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3 Bad Loss Prevention Habits

Posted on 6/11/13 11:00 AM

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Bad HabitsLife without habits would be inefficient. You probably haven’t given thought to “how” to tie your shoes since you were six years old. You can easily back out of your driveway (a complex series of movements) while drinking coffee, checking your email, and singing to your super secret copy of Celine Dion. 40% of our daily activities are done through cognitive remote control. Through a repeated process of Cue-Action-Reward our brains develop a routine that later requires almost no higher brain function to complete. Most often this is a good thing, but sometimes “habits” exist long after the initial reward or purpose has disappeared.

What is true for humans extends to the businesses we operate. Habits and other cognitive short cuts can obscure our focus and create fallacies in our reasoning. These fallacies are often the reason why loss prevention programs don’t achieve maximum results or why some organizations are surprised by periods of high loss. Our old habits simply prevented us from recognizing subtle changes in our operations.

Loss prevention efforts are not immune to the development of bad habits. Sometimes they develop because certain “things” worked in the past. Other times they develop because the initial results were rewarded for alignment with the temporary objectives of a company. While it is necessary that initiatives like “reduce costs,” “improve turnover,” or “increase production” are achieved, an effective loss prevention program needs to continuously evaluate environmental changes (resources, staff matrix, security trends, levels of supervision) and adjust its focus accordingly. In short, today’s “good” habit can become tomorrow’s bad habit simply due to operational changes.

In the prevention of loss, there are three bad habits to avoid.

1. Production over Performance: Obviously there are great benefits to getting things done. Auditing, training, investigations are all critical to successful prevention. The evidence that these tasks work, however, is in the results not in the completion. If the theft log is filled with resolved events that may seem like evidence of “value” but only if there is a positive relationship between those actions and the performance measurement (lower shrink, higher margin, better safety record etc.). A huge case log or a million audits means little if the big things aren’t being achieved. Confusing “effort with performance” is a bad habit because it misses the point of the effort - to get results.

2. The Big Number Game: A great shrink number or improved margins are good reasons to celebrate. Improvements demonstrate that our programs and actions are working. But these numbers, specifically Shrink numbers, are a report card of the past and not a prediction of the future. Things change in business and prevention efforts require adaptation to those changes. Often organizations will delay loss prevention implementations (or cut budgets) because a “good” number was achieved or as I like to say, a policy of “no good deed goes unpunished.” Statements like, “we’re going to wait until the next inventory to decide on changes” or “well the shrink turned out okay this time” are habits that guarantee an environment where loss prevention results cycle between good and bad without any identified reason.

3. Our People Generalizations: The majority of employees are honest and well-meaning. The dishonest ones however are deadly to results. The average dishonest employee steals about ten times that of a shoplifter. The hard truth is that every company employs several dishonest employees. A good and fair estimate is 10% of the employee base. Having never discovered one, some organizations suffer from the Normalcy Bias. It’s the refusal to plan for or react to a crisis because one has never happened before. Staff turns over. Sometimes as much as 100% in a year. While the “culture” may prevent dishonesty, it won’t prevent all dishonesty. “Our People” don’t steal is a comforting yet probably untested and certainly untrue belief. Some of “your people” steal and if you have a habit of not examining the possibility then there is statistically a big and unpleasant surprise in your future.

Good associate habits are the secret to a successful prevention, security and safety program. To create them we line up cues with rewards and implement practices (policy and procedures) that develop into routines. To ensure those habits remain “good” and achieve results we need to consistently observe for changes in the environment and adjust the cues, practices or rewards accordingly. Much like backing out of the driveway. You don’t look out the back window, just to check off the box. You look to ensure no one is behind you. And if there is an obstacle then your routine changes from “backing up” to “waiting to back up.” Loss Prevention habits are the same - they only serve the advance the goal, they don’t serve simply as something to do.

 Authored by:

Ray Esposito   Ray Esposito

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Loss Prevention Planning Guide

Topics: training and awareness, Loss Prevention program and development

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