Thinking About Implementing a Compliance Checklist? Read This First.

Maybe you’re a nonessential retailer cautiously opening pockets of stores across the country. Maybe you’re an essential retailer frantically trying to adjust to this “new normal” while keeping customers and employees safe. No matter which side of the spectrum you’re on, chances are you’re probably thinking about one thing: checklists.

Retailers love checklists. Store audits, visual merchandising inspections, opening checklists, closing checklists, safety checklists, etc. Take a look at any store leadership team’s daily tasks, and you can bet there’s at least one checklist involved.

It’s not surprising. Retailers — especially large ones — often struggle to drive a consistent customer experience across a geographically dispersed fleet of stores. Checklists are a simple, intuitive (and often inexpensive) way to align teams to the same set of standards.

In the wake of COVID-19 store shutdowns, and with new regulations emerging daily, checklists have become more important than ever. Not adhering to precise operating standards now has very real health and safety implications. Therefore, retailers need a way to track and record compliance. However, there’s a huge difference between a store leader properly executing all items outlined on a checklist and … well, just checking them off for the sake of checking them off. The former is going to have a material positive impact on your business; the latter is called “pencil whipping.”

What's Pencil Whipping?

Pencil whipping is “a euphemism used to describe when workers, supervisors, and safety managers fill out observation cards without actually conducting the observation (much less providing the critical feedback),” explains behavioral safety expert Dr. Timothy Ludwig. In layman’s terms: it’s saying you “did the thing” when you actually didn’t.

Pencil whipping isn’t new. It’s plagued companies that manage distributed workforces — in particular, the mining, maintenance, and construction industries — for decades. These industries have always been safety-focused, taking every precaution possible to protect their workers from injury (and insulate their companies from liability). But now that shopping in a brick-and-mortar store is a whole lot riskier than it used to be, it’s time for retailers to take a hard look at how they deploy their checklists and prevent pencil whipping before it starts.

Let’s make one thing clear: your employees mean well. Nobody in retail wants to do a bad job. (We know this, we worked in retail!) Therefore, why does this still happen? What causes front-line retail workers to check boxes when they’re not technically “checked” in real life? Why do well-meaning employees sometimes fudge this human-driven data? We took a look at some of the key reasons why compliance checklists don’t always show the truth, and how you can combat these issues from the start.

Reason No. 1: Lack of Accountability

There are rarely enough hours in a single shift for a store leader to accomplish everything they need to do to keep customers (and corporate) satisfied. As payroll tightens and expectations soar, store teams are forced to do more with less. And this means some tasks may need to be put on the back burner. So, what’s the first thing to fall through the cracks? The stuff your boss doesn’t care about.

Many well-meaning retailers push tasks and checklists down from HQ to individual stores (or even individual store associates), hoping they’ll complete them correctly and on-time. However, these retailers forget a major piece of the puzzle: the upper field. District managers (DM), regional directors, and other multiunit leaders are often “leapfrogged” by traditional HQ to store communication methods (including email newsletters and intranets), and are left in the dark when it comes to what’s expected of their stores.

And if your DM doesn’t know there’s a checklist, chances are you’re not going to bother actually doing the things the checklist says you should do.

That’s why, when rolling out a new compliance checklist, you need to make sure engaging the upper field is part of the plan. Think through how they’ll play a role in holding their teams accountable. Will following up on checklist items be part of an ongoing store visit routine? Or maybe DMs should be the ones to complete the checklist for their stores, like an audit? How will they stay abreast of updates from headquarters? And how will DMs be held accountable for their stores’ performance? By putting this middle tier of your field organization at the forefront of the conversation, you’ll undoubtedly see better compliance — and more accurate data — from the get-go.

Reason No. 2: Checklist Fatigue

Let’s face it: everybody at corporate needs something from stores. Between urgent pullbacks, required training, merchandising moves, vendor visits, and IT upgrades, there’s a lot happening on any given day. Therefore, it’s understandable that teams in the field might feel overwhelmed, and resort to pencil whipping just to get things off their plate.

Many departments in your organization probably already deploy checklists to stores in one form or another. Who is to say which ones take precedence? Without a clear method to prioritize, store teams may see your new compliance checklist as just another piece of paper. And if they’re used to checking boxes without true repercussions, there’s no reason they’ll feel any differently when simply adding another corporate task list to the pile.

So, how do you solve for this? Conduct a checklist audit before deploying anything new. How many other departments are asking teams to use checklists on a daily, weekly, or monthly basis? What do those checklists look like, and how are they audited or accounted for? Determine if there’s any overlap or opportunity to consolidate to help cut down on the noise. And then, when it comes time to roll out your new compliance checklist, shout from the rooftops that this is the priority! Which brings us to  ...

Reason No. 3: Lack of Context

If teams don’t (or can’t) understand why they’re being asked to complete a particular task, or fill out a checklist, they’re far less likely to actually do it. It’s not enough to just instruct stores to “do the thing” — you also have to tell them why it’s important so they can allocate the right resources and carry out your instructions with care.

Here’s an example: Let’s say your compliance checklist requires a store leader to confirm that specific signage is posted in the front window, every morning. After checking “yes” a dozen times, your leader may just decide to drop that inspection altogether, thinking they’ve “passed” and that your checklist is now nothing more than a useless reminder.

However, if you give your team a little more context, they might think twice before pencil whipping. Maybe that signage is set to change on a regular basis. Maybe they're at risk for a hefty fine if that sign isn’t in the proper place. Maybe there’s been a global issue with signs becoming faded or damaged. Or maybe corporate simply needs proper sign-off to protect themselves from certain liabilities. Whatever the reason, giving your fleet the “why” helps them understand how their work ladders up to a broader brand goal. If nothing else, explain that this checklist isn’t just a reminder — it’s actual data. And that data needs to be collected so that your company can ultimately make better business decisions.

Reason No. 4: Misplaced Incentives

Incentives are common in retail, and for good reason. Store manager pay and bonus structure is always top-of-mind at HQ. After all, if you want tasks completed correctly and on-time, there’s no better way than to tack on an incentive. (SPIFFS, anyone?) But incentive plans have to be relevant. They need to be designed to drive desired behavior and discourage undesired behavior. And that’s harder than it sounds.

Bonuses and other incentives can be extremely powerful, but they only work if they support your organization’s strategic goals. Think about it: If employees get incentives for having perfect attendance, they come to work with the flu instead of staying home to get well and avoid spreading it to anyone else. In other words, you get what you pay for.

Too often, incentives around compliance checklists focus on quantity and not quality. If you’re rewarding teams for completing their checklist every day, you’re simply rewarding them for checking boxes and, in turn, encouraging them to pencil whip. Instead, try rewarding the intended outcomes of your compliance checklist. Conduct random audits and reward teams for exhibiting adherence to your standards. Or pinpoint stores that took swift action to remedy noncompliance and reward them for their efforts. By rewarding behaviors — not checked boxes — you’re more likely to see the results you’re looking for.

Ultimately, How You Communicate Matters

When all is said and done, creating a culture of accountability and driving compliance in stores isn’t as simple as deploying a checklist and walking away. How you send that ask down to your teams, how you keep upper field leaders informed, the amount of context you provide, and the way you incentivize your employees all play a role in the battle against pencil whipping.

Emily Lane is a product evangelist at Retail Zipline, working with customers and prospects to drive store execution and engagement through better communication.