Category Archives: Theory/Research

Organized Retail Crime (ORC) White Paper Released

The ASIS Foundation has released our white paper – Organized Retail Crime: Assessing the Risk and Developing Effective Strategies – and it is now available in print and on-line at this link.  This report is part of the Foundation’s CRISP series which stands for Connecting Research in Security to Practice.  In the course of putting this research together, we had the chance to not only review all the available literature on the issue, but also interview and visit with many of the leading retailers who consider this issue to be a key priority.  We also had the opportunity to speak with those retailers who do not consider ORC to be a major threat to their operation.

Over the course of the upcoming days, we will highlight some of the findings from the report, some of the unanswered questions from the research, and some ideas about what needs to be addressed on this issue going forward.

Alignment: Is it Time to Visit the Chiropractor?

In previous posts over the past couple of months, we started a dialogue on how to be more effective in getting the support of senior management for your programs, budgets, and proposals. We addressed:

  • Demonstrating a “Cause and Effect” Relationship
  • Speaking the Language of Senior Management
  • Knowing Their “Hot Buttons”
  • Establishing Expertise Credibility
  • Playing Nice in the Sandbox: Relationship Credibility

If you missed any of these columns, you can still them here or at www.PCGsolutions.com/articles.htm.

In this post, we are going to look at the issue of alignment. Fred Smith, Chairman of FEDEX, has said, “Alignment is the essence of management.” Alignment occurs in two dimensions. In horizontal alignment, we talk about how processes are aligned with customer needs. In vertical alignment, we talk about how people are aligned to an organization’s strategy. This is where we will focus in this column.

In their landmark book, The Power of Alignment, George Labovitz and Victor Rosansky have this to say about vertical alignment, “Vertical alignment is about the rapid deployment of business strategy that is manifested in the actions of the people at work. When vertical alignment is reached, employees understand organization-wide goals and their role in achieving them.” If we apply this to the Loss Prevention function, it means that we understand how our work supports the overall strategic goals of our organization. But, as importantly, it also means that others in the organization, including senior management, understand how we support the overall strategic goals.

In his article, “Not A Moment to Lose: Influencing Global Security One Community at a Time,” in the January/February 2009 issue of LossPrevention Magazine, Francis D’Addario identifies the need for alignment between loss prevention and the organization. “We must be conversant with the mission, values, and business objectives of our companies and interdependent service providers to affect ‘all hazards’ awareness and mitigation.”

Last year, Protiviti (www.protiviti.com), a global consulting and internal audit firm, conducted a survey aimed at assessing the differing priorities of executives and Loss Prevention management. Some of their findings were quite concerning. In their opening introduction, they summed it up as follows:

“Retailers appear to have a problem: Their loss prevention management is not always working towards the same goals as those of corporate executives. While the C-suite is developing an overall strategy that all departments in the retail organization – including loss prevention (LP) – are expected to follow, what they identify as being areas of concern may not necessarily align with the priorities of LP management.”

This conclusion leads to the question, “How can you possibly hope to get support for your programs if your senior management doesn’t believe your efforts align to the overall mission of the organization?” Since misery loves company, I will note that we are not the only staff function that faces this challenge.

For instance, the human resources profession, another staff function, faces the same challenge with several studies over the past few years showing the same disconnect between senior management and HR leadership.

This gap or disconnect could be caused by several factors. Some possibilities include:

  • We have not articulated our strategy and mission and how it connects to the overall strategic plan for our organization.
  • We have not communicated effectively with senior management to let them know our strategy and our progress towards goals.
  • We have not defined our mission in ways that are meaningful to senior management. For instance, perhaps we talk about case statistics without connecting them to shrinkage, lost productivity, out of stocks, etc.

There could be many more reasons for the gap. What are your thoughts? Do you think you and your senior management team are aligned in priorities and strategies? If so, how do you accomplish that in your company? Please share your successes or challenges.

