Can One Blue Shirt Kill a $40 Billion Company?

By virtually all objective measures, Sears Holdings (SLHD) has been on a downhill slide since the day the $40 billion combined Sears/K-Mart company was formed. If a recent customer service experience with one guy in a blue shirt is any indication, that slide might end in quicksand.

When our washing machine died last week, my wife went to Sears, prepared to buy immediately. Old school? Yes -- but it's convenient, there was a big sale, and we've always been happy with the appliances we've bought there (the company still commands about 30% market share in major appliances). If nothing else, we try to be loyal customers.

My wife encountered a variety of bored-looking "blue shirts," pacing around, looking at the floor, until she finally found one who looked semi-willing to help her. As with any significant purchase, my wife had lots of questions, which the associate didn't seem eager -- or able -- to answer. Inevitably, the salesman said (are you ready for this?):

"You know, you can probably get all the information you need on the Internet."
A ready buyer sent right out the door, just like that. No sale, a bitter customer, bad word of mouth -- a customer disservice hat trick.

Incredulous, or perhaps nostalgically attached to a once-great retailer (or maybe just a glutton for punishment), the next day I stopped into another Sears store, just down the road. Sure enough, I was avoided by a similar phalanx of ambivalent floor folks. But then the story took a dramatic turn, in the form of a lone associate who smiled, looked me in the eye, and asked if he could help. When I asked about his familiarity with washers, he proudly said:

"Well, I've got 23 years of experience, I'll bet I can help... what can I do for you?"
He truly knew his stuff, and shared it with more patience and enthusiasm than you'd think an appliance would merit. So much so that not only did I buy a better/more expensive washer than I had planned to, but I bought an unplanned matching dryer too. In my mind, I was buying from this great employee, not from Sears. He earned it.

Maybe it was a fluke... but if the company's reputation of late is any indication, probably not. More likely the great salesman was the fluke. With hundreds of stores and thousands of employees, it doesn't take a statistical genius to determine the likely virulence of this gloomy service disease.

Sears Holdings' annual report devotes five pages -- 2600 words -- to "Risk Factors," including everything from inventory levels, to the economy, to global geopolitics. By my count, the phrase "customer service" appears only once. This is the typical 30,000-foot view of a massive public company with millions of moving parts, and it is feckless and self-destructive.

Is it too late for a ship this big to be turned around? It might be. But unless it wants to go down without a fight, Sears would do well to filter out all the noise, and laser focus on the one resource that has the most immediate and dramatic impact on any business: People. Whether you're a $40 billion conglomerate or a small family operation, your basic approach to people should be the same:

  • Hire, train, and retain for attitude: Skills can be taught, attitude can't. Employ people with positive, infectiously enthusiastic attitudes. All other things being equal, an enthusiastic employee in a dowdy store will always outperform a sourpuss in the fanciest digs.
  • Kill disease before it spreads: remember that lousy attitudes (zombies wandering the sales floor) are just as infectious as good ones, if not more. Get rid of bad apples immediately.
  • Educate, empower, and reward: The guy who told my wife to research on the internet might as well have said "shop somewhere else." No matter what your business, make sure your employees are superbly informed about what they are doing or selling, and given all the tools and authority they need to take great care of people. "Aggressively" and publicly recognize and reward great performance.
  • Create and nurture a culture of happiness: Happiness is the ultimate goal of every human being, and should be a top priority of every business. Cultivate happiness and nearly everything else will take care of itself: Happy employees make for happy customers, and happy customers make for a happy, successful business. Simplistic, but true. Read this book.
What effective "people practices" do you use in your business? What have you seen work (or fail miserably) in others? Please share.

Flickr photo courtesy of justj0000lie, CC 2.0

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