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Growing the Manager

Booksellers illustrate the five habits of successful bookselling

Everywhere that independent booksellers turn the stakes are higher. Those who have weathered the entry of chains and the onslaught of superstores have been rewarded with the imperative of responding to the brave new e-world of Amazon and other Internet retailers. Given these increased external pressures, which are making life harder for entrepreneurs in all industries, how should one respond?

By addressing those internal measures that develop ones ability to grow and adapt. As the bookselling market becomes more competitive, leaders in the field say the most effective way to compete is not simply to change strategies or add new tools like a new accounting program or inventory systems. Rather, the most effective way to grow your company is to address the core issue of how to grow your personal skills, competencies, and knowledge. Growing your personal skills enables your business to realize its promise as a distinct enterprise.

In "The Startup Garden: How Growing A Business Grows You" (McGraw-Hill, November,) I talk about the skills that growing a business requires an individual to acquire. Launching and growing a successful company requires more than simple self-awareness. You must develop a healthy business vehicle based on an understanding of your own particular strengths and skills. Then you must add such skills as financial literacy, managerial prowess, and a capacity for personal and organizational learning. Such a perspective isn't limited to startups. The same skills that enable an individual to be in control of their growing venture also enable small shopowners to become more competitive in the market.

For the sake of this article, I'd like to focus on five habits of successful booksellers. In particular, they are: the development and articulation of a clear sense of self that animates one's venture. A working understanding of how this identity translates into a unique experience for a clearly defined community of customers. The third skill consists of learning to learn-as a systematic and deliberate activity. The fourth crucial skill involves learning how to manage others effectively and consistently by setting boundaries and demanding accountability. And the fifth skill calls for what I call "just managing": making a distinct effort to step back and implement managerial systems that enable your store to thrive as your unique venture-without your constant and occasionally overbearing presence.

There are numerous examples of smart booksellers who have taken these steps. Let's look at the most important first step, the anchor for bookstore owners to develop a successful venture. That would be the articulation of who you are, what you offer, and what your venture believes in. Just as all startups must determine how their product distinguishes itself in the marketplace, so too must bookstore owners develop a clear sense of identity and mission. By defining your company's identity and mission you will naturally differentiate yourself from competitors.

Owner Roxanne Coady of R.J. Julia Books in Madison, CT developed a store identity and mission in two phases. When she first prepared plans for her store more than ten years ago, Coady produced a thick document of the business she wanted to open: a community bookstore that combined a cozy setting with an active schedule of readings, signings, and other events to build community and support books. These plans certainly helped Coady realize her vision: R.J. Julia was named PW Bookstore of the Year in 1995

Yet Coady found that knowing what type of store she wanted wasn't enough. For her business to grow and thrive, for her employees to enjoy autonomy and meaningful participation, she needed to take this process one critical step forward. In 1998 Coady and her employees developed a mission statement for the store. This grueling process led to a simple elaboration of the stores' purpose ("A place for our customers, our staff, and our community to share their enthusiasm and excitement for books in a way that enhances the experience for us all,") and its values (Customer service, integrity, respect, style, and responsibility). Coady says the process of developing the statement generated a tremendously useful conversation among store employees.

More important, she says "we are now attempting to integrate the mission statement into all of our policies and procedures and environment." Recently when dealing with a difficult employee, for example, Coady and her managers found that using the explicit principles as a guide resulted in a decision (to dismiss the employee-but with a month's notice, sufficient time for the individual to find other work and to save face at the store) that balanced the store's premium on accountability with a respectful approach to the individual.

If developing a clear set of goals and values is the first step, then the second critical skill for booksellers (as it is for all small businesses) has to do with identifying the unique value one delivers to the customer. The best booksellers cultivate and nurture a meaningful community of customers. At Kate's Mystery Books in Cambridge, MA, for example, owner Kate Mattes does more than offer both new and used titles, produce a regular newsletter, and hold frequent book signings and other author events. She also highlights her ties to local authors and draws from the enthusiasm of her loyal customers.

Outside the Victorian home that houses her store, Mattes has planted flowers and plants that were gifts from local authors Jane Langton, Katherine Hall Page, and Susan Conant. When Jeremiah Healy or Bill Tapply stop by she enlists them to move boxes for her. Robert Parker built some of the wooden bookshelves in the store. Having such strong ties with authors enables Mattes to provide her customers with a greater sense of participation to the world of mystery books. "I think that my customers enjoy coming here and talking with other people. They feel a sense of belonging. Many of my regulars will give advice to other customers, or give them a tour of the store," she says. Mattes also listens to what her customers are saying: she has developed sections of the store that feature strong women or regional settings as a result of customer requests.

Another mystery bookstore, the Mystery Bookstore in Los Angeles, has taken the participation of its community of customers one step further. Last spring, when longtime owner Otto Penzler (based in New York) decided to close down the west coast store, general manager Sheldon McArthur searched for a way to keep the store alive. He found it in the store's customers. With the help of an attorney (and customer,) McArthur sent 500 customers an email seeking help. Within two weeks more than 60 potential investors had stepped up. McArthur eventually tapped more than a dozen in his subsequent purchase of the store. He has also enlisted this group for services ranging from legal and accounting services, website design and support, and general sweat equity.

