Retail first-line management and strategy, a successful formula or an unworkable recipe?

Guest blogger:

Tamim Elbasha, Research student in the Centre for Strategy and Marketing at The Open University Business School. Tamim was originally trained as an optician, with over 10 years of experience in the optical-retail industry gained in the Middle East and the UK. 

After a few decades of researching strategy, we still know very little about how first-line managers understand and cope with strategic directions.

Who are these managers you are talking about?

First-line managers (FLMs) are managers who practice mainly business-related skills rather than doing a functional job. They do budgeting, reporting, recruiting, implementing policies etc. Their position denotes usually the first step in the management ladder.

If they are at the bottom of the managerial pyramid, why should we be interested in how they understand strategy?

Well, many Western economies have shifted swiftly from being product-based to service and knowledge-based. This shift has brought with it a flatter organisational structure, which means that organisations in many industries have huge number of FLMs and few middle managers. High street retailers and restaurant chains are good examples, where branch managers are the FLMs.

The branch manager is typically responsible for delivering services and products to customers. They are the only ‘managers’ known to customers and, sometimes, even to employees. Think about the last time you had trouble returning or exchanging something, who did you ask to speak to? Who did the employee speak to, their branch manager or their regional manager?

Aren’t these managers paid to do what the boss is asking them to do?

Sure. But what they consider to be a strategic direction has a great impact on what they do inside their stores. They decide on how and what to communicate to their staff, the in-store work atmosphere, and how customers are actually treated in their stores.

I see where you are coming from, but this has nothing to do with strategy.

Not quite. All these ambitious strategies are drawn up at the head office and usually announced in big events. However, implementing these strategies is usually done on the shop floor. FLMs are the people who translate these strategies to day-to-day work so staff can get on with the details. This ‘translation’ usually involves the FLMs’ understanding of the strategy in the first place, especially when FLMs are left to fill in many nitty-gritty details. Indeed, my on-going research suggests that FLMs’ understanding of ‘what is strategy’ does influence how they respond to new directions from the head office and how they plan the day-to-day work in their stores.

Right, so organisations should bother about what influence FLMs’ understanding then?

Yes. This is particularly important in recessions. High street retailers want their branch managers to capitalise on their locale yet maintain universal standards and procedures which form an important part of the retailer’s culture and public image. Each of these stores is located in a different place, and FLMs need to be mindful of their local environment. The tactics implemented in a big shopping centre in London with high staff turnover, many close competitors and cash-rich clientele are rightly different to those implemented in a small town centre in a rural area.

Get real! With this line of argument FLMs should be given the reins and they will run wild!

Well, you will be disappointed then to know that they do have some control already! Retail FLMs are the people on the shop floor, they face and talk to the customers, they drive the sales, and they train and organise their staff. For better or worse, all policies, procedures and targets are flavoured with the FLMs’ views of what is important for the future of the business. I strongly believe that we must understand what could influence these views. But maybe the real practical dilemma comes afterwards- if you knew what influences your junior managers’ view of strategy, what would you do? Would you try and alter their view?

P.S. I have always enjoyed reading Tim Harford’s column in the Financial Times, and I have shamelessly copied his style in writing this blog.