The blogosphere and bookshelves everywhere are full of prescriptions for how to succeed in various endeavors. When it comes to business and investing, there is much useful information available along with a fair amount of nonsense. Unfortunately, most guides for success in business and investing are almost certain to fail for those who do not have the necessary life experiences to leverage the knowledge. In addition, sometimes, it is easier to have a guide for what to avoid.
Invert, Always Invert
Charlie Munger’s wit and wisdom are well known to Berkshire Hathaway shareholders who have the opportunity to listen to his views on a variety of topics for five hours each May in Omaha (and for an additional three hours to those who also attend the Wesco meeting the following week). Mr. Munger is known for advocating the inversion approach to problem solving. In Poor Charlie’s Almanack, a “must read” book for any serious investor, Mr. Munger cites the inversion principle advocated by a famous mathematician, Carl Jacobi:
The great algebraist, Jacobi, … was known for his constant repetition of one phrase: “Invert, always invert.” It is in the nature of things, as Jacobi knew, that many hard problems are best solved only when they are addressed backwards.”
In Mr. Munger’s Harvard School commencement speech, which appears in full in Poor Charlie’s Almanack, he uses the principle of inversion to provide students with advice on how to achieve a state of misery over the course of their lives. Obviously, by learning about how one can be miserable, such behavior can be avoided and the chances for happiness are greatly increased although not guaranteed.
How To Fail In Retail
In my neighborhood, there is only one supermarket within easy walking distance for the many residents who either do not have cars or choose to avoid the hassle associated with driving in the area. This supermarket, which shall remain nameless, is easily the most poorly run grocery I have ever observed. It retains business due to location but I have never met anyone who has positive things to say about the merchandise or service.
In this satire, which is a poor imitation of Mr. Munger’s inversion technique, I will set forth six easy steps for failure in retail inspired by my local grocery store:
Step 1: Obscure and Confusing Pricing
It is very important to make pricing obscure and confusing. Posted prices should only have an occasional relationship to prices actually charged at the register. During weekly sales that are widely advertised, try to avoid posting the advertised prices in a clear manner to confuse shoppers. Also, have strange terms and conditions that are inconsistent. Implement a loyalty card program but fail to ensure that the prices displayed at the register reflect the discounts. Try your best to train cashiers to enter the wrong code for weighed grocery items (for example, when a customer is buying regular bananas, enter the code for organic bananas instead.)
Step 2: Do Not Trust Customers
When a customer objects to an incorrect price that is rung up at the register, make sure that your cashiers are trained to immediately deny that there has been a mistake. If the customer insists, make a big show of locking your register so you can (slowly) walk to the shelf to check the price yourself. Do this even if the price difference in question is under a dollar. Take your time as you walk through the store to chat with co-workers. The other customers in line who are delayed will then exert peer pressure on the offending customer to think twice about protesting incorrect prices the next time. There’s no way the customer will dare to protest the next mistake!
Step 3: Keep a Sloppy Store
Make sure that the shopping baskets provided to customers are not cleaned. Ever. It is best to avoid mopping the floor except in cases of a customer spilling an item in which case the worker should publicly berate the customer prior to grudgingly cleaning up the mess. Don’t bother removing rotten grocery items from the shelves on a routine basis. It’s generally acceptable to fail to monitor shelves for expired dry goods. After all, it’s the customer’s job to check expiration dates – caveat emptor!
Step 4: Avoid Eye Contact and Smiling
Under no circumstances should any store employee greet a customer as he or she walks into the store or make eye contact. If you make eye contact, the customer may make a request of some kind which would be undesirable and could take away time from smoking, chatting with coworkers, or catching some well deserved sleep.
Step 5: Random Store Hours
The store hours posted on the door are only guidelines. If employees feel like closing up 15 to 30 minutes early, that’s perfectly acceptable. If a customer attempts to enter the store within normal business hours but once the employees have made a decision to close up early, they should be rebuked in the strongest terms and denied entry.
Step 6: “Soviet Style” Selections
Customers in America today are spoiled and expect way too much variety. It takes time and effort to provide this variety. And who needs three or four varieties of butter or milk anyway? If you run out of basic food supplies, not to worry. The customer can just come back later in the week when the next delivery is due. These spoiled customers should be happy with what they get!
While this is just a partial list, following the prescriptions outlined above should put you well on the way to failing in retail. Please note: Do not under any circumstances attempt this without ensuring that you have at least a minimum number of captive customers who cannot easily switch to competitors.