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Originally published in RILA Report – Asset Protection – February 2009

Playing Nice in the Sandbox: Relationship Credibility

In Monday’s post, we discussed the first of two prerequisites for persuasion and influence as identified by Jay Conger in his 1998 article The Necessary Art of Persuasion which was published in the Harvard Business Review. The first prerequisite that we covered was expertise credibility – the necessity that others view you as having the knowledge, skills, and experience to know what you are talking about.

However, Conger argues that expertise credibility is wasted if it is not coupled relationship credibility. But, why are relationships important? Don’t we sometimes think that as long as we “do the job we are paid to do” that nothing else matters? Have you ever said, “They don’t pay me to be popular”? It seems that we often equate “building relationships” with smoozing, kissing up, or being manipulative. This couldn’t be further from the truth.

Having relationship credibility does not necessarily mean that you are popular or have lots of friends at work. The first aspect of relationship credibility is that others in the organization trust you to listen and to work in the best interest of others. Instead of simply foisting your plans or priorities on others, you meet with them one one-on-one, get their views on initiatives you are pursuing, listen to their concerns and priorities, and find a way to help them with their top issues and projects.

The second aspect of relationship credibility is that others view you as having “consistently shown strong emotional character and integrity.” This means that you are consistent and not prone to emotional outbursts and mood swings. In the past, when I’ve asked groups whether they would prefer to work for someone who is a jerk everyday without fail versus a boss where you can never tell “which side of the bed they woke up on,” the group chooses the consistent jerk every time. Inconsistency in a relationship is a sure predictor of failure.

When you can establish yourself as trustworthy, consistent, and working in the best interest of the group, you have an edge in any negotiation, meeting, or persuasion situation. Others in the group, will want to help you them achieve your goals and will give you the benefit of the doubt. However, if people don’t trust you on a relationship level, your expertise is wasted and you will lose the ability to bring influence to your organization.

Remember, relationship credibility must go hand-in-hand with expertise credibility. Have you ever worked with someone where the common comment about him was, “He’s a nice guy, but he doesn’t have a clue what he’s doing”? That is not a recipe for success. Like so many things in life and work, you cannot depend on one “magic bullet” to make you successful.

Do you and your department have “relationship credibility” in your organization? Do you have it with certain functions or people but not others? For instance, do you have a strong relationship with the CFO, but not your head merchant or HR executive? Do you have some examples of successes you have had in establishing solid relationships credibility within your organization? If so, please share them and we can generate further dialogue.

In a future post, we will start to look at the issue of alignment and how misalignment derails the ability to build the case for the value loss prevention brings to the retail enterprise. As always, I welcome your views, thoughts, and insights into these issues.

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Originally published in RILA Report – Asset Protection – December 2008

Expertise Credibility: A Prerequisite for Persuasion

In a previous post, 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.

In this post, 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 a future post, 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.

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Originally published in RILA Report – Asset Protection – November 2008

Preliminary National Retail Security Survey Results Presented

At the recent National Retail Federation Loss Prevention Conference in Los Angeles, Dr. Richard Hollinger from the University of Florida presented the preliminary 2008 results.  Many of us look to this survey as the benchmark for shrink performance and the figures here will be cited over and over again in the press.

Overall, inventory shrinkage as a percentage of sales (retail) came in at 1.52% with 95 retailers reporting.  While this is up from 2007’s all-time low of 1.44%, it is still the second lowest number in the history of this survey that has been compiled since 1991.

Extrapolating this percentage out against total industry sales in 2008, gives a dollar figure of $36.53 billion.  From a purist’s perspective, I think this is a bit dicey as the overall percentage is calculated as an average of all respondents shrink percent number and not weighted based on sales volume of responding company.  But, we do not have any better source as an industry.

As to estimates from retailers on the sources of shrinkage, the gap between employee theft (43.7%) and shoplifting (35%) continues to inch closer to each other.  Final results will be released soon and results may change slightly in the final report based on late survey responses.