By Patricia Cumbie - From the July-August 2008, Vol. 8, No. 4 issue.
At the beginning of every big undertaking, especially a retail expansion project, many questions naturally emerge, the foremost and most practical one is this: how will the process be managed? Since every development is different in scope and size, project management is not one-size-fits-all. General managers have taken different routes to managing their co-op’s growth and expansion projects—from doing it themselves to hiring from within or finding someone outside the co-op to do it. No matter where an expansion might fall on the spectrum, it’s critical to make an informed decision about how the project oversight role will be divvied up.
Now more than ever, planning for how to handle the details of an expansion is critical. The cost and complexity of expansion projects has increased the level of financial risk as well as putting more stress on co-op capacity. Denise Chevalier, project management consultant for CDS, said, “Expansions need more study and focus than they once did. The cost of the expansion makes the stakes really high post-expansion, and that in turn means that there’s greater pressure to be prepared throughout the organization.”
Not only are site and building costs going up exponentially, especially now, there is also what Chevalier calls the “complexity of efficiency.” For example, if you want to source and install cost-effective equipment systems or enhance information technology as part of a project, thorough planning leading up to implementation is vital.
Chevalier said people often ask her, “What’s the most intense part of a project?” and she said that barring unforeseen problems, systems design and equipment acquisition is the most labor-intensive phase. Chevalier said these issues in particular usually compel general managers to get outside help or advice because it’s typically not their area of expertise.
“There’s already plenty for the general manager to do to prepare the organization for the expansion, much less oversee the facility, equipment and systems infrastructure. It’s very time consuming,” she said. “You could spend a lot of time looking for people to ask questions of, as well as figuring out the right questions to ask.”
Chevalier also believes there is a perception that a project manager needs to have a construction background, she said. That certainly can be useful, but more than that, she said, is the need for someone with good communication and assessment skills, and a fierce attention to details. She asserts that successful project management involves leadership skills, including team-building and planning, as well as an understanding of the construction process.
When Chevalier consults with expanding food co-op retails on designing a plan of action, she asks them to consider not only budgetary factors, but the co-op’s capacity. “Often the expansion is a one-time thing for the manager. How much time do you want to spend getting up to speed?” she asked. Is it realistic for the general manager to consider project management in addition to ongoing responsibilities and planning for post-expansion? How much management talent, depth and flexibility does the co-op possess? Could someone take over some of the general management functions while the general manager takes on this phase of the expansion process? Or could the management team as a whole assume most of the general manager’s responsibilities for day to day operations? The answers will help determine how to proceed—whether it means hiring a project manager or supplementing their own capacity with project management support.
Chevalier is emphatic that every project has different needs. As a general rule, though, any project with a total budget of over $1 million should consider experienced professional support. Chevalier said that as the price tag goes up, it is definitely more “cost-effective and nerve-effective” to get the right level of assistance and advice from an experienced source.
Gail Graham is the general manager of Mississippi Market, in St. Paul, Minnesota, and is seeking to relocate their second store with a newly constructed building of 10,000 square feet, projected to cost $4.8 million in an up-and-coming area of town. Graham feels a great sense of urgency as Trader Joe’s is opening soon in her trade area, and she wants to minimize costs, which she expects will continue to rise. The co-op hopes to break ground this August.
Graham’s given a lot of thought to how she’s going to build her expansion team, and is planning a project management team method of hiring a construction adviser and bringing in Chevalier and CDS for equipment research and procurement, as well as training and assistance. “I’m working to keep it a manageable project,” she said. She’s optimistic she will be able to stay on top of the details of the expansion but does know that one of her greatest challenges will be ramping up the co-op’s information technology systems. She plans to hire a new position for the co-op but also “augment that with higher expertise” as necessary. In addition she said, “I’ll be talking to my peers. That adds a lot of value to my project.”
Francis Murphy, general manager of Neighborhood Food Co-op in Carbondale, Illinois, also said co-op sector resources were a saving grace. He headed up their store’s 12,000 square foot expansion and relocation three years ago on what he called “a shoestring budget” of $1.5 million. Murphy fully managed their expansion project as the co-op’s merchandise manager stepped in as interim store manager. Nonetheless, it was a full-time job and then some, but he knew it was a temporary situation, and the co-op’s budget demanded it.
Murphy said he “really enjoyed the work” but also found it “enormously stressful.” He ultimately felt able to handle it, in part because of the co-op’s three years of preparation. Another critical factor was that the financing came together fairly easily, meaning Murphy was able to focus on project management. For others in the same position, or considering their own project management, Murphy advised obsessive attention to detail. For him it was worth it. “There are not many opportunities in life to have this kind of impact on your community and co-op,” Murphy said.
Similarly, Graham acknowledges project management won’t be easy, even with all the resources at her disposal, but worth it for the results. “Our members want us to aspire to more. Once again co-ops will participate in building community and a local connection to food, not just for our present shoppers, but people who have not been exposed to who we are…we can impact the health of our community with this site.”