How to lead 23,000 employees during a crisis

How do you manage your staff during a pandemic of unprecedented magnitude? What doesn’t work at all in such a situation? One person who should know is Erich Harsch. As CEO of the Hornbach DIY group, he is responsible for 23,000 employees. How did his employees inspire him during the pandemic? Harsch discusses it all here in an interview and will go into more detail at the 71st International Retail Summit.

Eric Harsch

GDI: DIY was in vogue during the crisis. Which articles were in high demand?

Erich Harsch: There was a tendency for our whole range to be in demand as many people tackled projects doing up apartments, houses and gardens. When the pandemic started, paint was particularly popular at first. A lot of new interior and exterior decorating was obviously done. Then, as the weather got warmer, gardening supplies were added, right down to garden sheds, patio timbers and other building materials that are used to redesign outdoor areas. And of course, leisure equipment such as barbecues, pools, etc. became very popular. In the current year, we have been able to ascertain that the first embellishments have whetted the appetite for more. Even though purchases had to be made online more frequently due to the lockdowns, and although the significantly cooler weather in spring 2021 set other priorities – demand is still very high.

You are in charge of over 23,000 employees. Has leadership changed during the crisis?

Completely different communication methods and behaviours were, of course, necessary. On the one hand, the option of digital communication has become established and cultivated. On the other hand, due to the dynamic developments with constantly new conditions and regulations, it was necessary to coordinate much faster and more directly and to exchange ideas together. The idea of a ‘one-size-fits-all’ rule would not have worked at all. The leadership was well advised to generate awareness and a framework so that the locally responsible colleagues could quickly and easily take the right measures for their individual field of work on their own responsibility without waiting for any less suitable central instructions. The pandemic was a highly dramatic illustration of how important it is to rely on staff who think and act independently and to develop a corresponding culture of cooperation. Those who only started during the crisis were clearly at a disadvantage because such a ‘leadership model’ needs to be learned and, above all, practised so that it can take effect successfully.

Hornbach DIY stores without employees – will we see that in the future?

No, I don’t think so. The whole heterogeneous assortment with many large and bulky goods is not well suited for automated convenience for customers, even if automation developments can of course make sense in subdomains.

Many Hornbach DIY stores are located on the outskirts of cities. How will you get even closer to your customers in the future?

The reference to the product range also applies here. Many of our customers really appreciate being able to load the sometimes unwieldy products directly into their means of transport, which means that a stationary DIY store needs large areas with parking spaces, pick-up stations, etc. These usually exist in the periphery rather than in the city centres. We still have enough white spots on the map in our distribution countries where we can get closer to our customers. However, the development of these locations usually takes many years of planning and implementation and is often characterised by licensing issues or economic constraints. That’s why things don’t always move as quickly as would be desirable. But fortunately, there is our established online channel, with which we can be very close to the customer in every living room or office, so to speak.

What shopping innovation has excited you recently?

‘Click and collect’ is no longer an innovation per se, but the pandemic has given ‘reserve and collect’ a much higher significance and was used by many customers. I was enthusiastic about how the people at Hornbach made an effort to make this different type of service possible with very high volumes, and about how much creativity has arisen at individual locations to optimise the processes situationally and/or fundamentally in order to make them as convenient as possible for the customers.

Before you moved to Hornbach, you worked at dm-drogerie markt for many years. What can one industry learn from the other?

You can always learn something from each other. This applies not only to industries but to companies of all kinds, although of course two different forms of chain store retailing might have more similarities than, for example, a retailer and an industrial company. The legal forms also play a significant role because a listed AG has to fulfil special requirements that may not have such a high relevance for others. ‘Retail is detail’, and therefore learning and development areas can be found in all relevant retail processes. All of them have processes for checkout and cash management, all of them have big issues in logistics and merchandise management, all of them are developing their online channels, and all of them have customers and especially data about them that could be used better than it has been previously in the interest of the customers. And the big topics of the people who work with us and the leadership culture are of course also a virtually inexhaustible field. It is exciting to exchange views on this among non-competitors, and it often takes place on an as-needed basis. By the way, this already happened between Hornbach and dm when I was still at dm but already on the supervisory board at Hornbach.

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