

Everything seems fine. It looks good on the report you look at every Monday morning (or Sunday if we're being really honest). Sales at 98 percent of plan. A couple of metrics at 101, 105. One or two might be a little soft, but nothing alarming and no one is asking about it. Most of the boxes are green. You take a breath and think, we are doing pretty well. A little push and we can be leading the way. Then you move on to the rest of your week.

Does this sound familiar? It might even sound like a really good situation. (Seems like I might be setting something up here…)

I have been in this situation. Most multi-unit leaders have. And it is one of the easiest traps in retail to fall into, because nothing about that scorecard is wrong. It is almost like that feeling right after a really good store visit. You get a chance to breathe, the store is looking good. You feel like you're in a good spot. The numbers are accurate. The problem is that the number is an average, and you cannot fix an average.

Wait, what? What does that even mean?

Reporting got prettier. It cannot hide the ugly.

Scorecards and reporting have been around forever. Over the years they have gotten more sophisticated and so much better looking. Dashboards, color coding, trend arrows, all of it. And with AI entering the picture you can get more data and make it look prettier, quickly.

But the information hidden underneath the surface has not really changed. If anything, making reports look good has made it easier to get complacent. A green box feels good. Maybe it is, but understand that at the district level, it is a summary, and a summary is built by blending things together. Blending has a tendency to hide problems that are just beginning.

You can know in your gut that there is real opportunity out there. You can know your team is muscling through and working hard to keep the numbers up. And you can still look at a green scorecard and let yourself off the hook, because the top line says you are close. Plus, the thought of what it takes to dig in further is exhausting and you already have a million other things you're trying to keep track of.

Again, sound familiar?

A quick word about "focus"

I am not a fan of the word focus, and I have written about this before. Why? When a leader says "I need to focus on that," the needle usually does move in that area. But something else drops. So now they need to "focus" over there. Then the first thing slides back. Let the whack-a-mole game begin.

A lot of it comes from chasing the reporting instead of managing the information underneath the reporting. You end up looking at the averages instead of managing the business. And there is a lot below the surface that will tell you what is actually going on, if you just look.

Two districts, same 98 percent

Say you are a regional manager and you have two districts in front of you. Both are at 98 percent of plan. On paper they look identical, and you feel about the same way toward both of them. Now look one level down.

District A has 15 stores. Thirteen of the fifteen are within striking distance. A handful sit at 95, 96, 97 percent. A few are at 100, 101, 102. There is no big spread. Everybody is close, and the district average is being built by a group of stores that are all more or less doing their job.

District B has 16 stores. Six of them are in the low 90s. One is at 85 percent. Then there is a cluster around 97. And there are three or four stores running 106, 107, 108 percent that are carrying everybody else up to that acceptable, but not quite there, 98 percent.

Same average. Essentially the same size district. But the story below the top line is very different.

What each one should actually do

Digging in and reading it differently will tell another tale. But the ending only changes if you act on the information and change what you do. 98 percent is close, but it is not plan. Even if the numbers used to be worse, they still at the expected level.

In District A, the district manager should look at that spread and think, I am close everywhere. Where is my fastest path over plan? Probably two stores with the biggest upside. They are at 98 and they should be at 101 or 102. If most district managers are honest with themselves, they already know which two stores those are and they already have a pretty good idea what needs to happen there.

So go do it. Give those two stores some extra time and attention over the next couple of weeks. Help guide those leaders and get them where they should be and the whole district goes over plan.

In District B, the first job is to stop making the excuses. You know the ones. A competitor opened up and we did not plan for it. There is road construction. We have been struggling with that manager and I need the store manager to performance manage them out. Every one of those may be true, but what is the action that needs to happen. If nothing changes, everything stays the same.

If the store manager needs to performance manage someone who is dragging the store down and it is not happening, then it may be time to have the performance management conversation with the store manager. If it is competitive pressure, then go find out what is actually in your control. Is the service outstanding? Do we have pricing issues? Are we out of stock on key items? Those are things you can raise with your regional manager or your corporate partners.

And then go spend time in the store. Observe the customer experience yourself. Go visit the new competitor and see what they do better and what you honestly like about their store. Look at your own store through a customer's eyes. If you have customer survey data, dig into it. If you don't, go read what people are saying on Google or Yelp. Get enough information to start forming a real opinion about what is happening in that building.

You may not get an 85 percent store to 100 by the end of the year. But if you get it to 94 or 95, that takes an enormous amount of pressure off every other store in the district.

The measure I would build into every scorecard

Do not score a district only on the district number. Score it on how many of its stores are achieving expectation. The blended number tells you what happened. The count of stores at plan tells you what is happening. Those are different questions, and the second one is the real measure of a multi-unit leader.

Ten of fifteen stores at plan is a different business than five of fifteen at plan, even when both districts land on the same percentage to plan overall. One of those leaders has a broad, healthy operation. The other has a few strong stores covering for a group that is falling behind and not getting noticed. Looking only at your top performers will not show you this. Neither will looking only at your bottom performers. You have to look at the whole group.

Where this leads

Curiosity should start to kick in when you look at an individual store versus the average overall. Why is that store at 85? What are those three stores at 107 doing that nobody else is doing? Am I missing anything or assuming too much? What is in these low 90s stores that I have overlooked?

That curiosity is the start of the real work. Because once you can see which stores are actually driving your number, the next question is necessary: where do I need to spend my time? And the answer can't be "everywhere" or "I like to spread out my visits evenly."

This is where we are headed next. Over the next three articles I am going to walk you through a district of my own that was sitting well below plan, and what changed when I stopped managing the average. Part 1 covers how I found the stores that were actually driving the miss. Part 2 covers how I changed where my time went. Part 3 covers what happened to the people and to the numbers.

For now, do one thing. Pull up your reports and don’t read the total. Count how many of your stores are hitting expectation and how many are not. That number is your real scorecard.

Have you found yourself managing the average? How have you moved the needle differently in your experience?

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