Ed Stack stays close to his business to make Dick’s Sporting Goods better Featured

8:00pm EDT October 26, 2010

Edward W. Stack had all sorts of doubters when he suggested expanding his family’s business beyond its two stores in upstate New York. Even his father, the founder of what is today Dick’s Sporting Goods Inc., didn’t see a reason to grow.

But what Stack had that others didn’t was a vision to build on what was already a solid business.

“You’ll have a lot of people who won’t really share your vision and will tell you all of the reasons why it won’t work,” Stack says. “But if you really believe in it, you move forward anyway and find ways to make it work.”

That confidence in his vision helped Stack, chairman and CEO of the sports and fitness specialty retailer, overcome obstacles, such as moving the company’s main offices from Binghamton, N.Y., to Pittsburgh, taking the company public (NYSE: DKS) and expanding from two stores to a national business. As of May 1, Dick’s Sporting Goods had 424 stores in 41 states, as well as 91 Golf Galaxy Inc. stores in 31 states.

As the company has grown throughout the years, the vision has evolved and helped to create what is now a $4.4 billion company that employs nearly 26,000 people. Just as important as developing a sound vision is being able to clearly communicate the vision and being aware of when it needs to progress.

“If you don’t have a solid vision, you probably aren’t going to be able to grow profitably,” Stack says. “It isn’t any different than if you were going to jump in the car and drive from here to New York City. If you didn’t have a road map or a vision of how to get there, you wouldn’t get there.”

Communicate the vision

Although you might have a strong vision on paper, it’s not truly developed until it is clearly communicated to your employees and is being lived.

“There’s no silver bullet,” Stack says. “You need to do a number of things. You need to get out and talk. You need to give the ability to communicate through a Web-based communication function. You need to be able to get your message out with the people who are running the particular business areas for you. And you need to get feedback.”

The first step in making sure your vision is going to reach all of your employees is to outline an effective chain of command for communication and present the same message from multiple avenues. For example, Dick’s uses an intranet site to supplement direct communication about what is happening throughout the business.

You need to state and repeat a clear and concise vision for employees, but just as important is your ability to rely on your team to get that message out.

“If you don’t have an effective management team, your vision will never grow to the heights that you hope it can, because one person or two people can only do so much,” Stack says. “To grow a business from two stores to 500 stores takes a lot of smart people to understand the vision to make that happen.”

You need to make sure the roles of your management team are clearly defined when it comes to communicating anything within the company, and you need to have the right people in each of those functions who can speak about the vision. At Dick’s, the message is communicated from top management to district managers, then to store managers before it gets to store associates. But the message can’t be lost as it’s funneled through the organization.

Stack says it’s fairly easy to tell who on the management team understands the vision, has bought in to it and can articulate it — because they’re engaged and participating in the business.

“They live that aspect of being out in the business, of wanting to communicate, of listening, getting feedback of what’s right and wrong out of our business,” Stack says.

Just because you’ve set a vision and you’ve asked for it to be passed through the organization doesn’t mean employees don’t need to hear it from you.

“You need to constantly be talking about what the vision is, what the goal of the business is. You have to constantly communicate that and then you have to represent that vision. You have to follow through; you can’t say one thing and do another. It’s very important for whoever is starting a business that you have a clear vision and you follow through on that vision. You never ask somebody to do something that you wouldn’t do yourself.”

Stack’s commitment to the vision is shown by his presence in the company’s stores. He spends about five or six days each month talking with associates and customers in Dick’s Sporting Goods stores.

As the leader of the company, you need to be visible. You need to verbally communicate the vision to your employees, you need to show them that you live the vision, and you need to use that time to ensure the right message is getting to those who directly work with your customers. Stack uses his time in the stores to accomplish each of those tasks.

While you’re casually speaking with employees and customers, listen to what they’re telling you. In their comments, is there a separation between your vision and how it’s being executed? Other aspects of the business Stack looks at to test whether the vision has been clearly communicated are the appearance of a store and its sales numbers.

“If sales aren’t what they should be at a particular store and other stores in that region are doing fine, then you know you’ve got somebody who may not be doing his or her job properly,” Stack says.

You need to take the time to ensure that something so valuable to your business — your vision — is really being communicated and lived. If not, you need to examine where the disconnect is occurring. It may, in fact, start with you.