The third key skill to develop for bookstore owners concerns ongoing education-not simply in the nuts and bolts of the newest inventory system, but a commitment to lifelong learning. The masters of this do so by building a network of supporters and advisors both within and outside of their company.

"Networking is invaluable," says owner Frank Kramer of the Harvard Book Stores in Cambridge, MA, "Anyone who is arrogant enough to think they know all the answers is destined for failure." Kramer, who inherited the business from his father as a 20-year-old in 1962, has spent his career as a bookseller owner trying to expand his managerial chops. When he first took the reins of what was then a college bookstore, Kramer supplemented his know-how through a simple weekly newsletter from NACS, the National Association of College Stores. Over the years, as his business grew, Kramer grew his knowledge through actively participating in the ABA-taking regular courses and picking up tips by osmosis from fellow owners.

Yet Kramer has also tried to become a better bookseller by focusing on his business skills. He was the only person in the book business to take the Harvard Business School owner/manager program some twenty years ago, which he says "gave me a smattering of business knowledge." And for the past 14 years Kramer has continued to address his ability to lead the company through involvement in The Executive Committee (TEC) a formal network of people who run small businesses and who meet regularly to help one another with their most vexing business issues. The value of such a group rests in its ability to identify key business issues that transcend one's personal business. "Through TEC I've learned the importance of matters like having a profit and loss statement on the fourteenth of every month," says Kramer, "Or that as the head of the company you can't expect other people to make the tough decisions. Those are yours to make."

Such a grasp of solid business skills leads to the fourth essential skill for bookstore owners, one of the most challenging of all: learning to set boundaries when managing employees. For many booksellers, this can be a painful process. In her early days of the store, Roxanne Coady would often overlook employee's poor behavior. "I just wanted them as my friends," she says. Yet such an approach "basically reinvented a dysfunctional family," she says. Eventually Coady implemented a more formal system in which individual employees set clear goals, and then review these goals with a manager on a regular basis. This enables people to discuss their desired and actual behavior, and helps both worker and boss to explore how to create the right conditions for employees to do their best.

This leads to the final skill, in which you reach a point where you can realize the distinctive promise of your business-without your constant presence. This issue goes beyond the mere issue of learning not to micromanage (itself a big deal). The question comes down to this: does your store have sufficient policies and procedures, coupled with an explicit employee awareness of your mission, for the store to continue doing what it should without you?

In some ways, bookstore owners can accomplish this process only if they have gone through the first step of articulating of mission and values. Without such a compass, no degree of delegation or trust in employees will enable them to make decisions that are aligned with the overall company goals. Michael Powell didn't cross this crucial threshold until his Portland-based Powell's City of Books had roughly 75 employees. "As we grew from a single store to a more complex organization, we had to confront the issue of what systems and strategies we had in place to accommodate the growth and the potential for future growth," he says.

Yet such a transition awaits bookstores of any size that have a commitment to growth and excellence. Regardless of your company size, you must begin to implement systems that enable the business to continue on its own. "The articulation of values and strategy doesn't have to be a formal process, but you have to do it," says Powell. "Because the owner can get sick, for example. Ask yourself: could you walk away from the store and have it be okay?"

Formulating a strategy and then creating a team-or even a manager-to help implement the plan changes life in two key ways, says Powell. The first is that the owner assumes a new role that may be rooted in daily operations yet takes a broader view of the business. And the second, hopefully, is a store in which employees have the power and the expectation to make good decisions. "Though all of this you have to be willing to delegate and trust," says Powell, whose company now has seven stores, a booming online presence, and more than 500 employees. "The goal is to empower people to be part of the decision-making process, to offer their ideas and feel an ownership about the company."

How can an independent bookseller compete with the larger market forces today? By teaming up with others to create a unified front, says American Booksellers Association CEO Avin Mark Domnitz. He offers the following suggestions for bookstore owners be more competitive-no matter their size.

"To survive in 2001 independent booksellers must be excellent retailers. This means having a full and complete understanding of their business. Their financial structure must be current and strong. They must have measurement tools for judging how they are doing compared to others in the industry, and they must be able to make forecasts and have the flexibility to adapt when necessary.

"Booksellers must focus their activities on the customer. To do this they need local marketing intelligence: data that tracks who your customers are and what type of books they like. There are many excellent available tools to gather this information and create an excellent consumer database. This is one area in which people have to "Think like a chain, act like an independent." All of the major retailers have techniques and tools to gain market intelligence. Independents must use these same tools while at the same time communicating their attributes and qualities as independents. They need to market that identity.

"That's the major impetus behind the formation of Book Sense, which strives to maintain and enforce the diversity of the independent market. The only reasonable way to do this is as a unified group. You can't place yourself apart from the community of independent booksellers. Acting alone, independents won't have the power to confront the realities of the marketplace. Barnes and Nobles and Borders together do approximately $9 billion in business. How does an individual independent fight that?

"The great challenge for independents is to live out in the real world the claims they make and the aspirations they have about who they are and what they represent. You can't make claims about your mission statement without living your mission statement. You can't create who you are through rhetoric and then not carry it through in everyday practice. Too many independents have tried to create this image of themselves as something unique and then haven't delivered. I understand how challenging this is. Independents must try to grow their business. When your cost structure is going up, if you aren't growing your business then you are eroding your profit."

(This article appeared in Publisher's Weekly 11/5/2001)

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