The Challenge: The organization needed a significant overhaul to improve customer service and teamwork.

The Solution: Created a structured professional development program that nurtured and developed its people and allowed it to shift to a leadership-driven organization.

The Results: Team morale is greatly improved. In addition, turnover has even decreased by 5% as well as showing marked improvement in other key areas.

Originally established as a mail order business by Robert Laidlaw in 1909, Farmers Deka Ltd is now New Zealand’s largest department store chain and a treasured national icon.

In 1998, the company was busy restructuring its hierarchy and operating structures and writing new manuals to accompany the changes. From a human resources perspective, Farmers Deka was at a crossroads and needed a significant overhaul.

Allan Nicholson, general manager of human resources at Farmers Deka, was no stranger to the business when he signed on. Having worked in a similar capacity some years earlier, Allan was given a deceptively simple brief.

“My task was two-fold-to improve customer service and to ensure Farmers Deka was providing the best team training in the retail sector. In effect, we wanted to reassert our preeminent position as the industry leader,” says Nicholson.

For some years, the company had relied upon its Management Development Centre (MDC) to provide direction for middle and senior level executives. However, Nicholson saw that while the MDC provided a good evaluation of employee skills, it did not follow up with a professional development program.

“We were good at identifying weaknesses, but not so good at building strengths. What I felt was missing was a structured, professional development program that nurtured and grew each of our team members.”

“I also discovered we had senior managers with fantastic operational knowledge but limited leadership skills. And, these people were in leadership positions. Clearly, the situation had to change,” Nicholson said.

In recent years, Nicholson had been instrumental in introducing The Ken Blanchard Companies^® Situational Leadership^® II (SLII^®) to Morgan & Banks, New Zealand.

“At Morgan & Banks, I saw first-hand, the astounding results of SLII. When considering how to proceed with Farmers Deka, it was a nobrainer. I went with SLII,” Nicholson said. It was clear to Nicholson that Farmers Deka had to change their culture from a management to a leadership-driven approach. It was for this reason, they opted to train all management in SLII before committing to Situational Self Leadership (SSL) courses for the rest of their team members.

“It was a cart and horse argument to a certain extent. I knew from experience that team members, having gone through SSL, would be asking more of management. And, it would be important to ensure that management was already equipped with the leadership skills to oblige. Therefore, we chose to put all management through SLII before rolling out SSL through the rest of the company,” Nicholson said. In tailoring their programs to suit Farmers Deka’s needs, Blanchard International Group New Zealand also agreed to accredit key Farmers personnel in the teaching of both SLII and SSL. As a result, eight Farmers regional training managers are now qualified to train their fellow team members. The initial SLII training session was also attended by the managing director, Wayne Walden and general manager of operations, John Milford.

“This has been a key factor in our ensuing success—buy-in from the top level of Farmers Deka management. Their belief in, and support of, both SLII and SSL has meant they are actively monitoring customer service levels and attributing success to the new culture being built through these training programs,” Nicholson comments.

To date, over 90 percent of Farmers Deka’s 450-strong management team have completed SLII training. And, 1,000 Farmers team members (one-third) have completed SSL.

“Perhaps the most important change has been in team morale. We now have team members actively seeking out senior management when they visit stores telling them how the company has changed and how much happier they are as a result. Staff turnover is also down by about five percent,” added Nicholson.

Although the Blanchard training continues, anecdotal evidence already suggests a marked turnaround in a number of key areas in the Farmers Deka business.

“Our people are responding very positively to the leadership model and productivity is definitely improving. Managers are also showing a far greater willingness and ability to adopt a variety of leadership styles, depending on the task and team member undertaking it. This in itself is a major step forward as many of these same people were skeptical of their ability to change,” Nicholson said.

Farmers Deka has further reason to be proud of its initial success with SLII and SSL. A nationwide audit of customer service levels in stores around the country has shown a marked increase in quality.

“At around the same time we began SLII training, we also contracted an independent company, ‘Shop ‘n Chek’, to audit Farmers nationwide customer service levels. This involves a ‘mystery shopper’ visit to each of our 65 Farmers brand stores on a monthly basis. From the original benchmark assessment, each and every store has improved in both quality and quantity of customer service delivery,” Nicholson said.

“Obviously, the real fruits of our labor will only be known in say, five years time. However, to have achieved such a dramatic shift in culture in a little over 18 months is a very good start indeed,” said Nicholson.

Management estimates indicate the Farmers brand currently holds a one-third share of New Zealand’s total department store market, equivalent to approximately 6.5 percent of total retail sales.

Farmers currently employs about 3,300 people or 2,700 full-time equivalents. In excess of 600,000 customers enter Farmers stores each week and over 250,000 transactions are made.

Formed in 1988, Deka is a convenience merchandise retail chain that became part of Farmers Deka in 1992. Trading in 63 stores, Deka currently has about 7.8 percent of the New Zealand department store market and 1.6 percent of the total retail market in its own right.

Deka employs about 1,700 staff or 1,100 full-time equivalents and serves a approximately 220,000 customers per week.