Retail Therapy

Based on research by Scott Sonenshein

• When workers solve problems by using objects for new purposes, their workplaces can get by with less money spent on infrastructure. 
• Encouraging this approach can inspire workers and compensate for a sense of limited resources. 
• It's up to managers to nurture this creative mindset. 

Academics who study workplace creativity often ponder whether workers are more inspired by limited resources or abundant resources. Rice Business Professor Scott Sonenshein asked another question: How do resources themselves shape an organization’s creativity?

To find out, Sonenshein headed to the mall: specifically, BoutiqueCo*, a retail company that sells clothes, jewelry and accessories at multiple stores. It was an excellent model for studying both big and small business, because it was vaulting from a modest family-run operation to a public chain valued at about $1 billion. 

Sonenshein analyzed BoutiqueCo at two distinct moments in its evolution. The first was between 1999 and 2010. For most of that time BoutiqueCo was a family-run business with about 80 stores, although the family did sell a minority stake in the company to a private equity firm in 2008. The second period was between 2010 to the present, after the family relinquished control of the company in 2010 when it sold most of the organization to a private equity firm.

During the family-owned phase, the owners’ lack of retail knowledge, of official managers and of access to capital prompted them to give extra power to their workers, encouraging them to see the store as their own. Peter, one of the owners explained that even if they’d wanted to control the other stores, they couldn’t. “We didn’t have the staff to do it. We didn’t have the resources to do it. We didn’t have the processes to control it,” he said.

This prompted the family to give the store workers far more autonomy than they’d normally have gotten at their level. Employees were free to tinker, try new strategies and solve problems on their own. A culture of creativity flourished — by necessity.

The family’s lack of resources also forced employee self-sufficiency. Left to their own devices, employees improvised new uses for display fixtures, including the merchandise itself. When a sheer cotton dress wasn’t selling, for example, a family member who was also a store manager snipped all the straps, rolled the frocks up neatly and marked them down to market them as beach cover-ups. They flew off the shelves.

Employees took similar liberties with store displays. Lily, an assistant store manager, told Sonenshein workers were allowed to experiment however they wished. “You can move the jewelry tables around, you can dress the mannequins. I mean anyone can do it. It’s the manager, the sales associates,” she said.

The unusual freedom did far more than save money. By allowing workers at the different stores to act independently and creatively, BoutiqueCo’s owners had money and attention to invest in opening more stores. 

The investor era ushered in a different mindset. Owners and employees knew more resources were available. Seasoned managers came onto the job. Yet BoutiqueCo stayed creative. How did they do it? By being intentional, Sonenshein discovered.

Despite the wave of new resources, managers purposely withheld fixed objects they thought might dry up employees’ creativity. Unusually for big retail chains, BoutiqueCo never provided a planogram, a data-based management tool mapping out where employees should place items for highest sales. Instead, because of their past success repurposing items and displays, the managers fed the workers’ gift for creative resourcing by offering some guidelines and an array of malleable objects they could use in multiple ways. 

Instead of dictating from above, the owners pushed employees to dream up themes or stories for their individual outlets and build displays based on these stories. The employees delivered. In one store, they fashioned a snakey, metallic necklace into an article clothing. Cinching the necklace around a floral dress, workers “topped the ensemble off with a solid cardigan, thin gold chains, and a straw clutch,” a store manager recalled. It became one of the season’s hottest trends.

Corporate managers also gave individual stores autonomy in fixing problems. They let each store have a unique look or personality, banishing the notion that all stores in a chain must be clonishly the same. The result: Employees created stores that catered to the niche markets in their area. 

BoutiqueCo’s story shows the power of boldly challenging employee resourcefulness, Sonenshein found. Giving workers a sense of ownership ⁠— not just in the businesses’ profit, but in its presentation and even survival ⁠— inspired more action from employee and higher sales. Not to mention a better use for that odd-looking necklace.

*Disguised name of company. 

Scott Sonenshein is the Henry Gardiner Symonds Professor of Management at the Jesse H. Jones Graduate School of Business at Rice University.

To read more, please see: Sonenshein, S. (2014). How Organizations Foster The Creative Use Of Resources. Academy of Management Journal, 57(3), 814–848.