In my twenty-something years in loss prevention I have seen my share of “shrink action” plans. In theory, they are a vital part of the loss reduction equation. In practice, however, they often amount to “things that sound good,” but for a variety of reasons have no impact. It’s not that the plans themselves are “bad.” Even the poorly designed plans have good intentions and can momentarily create a focus on the issues. The issue with non-functional shrink action plans is that they are more fluff than functional. Sometime it’s not so easy to see because on the surface it intuitively seems like the correct list of actions. The problem only shows up the day after the plan, when those responsible realize they have a plan designed around the “right” attitude, but little that attends to the “right” actions.
It’s not necessarily about changing the categories of our shrink action plan. It’s mostly about taking those categories to a place where we can ensure three things:
The actions match the analysis - every shrink action plan attends to our three categories of loss, errors, shoplifting and employee theft. The trick is to ensure that the majority of actions are aligned with the category that’s causing the majority of the loss. Writing an action book plan on “compliance” isn’t going to help the location execute strategies for reducing shoplifting. Likewise why place a lot effort into shoplift reduction when most of the staff is stealing? The point is that an effective plan requires a clear and honest understanding of the issues that lead to the losses. If it’s performance issues or turn-over then those are the things we need to address.
The actions are actionable - sometimes we can identify the problem, but we fail to plan actions that will correct the issue. In other words, we get halfway there and then fall back on a “hope and pray” plan for improvement. This is where the real fluff usually shows up. For example, a location has a shoplifting problem so our action point becomes, “Practice good customer service.” It sounds good in theory but in practice how is that any different than what we did last year? Chances are the location won’t know how to do things any different than they done. If they did, well we wouldn’t be writing an action plan. The action isn’t “practice good customer service” that is our goal. The action is this case is “Greet Every Customer within ten seconds or ten feet.” That is an action that employees can do. This process is repeated for every “idea” we put on the plan. To work we have to be willing to challenge the “good intention” suggestions.
If you can’t measure it don’t bother - The final step to removing the fluff is measurement. If the only measurement of the actions comes at inventory time then your plan is fluffy. A good action can be measured to ensure that 1.) it’s being executed and 2.) that it is working. Measurement tools are a critical component. We have many at our disposal. We can audit, we can observe and we can look at short term results. We can periodically observe associates to see how well they are “greeting every customer.” We can speak to managers to hear if shoplifting is being reduced or deterred. We can look at the known loss log to determine if in fact external theft has decreased.
A final point for the overzealous creators of Shrink Plans. A shrink plan has to be manageable and executable. In a retail environment that means it needs to be direct, easy and quick. Multiple paragraphs with dozens of requirements will work in theory, but it will never be followed in practice. People will quickly concede that they can’t do it all and won’t do any of it. So simple is better. Three sections Compliance, External and Internal with three bullet points works. I’ve employed this formula repeatedly with target store reductions of thirty to sixty percent.
Our goal with Shrink Action Plans isn’t to write something that “looks” good it’s to create something that “works” well. Resources are scarce enough without spending a day creating a misguided document that doesn’t address the core issues, doesn’t have any real action (just proclamations), and can’t be measured or worse executed. Keep it simple and keep it smart.
Written by Raymond Esposito