December 07, 2015

Team Chemistry

My hypothesis on how business works continually evolves, as should yours.

It is obvious that Merchandise Productivity is critically important. We all know this to be true. You won't read about the topic anywhere, because it is hard for vendors to make money selling solutions when your business is working better because customers like your merchandise.

It is obvious that companies that do not have to pay for advertising to generate orders outperform those who must advertise to generate orders. Macy's spends $1.6 billion a year on advertising. When I worked at Nordstrom, we spent less than $0.2 billion. Needless to say, Nordstrom prints money, Macy's doesn't. The secret to any successful business is to find ways to get customers to love merchandise without having to advertise.

An ongoing theme on this blog is Customer Acquisition. It's the story of 2016-2020 ... and you agree, based on the fact that more than 4,200 views of my draft presentation in March have been generated (click here).

In the next week, you will learn about the importance of rapidly moving a customer from 1x to 2x to 3x+ status ... that's where a ton of profit volume is generated.

But when does anybody talk about teamwork/chemistry?

When I worked at Nordstrom, there was a staffer in the information technology department. This person didn't think much of the work my team did. This person acted like an in-house consultant, actively seeking project work outside of the typical information technology job description. This person was fully supported by the department head. Needless to say, my team did not respond kindly when they had to clean up the mess created by a person not equipped to do advanced analytical work. Worse, my team would chew me out ... "MAKE SURE THAT PERSON STOPS DOING OUR WORK, YOU ARE A VP, YOU SHOULD BE ABLE TO TAKE THAT PERSON OUT TO THE WOODSHED!" But there wasn't a thing I could do to stop this. If the individual and the department head wanted to constantly step into our swim lane, they were going to constantly step into our swim lane, period.

The result was terrible team chemistry. My team did not trust the information technology team. The information technology team clearly thought my team were comprised of a band of idiots. Few conversations happened outside of joint meetings. Nobody went out to lunch together. Nobody went out on Friday night together. In fact, on one lonely afternoon, one member of my team and one member of the information technology team nearly came to blows in my office - screaming unkind words at each other in my office.

I rarely run across a company that has great team chemistry. Here's what is common:

  • Analysts don't like other analysts.
  • Executives compete against each other for promotional and/or leadership opportunities.
  • Directors beat up other Directors.
  • Online folks think catalog folks are idiots.
  • Catalog folks disrespect online folks.
  • Retail folks have different work processes than online team members.
  • Merchants dislike marketers.
  • Finance leaders dislike marketers and creatives.
  • Creatives dislike marketers.
  • Information technology folks dislike marketers.
  • Marketers don't like bean counting financial leaders.
  • Operations staffers who feel like they can do every job better than the folks who do the actual work.
  • Inventory staffers who have contempt for merchandising, creative, and marketing, and vice versa!
I can think of one (1) company that I have worked, one company where team chemistry was high. One. Team chemistry starts at the top at this company. Employees are given disproportionate responsibility, given their experience levels. The end result is unfettered business success.

If you had to evaluate your company on a scale of 1-10, where 1 = employees who want to punch each other, and 10 = true team chemistry, what score would you give your company?

There are four key areas that my research suggests lead to business success.
  • Customer Acquisition Strategy.
  • Minimal Tolls (low ad-cost).
  • Merchandise Productivity.
  • Team Chemistry.