11/1/2008 | Palmer, W., RILA Report
In last month’s column, we discussed the need to understand the “hot buttons” that really capture the attention of your senior executives. As examples, we talked about financial ROI, risk avoidance, sales risks, and high value theft cases as possible hot buttons. One reader weighed in this month with another example. He wrote, “I n my company, my CEO is all about protecting the integrity of the brand, as it relates to merchandise and customer experience.” Knowing that hot button allows this executive to advance his proposals in light of how they would support this important organizational aspiration.
This month, we will look at another key factor in gaining board and CEO support for your programs – expertise credibility. In 1998, Jay Conger wrote an article for the Harvard Business Review titled, The Necessary Art of Persuasion which gives a great, easy to understand summary of the two prerequisites for persuading anyone to do anything – expertise credibility and relationship credibility.
Since getting anyone to adopt a new opinion or change an existing one is difficult, Conger argues that to be successful in persuading someone, they must view you as having expertise. Think about it in another context – medicine. If you were concerned that you had a serious health issue, who would you turn to for diagnosis? Someone whose only claim to expertise is that they “stayed at a Holiday Inn Express last night”? In fact, if you had a disease that was really serious, you would most likely seek out the doctor with the best reputation and experience in the area of medicine you require. You would not likely go to an optometrist or even your general practitioner if you had a rare blood disorder.
But, have you ever noticed that it seems like everyone in your organization thinks they know how to do loss prevention? While we should always want the ideas and contributions of others in the enterprise, we also need to do a better job at establishing our own expertise and the existence of loss prevention as a professional expertise akin to accounting or marketing or human resources.
One of the ways we can do a better job with establishing credibility is by increasing transparency. In other words, let’s educate others about what we do and how we make our decisions. Let’s listen to their perspectives and not be defensive. If you learn what they think, you will have a better handle on how to work with them and what you need to do to persuade them to a different mindset. Educate them on our industry. How many people know that there are professional conferences, research councils, text books, certifications, and degree programs for loss prevention?
At the end of the day, we must have more substance in our profession both at the industry level and within our own organizations if we hope to have lasting impact. I highly recommend Conger’s article as he also discusses how you can improve your expertise credibility on a tactical level. Even more importantly, I would like to encourage you to write in with your thoughts, examples, disagreements with this column and any future ones. This space will be a whole lot more useful to everyone if you participate and add your thoughts. Otherwise, you are simply stuck with my opinions…
Do you and your department have “expertise credibility” in your organization? Do you have it with certain functions or people but not others? For instance, do you have strong credibility with the CFO, but not your head merchant or HR executive? Do you have some examples of successes you have had in establishing expertise credibility within your organization? If so, please share them and we can generate further ideas and dialogue.
In next month’s column, we will start to look at the next element in building the case for the value the loss prevention function brings to the retail enterprise – relationship credibility. As always, I welcome your views, thoughts, and insights into these issues. You can contact us at our contact page.
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Originally published in RILA Report – Asset Protection – Volume 2 – Issue 9, November 2008
© 2008, Walter E. Palmer, PCG Solutions, Inc., All Rights Reserved
Frequently Asked Questions
2008 Blog Archive
Survey: Twenty Four Retailers Lost $6.7 Billion to Theft Last Year
Retailers set a new record in 2007, as they apprehended more than 700,000 shoplifters and dishonest employees, according to the results of the 20th Annual Retail Theft Survey conducted by loss prevention consulting firm Jack L. Hayes International.The firm recently announced the results of the survey, which also found that criminals stole over $6.7 billion worth of merchandise from only 24 retailers in 2007. (SecurityInfoWatch.com, October 2, 2008)
New Law Prohibits Devices Used to Shoplift From Stores
Shoppers with large handbags may find themselves being watched closer. The Des Peres Board of Aldermen on Sept. 8 passed a law prohibiting any items that could be used to shoplift. These items include large handbags with false bottoms, devices for removing permanent tags from some clothing, or any tool that could be used for shoplifting.
“The number one crime that we encounter at West County is shoplifting, as far as stealing under $500,” said City Administrator Doug Harms. “To do that, people have become very inventive about methods that they use, including bags with false bottoms and instruments to remove security devices.” He said people suspected of shoplifting will be stopped, and if any of these items are found in their possession, they would be taken in for questioning. (Webster-Kirkwood Times, September 19, 2008)
Ebay prevails in suit over fake Tiffany goods
EBay Inc. scored an important victory in court Monday, as a federal judge said companies such as jeweler Tiffany & Co. are responsible for policing their trademarks online, not auction platforms like eBay. Tiffany had sued eBay over the sale of counterfeit jewelry on eBay’s sites.U.S. District Judge Richard J. Sullivan in New York said in a Monday ruling that eBay can’t be held liable for trademark infringement “based solely on their generalized knowledge that trademark infringement might be occurring on their Web sites.” Sullivan’s ruling came in response to a lawsuit filed in 2004, in which the jeweler alleged that most items listed on eBay as genuine Tiffany products were fakes.
