Leadership Tips From Top Retail Execs

The National Retail Federation's Annual Convention & Expo wrapped up yesterday with a roundtable discussion on leadership. Lending their expert advice were seasoned retail leaders Stephen Sadove, chairman and CEO of Saks, who moderated the discussion; Marty Albertson, chairman of Guitar Center; Brian Devine, chairman of PETCO; Angela Ahrendts, CEO of Burberry; and Brenda Malloy, managing director and global retail practice leader, Russell Reynolds Associates.

The discussion focused on the panelists' views on the following topics: leadership philosophy; how to develop a culture within a company; and how to communicate within your company. Here's a look at their thoughts on each of these topics.

Leadership Philosphy
Ahrendts: The goal at Burberry was to unite the disparate company — the retailer has stores and employees all over the world — around a single brand vision. Ahrendts' mantra has been to work for a higher purpose — the brand. She also noted that people work for people, not corporations. Therefore, you need to build trust around a human factor. Ahrendts cited a quote from retired football coach Tony Dungy that she's taken to heart: When you make ordinary people connect, extraordinary things can happen.

Albertson: You need conviction to lead. When gathering and processing information from your team, you need to have conviction around the data to implement a clear vision. The next steps in this process are to have the courage to take risks with capital and human capital and the integrity to stay commited to your conviction and courage. If your primary job is to lead people, they deserve candor. Don't get soft on people if they're not performing.

Devine: Empower your employees to push back. Tell them your goals then ask them how they'll help you to achieve them. Allow people to fail and learn from their mistakes. Other individuals' success should be your top priority; their success will enable your success.

One tip around this that Devine has implemented at PETCO is to have others talk first at board meetings. This prevents their opinions from being swayed by his. Devine also advises always telling the truth. Doing so will enable your employees to always believe in you.

Culture
Albertson: The culture at Guitar Center that's evolved over time is competitiveness. Albertson wants his employees to have the attitude that they're going to beat somebody every day. At Guitar Center there's competition among salespeople, stores and corporate management. This competition has helped develop a team culture and energy for the brand.

Devine: There was a great culture already in place when I arrived at PETCO, Devine said. Employees cared first and foremost about animals, which in turn led to happy customers. Strengthening this culture through the establishment of the PETCO Foundation, a charitable foundtaion designed to help animal welfare organizations, is one of Devine's accomplishments that he's most proud of. The foundation funded one year of merchandise and supplies for rescue dogs following the Sept. 11, 2001 attacks, as well as helping to rescue animals from New Orleans during Hurricane Katrina. This all fits into the company's culture of healthier pets, happier people, better world.

Ahrendts: Burberry wasn't a democratic organization when Ahrendts took over as CEO — less than 10 percent of the company's employees were eligible for bonuses and less than 5 percent owned shares of the company's stock. Ahrendts set a goal to create a democratic compensation program where within five years 100 percent of the brand's employees were enrolled in the bonus program and owned shares of Burberry's stock. The goal was reached within four years. Burberry's employee turnover rate has decreased 80 percent as a result.

Similarly to PETCO, Burberry has established a charitable organization under Ahrendts' watch. The Burberry Foundation is dedicated to helping young people realize their dreams and potential through the power of their creativity. Burberry's employees volunteer their time and are recognized internally for their efforts.

Malloy: Hire for skill, fire for fit, said the retail executive recruiter. A candidate must understand the culture of the company in order for them to be the right fit. Past behavior is the best predictor of future behavior.

Sadove: Establish the strategic direction of the brand first, then establish, implement and monitor the culture at your company.

When questioned by Sadove how they measure the adoption of culture within their organization, Albertson cited Guitar Center's tracking of its employee turnover rate as a good indicator of whether the brand's employees are invested in the culture. Devine said PETCO uses tools such as surveys to monitor its organizational culture, while Burberry intuitively measures the energy you feel when you walk into one of its stores or offices, Ahrendts said.

Communication
Albertson: Guitar Center hosts large group meetings a couple times a year, Albertson said. It generally practices a pass-down communication strategy, where senior management stresses the company's values to store managers, who then pass along that information to store associates.

Devine: PETCO hosts small groups of corporate employees for off-campus events a couple times during the year. At these events they rate themselves on a variety of areas related to the business, then identify five or so areas to improve upon. These points are then brought to larger groups of employees for their input.

Ahrendts: Burberry takes advantage of technology to communicate internally and externally. Social media isn't just for customers, Ahrendts said. Chances are that your employees are on these social networks (e.g., Facebook, Twitter) and have electronic devices (e.g., smartphones, tablets), so take advantage of that fact and communicate with them through these channels. And don't just communicate with your customers and employees. Maintain open lines of communication with your investors and suppliers as well.

Sadove: You can't overcommunicate. Saks has a "Straight Talk With Steve" campaign, where Sadove tapes a video each week via a webcam in his office that's distrubuted to Saks' employees. The video updates employees on what's going on with the company.