New GMs and What They Need

New GMs and What They Need

and   |  June 24, 2020

Three Profiles: How Columinate can help new food co-op GMs

 

When a co-op board hires a new general manager, the directors know that there’s seldom an “ideal candidate” out there waiting. Instead, they choose the candidate who offers the best potential to meet the specific qualifications that the board has decided will advance the vision for their co-op. Since boards often realize that their new GM may be lacking in certain key areas they may look for resources to help mitigate the new leader’s deficits and build on their strengths. Columinate can help. Here are three common profiles of new co-op GMs and services that Columinate can provide to support them.

Internal candidate or someone from another co-op without previous GM experience

 

This person has never before been responsible for managing an entire organization, even though they are very familiar with their own co-op or with co-ops in general. Ideally, their former boss included them in developing budgets and interpreting financial reports. Otherwise, they will likely understand the income statement but may lack experience in reading and interpreting balance sheets or cash statements. Their budgeting experience will include projecting sales and labor for a department they managed, but they won’t have been responsible for coordinating the creation of budgets–operating, capital or cash. If the hiring co-op is too small to have a real financial manager, the new GM will need to fill that role. Otherwise, they will need sufficient understanding of finances to effectively manage the financial manager.

A similar issue could arise if the co-op is small enough to not have an HR Department. There are several legal requirements that must be met around hiring and employment documentation and withholdings that the GM will need to be aware of if they are filling that role.

An internal hire, or one from another co-op, will likely have a reasonably good understanding of the board’s role, but they may not have experience in creating reports for the board or otherwise filling the GM’s role vis a vis the board. We can pretty much count on them having philosophical alignment with the ends. They will understand “co-op culture” e.g. staff expectations to have a voice, importance of multicultural awareness, importance of supporting local producers. If they are internal candidates, they face the challenge of supervising people who were their peers. Developing subordinates may not be on their radar, if no one has systematically developed them. 

When it comes to store operations, they may already have a good grounding, especially if they have already filled the role of store manager or operations manager. A possible challenge may be delegating to others what the new GM may have once done themselves. When faced with the necessity of mastering unfamiliar areas of expertise, it’s all too easy to fall back into focusing on the familiar. 

What Columinate can offer for this category of candidate:

This category of GM tends to be open to coaching and support. The earlier in their career that a coaching relationship can be established, the more impactful and successful it will be.  Columinate can work with the board and new GM through a suggested approach that combines an honest assessment of the GM’s skills compared to the position’s demands. The assessment and development plan at the moment of hiring provides stability through a six to twelve month coaching relationship with a Columinate consultant. There are several areas of support that can be explored: 

  1. A Financial Basics curriculum: Ensure that the GM has a firm grasp of margin, sales, and labor, as well the impacts of these three categories on cash, inventory, and assets and liabilities.
  2. Metrics: Develop the understanding of how these foundational elements convert into key metrics, what levers the GM has available to influence them, and how the work of developing team members is crucial to moving the dial on metrics in a sustainable way.
  3. Reporting: Report these metrics within the format of ends monitoring or strategic plan monitoring that the Board wants to see.
  4. Leadership Skills: Develop the leadership and communication skills necessary for success as CEO of our complex organizations.

Ideally, in addition to the concrete skills around financial acuity, there is also an opportunity for the consultant to help build the relationship between the GM and the Board by attending Board meetings and providing coaching both before and after the monthly meeting. The Board can provide feedback to the coach that helps them to clarify, and guide the new GM towards, outcomes that the Board wants to see. When done well, this can also help craft the kind of sustainable leadership that the organization and the Board (as well as the co-op community!) wants to see.

Chain store managers

 

These candidates have managed individual stores in either “natural” chains, such as Whole Foods, Natural Grocers, or Sprouts, or in big conventional chains such as Safeway, Kroger’s or HyVee. They understand their store’s income statements really well, with a clear grasp of margin and labor. They generally have no experience with balance sheets or cash statements. In many chains, their operating budget is handed down to them to implement, but in some companies the store manager is allowed to create the first draft or otherwise have a say in developing it. However, they have no experience with the creation of capital or cash budgets. 

In the companies for which store managers have worked, corporate headquarters has handled HR policy, marketing, accounting, IT, purchasing, pricing, even merchandising. These candidates are attracted to the idea of a community-owned grocery store and they are powerfully drawn to the prospect of having autonomy. They look forward to being able to decide on product mix and pricing and merchandising. Even those coming from conventional grocery chains have plenty of experience with organic products, and if they haven’t already worked with local producers, they are excited to start doing so. They already identify themselves as healthy eaters, or they hope that working for the co-op will accelerate their transition to a healthy diet.

Typically chain store manager candidates have had a lot of experience managing department managers and if they make it to finalist it’s because they have been able to demonstrate a coherent philosophy of managing people and their references back that up. On the other hand, they are generally uneducated about the role of the board. Governance is a foreign country to them but they don’t realize how foreign. They will need guidance from the board on what is expected of them. Also, they don’t realize how different “co-op culture” will be from their previous experience. They may have a vague sense of alignment with the ends or vision statements, especially those about serving the community and supporting local producers, but they will need guidance on how to measure and report on progress toward the ends.