The company said it had asked eBay to remove counterfeit listings, but the sales continued. EBay spokeswoman Nichola Sharpe said Monday that the ruling “confirms that that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting.” (The Financial Times, July 14, 2008)
Ebay Ordered to Pay LVMH for Counterfeit GoodsEbay prevails in suit over fake Tiffany goods
A French court yesterday ordered Ebay to pay almost €40m (£31m) to luxury goods maker LVMH for failing to do enough to block sales of counterfeit goods, a decision that hits at the heart of Ebay’s business model.The world’s biggest e-commerce company was also ordered to block sales of genuine bottles of perfume made by four LVMH brands after the court ruled that it had breached the selective distribution agreements that LVMH uses to control where and how the perfume is sold.Ebay said it would appeal against both rulings, claiming the decisions could have much broader implications for online commerce by imposing restrictions on the way goods can be sold and hence consumer choice. (The Financial Times, July 1, 2008)
Chinese Gang Charged with $147 Billion in Fake Receipts
The sums are impressive by any standards. Had it been uncovered five years ago, the scam would have amounted to nearly 10% of China’s GDP at the time. It is equal in value to Google’s stockmarket capitalisation today. In what is being described as the biggest scandal of its kind since 1949, four men pleaded guilty in a court in Yunnan on February 22nd to producing bogus receipts valued at 1.05 trillion yuan ($147 billion). These could have denied the tax authorities more than 75 billion yuan in revenues. A fifth suspect will stand trial in a separate case.The scam, operating in nine provinces, was based in Guizhou. In all, more than 1m fake receipts were found, ready for shipping to Kunming, Yunnan’s capital, where they were to have been distributed and sold in China’s larger cities. Two lorries were needed to carry them away. According to the tax authorities, the fake receipts were indistinguishable from the real thing.. (The Economist, February 28, 2008)
Outrage in UK over Staff Blacklisting Database
Last week the announcement that several UK retailers were collaborating on compiling a database of employees dismissed over suspicion of theft or fraud caused furore amongst the public, trade unions and civil liberties groups.
The database is the brainchild of Action Against Business Crime (AABC), the national organisation for Business Crime Reduction Partnerships in the UK, and is due to go live later this month.
Employees who are dismissed for dishonesty or who resign before they can be dismissed will be added to the National Staff Dismissal Register (NSDR), which can be searched by prospective employers when conducing a background check on a job candidate. Acts that can get an ex-employee put on the register include theft or attempted theft of money, merchandise or property, falsification or forgery of documents, fraud, causing a loss to the company or causing damage to company property. (SiliconRepublic.com, May 12, 2008)
CCTV has Failed to Slash Crime
Massive investment in CCTV cameras to prevent crime in the UK has failed to have a significant impact, despite billions of pounds spent on the new technology, a senior police officer piloting a new database has warned. Only 3% of street robberies in London were solved using CCTV images, despite the fact that Britain has more security cameras than any other country in Europe. (The Guardian, May 6, 2008)
The Cost of Shoplifting
Retail theft used to get little attention — and retailers were just fine with that. Little press meant that potential thieves could not figure out how to steal from them and that the public would not learn that most of the theft was done internally, or that theft is widespread throughout the industry. But Dan Doyle has spent the past few years talking about it with everyone who would listen: other retailers, law enforcement and even the public. As a spokesman in the retail loss prevention industry and the former chairman of the National Retail Federation’s Loss Prevention Advisory Council, he has brought the issue to the forefront and helped change attitudes that retail theft is a petty crime and that teenagers who shoplift are the typical perpetrators. (Telegram.com, March 30, 2008)
Store Losses Studied
Retailers around the world spend more than $2 billion every month on loss prevention, yet shoplifting, fraud, and administrative errors just keep mounting. These losses rose 1.5 percent last year to almost $100 billion. European stores already have lower shrinkage rates than retailers in the United States, and they are working to reduce them further by adopting more sophisticated loss prevention practices similar to those practiced by U.S. companies. “Europe is following the U.S. with more managerial, audit-finance methods” says Joshua Bamfield, the report’s lead author. (Security Management, March 19, 2008)
Thieves could escape jail in shakeup of sentencing rules – if they are drug addict
In the U.K., thieves who steal to feed an addiction to drugs, drink or gambling could escape jail under new sentencing guidelines. They would even escape jail if they hit or threaten a vulnerable victim, such as an elderly shopkeeper. The normal jail term for criminals who steal from vulnerable people would start at 18 weeks. (The Daily Mail, March 13, 2008)
Guide to Check and Card Fraud
This guide describes the problem of check and card, including debit, charge, credit, and “smart” cards, fraud, and reviews factors that increase the risks of it. It then identifies a series of questions to help you analyze your local problem. Finally, it reviews responses to the problem, and what is known about them from evaluative research and police practice. (Pop Center,February 21, 2008)
Survey: Companies overconfident in their data security
Deloitte & Touche’s second annual security survey of more than 100 companies in the technology, media, entertainment and telecommunications industries has found that an overwhelming majority are overconfident in their ability to prevent security breaches.
Sixty-nine percent of respondents said they are confident about the ability of their organizations to mitigate external security threats. However, 46 percent of those same companies don’t have a formal information security strategy in place–something that would seem to be necessary to mitigate those threats. The survey was based on information collected from CSOs, CISOs and security management teams between May and December 2007. (CSO Online, February 13, 2008)
Compliance: Gauging Success Through Hotlines
Data generated through hotlines can provide a barometer of employee perceptions. Do they believe the company will protect their confidentiality? Do they understand what issues to report, and do they fear retaliation? Hotline results provide an interesting point of view on these issues, including insights into developing trends in areas such as trust and integrity.
Consider what the Report indicates about open door policies, for example. Because so many issues had not been previously reported to management, it suggests a surprising trend. Despite organizations’ best efforts to promote reporting through managerial channels, employees may still prefer alternative reporting methods. (Sarbanes-Oxley Compliance Journal, January 29, 2008)