Earlier this year Tom Duma, co-owner of Thom Duma Fine Jewelers in Warren, Ohio, created a leadership team made up of his sales, inventory, and financial managers. Duma decided to form the team to stay on top of the store’s most essential departments and key performance numbers each department represents.
The leadership team meets every Monday morning for two hours to review the current numbers on sales, profit margin, sales associate hourly sales results, inventory turn, GMROI (Gross Margin Return on Inventory Investment), and age of inventory.
The financial manager collects all the data from the store’s POS system for the weekly meetings. The first hour is dedicated to examining four spread sheets, namely cash flow, inventory, sales-per-category performance, and sales performance for each employee.
In the second hour, the team identifies and develops strategies to accomplish the top 5 goals for those areas and how to work toward accomplishing and executing these plans, such as addressing issues with aging inventory, increasing sales per category, and increasing sales per employee.
When examining data provided by the financial manager on nonperforming inventory, for example, the leadership team can identify reasons for the rise in aged inventory. The inventory manager then identifies the items, marks them, and comes up with a sales incentive (e.g., a 10 percent commission). Then the sales manager communicates with the sales team about the incentive and gets them motivated to sell.
The leadership team started meeting in January. As with any new process, the team members became more comfortable with the meetings as time went by. “Iron sharpens iron and I encourage each leader to challenge the other in their systems and programs,” says Duma. “Can they do it better? Why do you do it that way? And as a result of spending two hours each week together we are always staying focused on our task.”
By summer, Duma knew that creating the leadership team was a good strategy, having seen growth in sales, increased productivity with the staff, a more unified team, improved systems and procedures, and better communication.
Communication is key in taking the leadership team’s message to the rest of the staff via daily staff meetings. Each day, one member of the leadership team members runs a staff meeting. Generally, the sales manager will speak about sales techniques or product information as well offer the daily mantra of keeping the sales target in front of the team and praise the previous day’s sales leader.
The inventory manager talks one morning on new incentives on aged inventory or reinforces the need to show nonperforming inventory. The financial manager takes one meeting and reviews policies and procedures. And one day a week a sales associate takes charge.
And as store owner, Duma will address larger store goals and talk about the “six Ps.” “Product, price, place, promotion, process, and people,” says Duma. “Those six words are the basis of our business and drive everything we do.”
In addition to the leadership team’s weekly meetings, every 90 days they hold a strategic planning meeting offsite for eight hours. Team leaders identify the five top goals for their departments and develop timelines and action plans to achieve those goals.
In the 10 months since the leadership team has been meeting, Duma has noticed big differences in his store’s operation. “We’re simply more focused,” says Duma. “In the past I used to look at my P&L once a quarter when my accountant gave it to me. With so much data coming from the technology used to manage operations, we have more information than ever before at our fingertips each day. Why not use it?”
The leadership team: Jeff Briceland, sales manager; Lynn Capezio, inventory and merchandise manager; and Jim Donadio, financial manager