“If you’re having a difficult time communicating your message to your employees, the problem is probably with you, not your employees, which means you need to find a different way to communicate,” Stack says. “One of the best ways to find a different way to communicate is to go ask them. You need to ask the associates that you’re working with and say, ‘All right, this doesn’t seem to be getting across. What am I missing? What do you need from me to do a better job? What do you need from me to understand better what we’re trying to do?’ If the message isn’t getting out there, you have to look inward, not outward.”

Gather feedback

Just as you need to be talking with employees and customers to make sure your vision is clearly in place, you need to be out in your organization speaking with them to understand your business and whether the evolution of your vision is really meeting the needs of your customers. The final piece of communication is asking for feedback.

“If you’re in tune with your business, you’ll see things changing or modifying … that it’s time to reinvent your vision or to make some modifications to it,” Stack says. “You need to be aware of your surroundings and what’s going on in your business and what’s going on with your competitors and what’s going on in the marketplace.”

Stack uses that face-to-face time in the stores to really get a grasp on part of that equation, and it’s something he encourages all of his managers to do, as well.

“You need to talk to your customers, because without customers, you have no business,” he says. “You need to have information firsthand to understand your business. Your customers are the ones you’re trying to serve, so you need to get out there and talk to them.”

While in the store, Stack approaches the customers and asks them about their shopping experience to try to solicit feedback. You don’t need to make a grand to-do about who you are or what title you hold. Simply ask questions to understand how customers feel about your company — more specifically, what they think you’re doing right and wrong.

“What service are you not providing that you need to provide to keep those customers?” Stack says. “You can’t be afraid to hear bad news.”

Along with the customers, you need to be gathering information from those on your staff who directly communicate with the customer. Ask them what the customer is saying about your business.

“We’ve been able to create a level of trust with our associates out in the field that they are confident telling me or telling other members of my management team when things aren’t right,” Stack says. “They’re not afraid to deliver bad news. They know we’re not going to shoot the messenger.”

It takes time to build rapport with employees, but it’s something you need to do. The best way to build that trust is to show that you’re actually listening, that you appreciate their input and that they won’t be reprimanded for sharing negative information.

“You talk to them, and you listen to them,” Stack says. “Then you act on their suggestions or you come back and communicate as to why you can’t, but the communication doesn’t end when you leave. You can send the message to them that you value their opinion by fixing the problem that they have or you come back and say, ‘I understand your issue, we cannot make this change and this is why.’ After you’ve done that for a while, they get to understand you, they get to trust you and others on your management team. They’re only too willing to tell you what’s going on in the business as long as they know there aren’t going to be repercussions. We’ve developed that kind of a relationship.”

One of the ways in which Stack developed that relationship was by implementing a fun and engaging process that Dick’s dubbed the “stupid list.” He met with his store managers, told them to go back to their stores, share the idea with their staff and submit through e-mail three things they felt needed to be changed. No topic was off limits.

“I think it’s really simple,” he says. “Ask people for the things that you have them do that they view as not adding value. We did it as a fun thing.”

Gathering the feedback is just half the battle. The second part is analyzing. When you’re gathering information from so many places, you are not, obviously, going to be able to act on every decision.

“We looked at the 10 things that our associates indicated the most,” Stack says. “If somebody said, ‘This is a stupid thing,’ and we heard that 50 times and something else we saw was stupid but we got that three times, we went with the thing that we heard more.”

Don’t try to tackle the concerns and ideas presented by employees on your own. You need to involve individuals with firsthand knowledge of the reason for the process. Stack took the ideas deemed stupid to the management team that executed that portion of the business.

“If it has to deal with your buying group, you go talk to the people in your buying group and say, ‘These are some of the things (the employees) viewed that we’re doing wrong. How can we change that?’” Stack says. “You go right to the source and put somebody in charge of making those decisions.”

Once the decision is made, you need to follow up again with everyone and explain what decisions were made and why. Stack follows up with verbal and e-mail communication.

Remember, the purpose of gathering feedback is to better understand your company and find ways to help your staff execute on ways they can better serve customers.

“It’s a great educational tool for the CEO to see what truly is going on in the business,” Stack says. “I’ve tried to make sure that I’m not insulated from bad news, but sometimes people don’t want to tell the CEO bad news. This is a great way for you to get right into the heart of the business and see what’s right and what’s wrong.”

How to reach: Dick’s Sporting Goods Inc., (877) 846-9997 or www.dickssportinggoods.com