The regional manager crisis!

I love starbucks. I work from there probably once every other week.

Starbucks is set up like a lot of chain restaurants and businesses. They have their baristas, shift supervisors, asst. managers, store managers, regional managers, district managers, and then...

The use of regional managers in chain businesses can be hit or miss. It adds another layer of supervision and accountability in a larger organization. But it adds a troubled mix of communication.

The regional manager is in charge of oversight of a couple of stores. They are supervised either by a district manager or a corporate executive. The executives make decisions, put policy in place, come up with sales strategies, and brand management.

There are a lot of ways to evaluate a store. Profitability, growth, potential, etc. From a pure numbers standpoint, regional managers can seriously hinder a local store. A regional manger shows his supervisor the numbers (yeah for spreadsheets). The supervisor says, get your stores to sell more (fill in the blank) to increase profits.

Regional manager tells general manager the same who tells asst. manager, who tells front line employee to sell more (fill in the blank).

They try to sell. And the numbers flow back up. Quarterly review is up and store did not meet regional manager's supervisor's expectations.

Do you see where I am going? A regional manager adds a layer of salary and their validity is based on numbers of a set of stores. If the stores under perform the regional manager's job is on the line. Who then pressures the store manager, who pressures the front line low wage employee. Phew!

The problem is the original message, sales strategy, and sales projection is passed down through a filter. The store manager and front line employee has very little say in the process. A great idea in a corporate boardroom may be a horrible idea to a store manager. The store manager does not have the tools to implement the plan or it is a really bad plan.

Take via instant starbucks coffee. A great product.

If I walk into the starbucks looking for a cup of joe, why would I want to buy via? I am there to buy a warm cup of coffee or handcrafted beverage. Not instant coffee. Yet, the barista is charged to sell more via to increase the profitability of the store. The barista is charge with developing the face-to-face day-to-day most important relationship. They are not going to upsell a regular with a product the regular (whom they may know intimately) does not want nor need.

So the numbers come up and the quarterly review says this store undersold their projections they had no say in and did not feel was the best way to increase profits.. phew.

Again. Too many steps in a corporation between decision makers and implementation with too little two-way communication yields lower productivity.

Any franchising/chain company rolling out a lot of regional managers need to rethink their process. Regional managers are expensive. If they took a regional managers salary and gave the store manager a bit more plus a percentage of sales- you might find super highly productive store managers who increase profitability. If the store manager is waiting for the next memo from corporate to understand what they are supposed to do, it decreases the brand and message to the customer.

The same thing with nationwide promotions. Like free cup of coffee if you bring in a reusable cup to starbucks day. Horrible idea. It is devaluing your brand and bringing in one time customers who will not become starbucks regulars. And it unnecessarily stresses out the employees while devaluing the starbucks experience. Phew. Again.

Figure out what your message is. Cut down communicating to ensure each employee, especially the face-to-face front line employees, understand your story, message, and brand. Then give decision making abilities to those in position to enact change quickly. A neighborhood store has a huge ability to change! Yet, a corporate run business may severely limit that ability. It does provide consistency (that is part of why I love starbucks, they are the same everywhere) in product. BUT limits profitability in the long run.

Regional managers cause an undue level of sales pressure at to great of a salary cost. Give greater responsibility (and higher pay) to local managers and communicate directly with decision makers. That increases investment in the company, increases quality of managers, and increases the amount of solid communication that hits the frontline employee.

What if every chain style business had an MBA requirement for store managers? And pay to match? Do you think the profitability and viability of your company would increase?