What Columinate can offer:

This category of training requires a higher level of discernment. These leaders have the basics of driving the sales and labor to the bottom line, but may be less comfortable with the concept of assets, liabilities, and perhaps most importantly, the equity model that co-ops use. These leaders tend to be attracted to (and recruited by) slightly larger cooperatives that may be in the middle of a growth cycle or are more likely to have or need a three to five year business plan. These plans typically necessitate some familiarity with capital planning as well as the ability to support a finance team through a multiyear budget cycle.  Additionally, this planning frequently relies on key assumptions sourced, or at least influenced, by department managers and their teams. This input model inherently requires the ability to lead and engage the team frequently and transparently.  

  1. Address the stigma of being “corporate”: It is important that the new GM be able to share their applicable retail experiences while cultivating a respectful curiosity, combined with a commitment to judicious fact-finding. One frequently cited obstacle in building the internal organizational relationship is the looming label of “corporate” being applied to the new GM, as well as suspicion about new approaches to problem solving. This culture piece is important to address head on.  
  2. Proper Onboarding: As an onboarding approach, it is helpful to have a consultant to the GM who can teach, at a high level, not only the history of cooperatives as a social movement but as an economic model. This internal organizational work should take place concurrently with aligning the planning cycle to the organization’s vision statement(s) as well as the Boards’ interpretation of the ends policies.
  3. Reach them Early and Often: The key to successfully coaching and mentoring this new GM is to reach them early and often about the levels that cooperatives operate on. The 30-60-90 training model of peeling back these layers is crucial. There will be a significant learning curve in multiple areas. This requires a high level of curiosity and commitment to vulnerability, while still maintaining the role of leader. An experienced coach can provide safe spaces to share frustrations, fact-check cultural assumptions, and ask questions without the risk of appearing unprepared for the role.

Managers above chain store manager level

 

The larger co-ops are sometimes able to attract and adequately compensate people such as district managers who supervised a group of store managers in a chain, people who worked in corporate headquarters developing programs for the whole company, or someone who managed a whole organization of some sort that is on a scale similar to the co-op’s. 

These candidates probably do know balance sheets and cash statements and have managed the budgeting process for an organization. And/or they have experience managing the higher-level corporate functions. They are used to setting goals and giving managers leeway to achieve them. Their jobs likely involved developing subordinates and they often report great satisfaction in seeing those people promoted to higher levels. 

Like the previous category, they do not have an understanding of the role of the board. Again, governance is a foreign country to them. Their experience is generally limited to corporate boards of investors primarily motivated by getting a return on their investment. As a result, these boards are more direct in asserting their role by intervening in company operations. A board that governs but does not manage will be outside their experience. Also like the chain store manager category, these candidates don’t realize how different “co-op culture” will be from their previous experience. Like the previous category, they may have a vague sense of alignment with the ends, but they will need guidance on how to measure and report on progress toward the ends.

Even more than the previous category, they have a high regard for their own expertise and as a result, they don’t readily acknowledge that they need any form of support which can be a barrier to their own success. 

What Columinate can offer:

  1. Build an understanding of co-ops: At this level, many of the co-ops of significant size have already experienced the growing pains of identity and culture and are looking for an executive that can meet the long-term needs of a much larger organization, even while maintaining some sensitivity to co-op culture. A Columinate consultant can assist in helping the new GM understand the difference between a co-op that sees itself as beholden to stakeholders, and an organization that is beholden to shareholders.
  2. Serving a Board: As a profile, many professionals at this level see themselves as entrepreneurs, wanting to lend their expertise in a space that is likely more aligned with their personal social/environmental beliefs. They need to understand that while they have a high level of acumen, they are accepting a role that requires them to serve a Board – and the members of the Board cumulatively may not have the same level of business expertise that their new hire does. That being said, the Board is clear that their role is not just to ensure the financial longevity of the co-op but to guide the decision making process through the lens of the Governance model of the co-op. This can create friction down the road, after the honeymoon phase.
  3. Peer Relationships: Columinate can provide a peer relationship, based on a wide range of professionals with various levels of business expertise both in and outside of the Co-op sector.  The goal is to not only engage the new GM in terms of professional depth, but to challenge their assumptions about their approach and gaps in knowledge about cooperatives. There is a cooperative difference and the goal of helping the co-op grow while maintaining its unique retail identity is a valid and necessary lens to develop.

Summary

Just as there is a wide range of cooperatives, there is a wide range of skill sets in new general managers. We believe that building a transparent, supportive team, comprised of both internal and external partners, can create the kind of leader that serves all stakeholders successfully. 

Interested in working with Columinate to support you and your GM? Contact us to get started. 

 

About the Authors

Carolee Colter

Human Resources for Boards &...

[email protected]
250-505-5166

Christina Nicholson

Project Management, Interim GM Services

[email protected]
612-615-6464

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