Return on Investment of Columinate’s Management on Contract Services

Return on Investment of Columinate’s Management on Contract Services

  |  March 21, 2021

When co-ops enter a time of transition, they can turn to Columinate’s group of experts available for contract management services. These folks step in as Interim General Managers (IGMs) to work fast and smart, implementing lasting change for their clients. Ranging from a few months to a few years, IGM engagements are meant to bridge a co-op from Point A to Point B. IGM’s are change agents, troubleshooters, stabilizers. “An IGM can do something very specific or very general. It’s a role that offers a lot,” says operations and management solutions consultant James Morrell. “The longest, biggest impacts are cultural shifts, where a co-op needs to grow from the co-op that it was into the co-op that it aspires to be. An IGM is often uniquely positioned to help facilitate that move.”

Investing in an IGM is investing in an impartial, skilled leader to move you forward and set you up for success. “There is a return on investment for the co-op beyond just bringing someone in to manage the operations,” says co-op and conventional retail support consultant Tim Sullivan. “Our IGMs have the opportunity to work in a variety of co-ops, so we gain an experience level that most GMs just don’t get.” They are, in effect, talent developers, drawing from their toolbox of experience-based knowledge to empower and accomplish. Here are a just a few specific examples.

Culture Shift

Contract management pays off for the bottom line and co-op culture. During a recent IGM engagement, regenerative retail specialist Mark Mulcahy revamped organizational structures “to the tune of $80,000 in savings,” he says. “Now, teams work together where they hadn’t before and that results in higher sales dollars and less turnover. Employee turnover can cost a co-op up thousands annually.” He also implemented morale-improving programs and communications protocols that will add up for years to come.

“These are the types of things that as an IGM, I can come in and show them by working alongside them,” says Mark Mulcahy. “People are working more effectively, using their time better, and have more information to better serve the customer. That will amount to years of impact and add up exponentially.”

“What we do is bring hope,” Mulcahy says. “We bring confidence and empowerment to the team.”

Data Scouring

There’s also the benefit of a keen, experienced eye. Co-op retail support consultant Wynston Estis says her fresh perspective can be incredibly valuable. “When I take the reins of a co-op, I’m looking at all its systems and ‘customs’ to evaluate what is serving that business well and what no longer works,” Wynston says. “Even in newer co-ops, just 4 or 5 years old, there can be systems in place that are simply there because ‘we’ve always done it that way’. IGMs can see how those unexamined systems, such as poor receiving, ordering and backroom inventory management systems, aren’t working and offer recommendations of how to address them.”

Contract managers can draw from their experience to push through crucial administrative processes. One of Tim Sullivan’s engagements yielded a complete turnaround of fiscal results within three months. Among other challenges, the co-op had seen double-digit sales decreases over two years, which Sullivan dug into. He discovered that the store’s accounting system combined bakery and meat with food service. Although bakery and meat were doing well, the accounting structure disguised the actual poor results in food service. More data-scouring led to: “the store’s gross margin was way below benchmarks and labor cost was way above. The result was a department losing over $100,000 a year. So we began to work on both issues.” By the end of Sullivan’s seven-month engagement, sales had swung into the positive — a $127,000 swing, in fact.

IGMs bring fresh eyes, diverse experiences, and a passion for the work we’re all doing together. They are a bridge from the past to the future to set your store up for significant savings and lasting success.

Empowerment and team development creates results 

The fresh approach of IGMs during times of instability can also help ground a co-op and set them up for future success. During his IGM engagement with a small retailer in Western Massachusetts, Scot Destasio capitalized on the shift in small rural store sales caused by the pandemic and found opportunities for fostering sales growth. “Through my work, we found a viable option forward for their store and their community.” As a result of his contract, the co-op is on track to have a new GM in place in 2021.

Dennis Hanley recently completed a 10-month IGM engagement with significant positive operational results, including improving cash by more than $300,000, increasing margin in the produce department by 1200 basis points, and establishing a new vendor relationship that resulted in a $60,000 cash inflow to the co-op. His approach emphasizes empowerment and team development.  “Dennis’ main strength is how he treats people. He treats staff with respect and with the presumption that they want to succeed,” according to the Front End Manager. “One of Dennis’ phrases is that he never tells someone what to do. He got positive results from by laying out what needed to be done and left the decision to do the correct thing to us. He is a big proponent of helping the careers of people who are often marginalized. He encouraged women and people of color to step forward and take charge. He promoted women to management positions and made sure that their salaries were comparable to men in management,” they said.

Niskayuna Co-op Co-Presidents Sunny Lee & Sarah Bilofsky had this to say as Dennis was winding up the engagement:

“We truly believe our store would not be open today without Dennis Hanley’s leadership. He has been relentless in keeping our team and customers safe during COVID – while making sure the shelves stay stocked. It certainly wasn’t something we saw coming when we hired him, but we are so glad he was here during this challenging time.

As Interim General Manager, our board of directors tasked Dennis with conducting a top to bottom review of the store. He delivered. From renegotiating key contracts to resetting the produce department, he has turned our co-op around, positioning us for success for years to come.”

Measurable Change, Human Touch

Following IGM Garland McQueen‘s five-month IGM engagement at Silver City Food Co-op in Silver City, New Mexico, the board president shared unsolicited positive feedback.

“I want to take a moment to let you know how pleased we have been with the quality of professional leadership that Garland McQueen has provided our cooperative. He met or exceeded the goals he set when he was hired and exceeded our expectations. He improved profitability and greatly improved cash flow without inviting drama from staff and member-owners over having made significant changes. He mentored our assistant manager, who is now showing improvement in his interpersonal interactions with the staff and the board. He was also quite helpful in our process of recruiting a new general manager and provided valuable input into our planning for expansion.”

—Laurinda Anderson, Board President, Silver City Food Co-Op, Silver City, NM

For startups, Columinate is pioneering with Gem City Market in Dayton, Ohio, with an 18-month management on contract engagement that includes project management and remote IGM support during the construction phase, full-time on-site IGM services in the months before store opening and a GM Development and Training program to help Gem City’s GM open and run the store with the skills they need. See the story here.

Interested in learning more about Columinate’s management on contract services? Contact Mark Goehring, [email protected]

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