For Grace, the management-evaluation system is a way to communicate his corporate objectives. If he wants everyone to concentrate more on selling products, for example, he can make that a category in the evaluation form. If he's having a problem with cash shortfalls at the shops, he can increase the bonus points that managers earn for cash accuracy. The evaluation forms and the weights given each category change as needs and problems change. The forms are revised at least once a year under the direction of Grace's wife, Jose, who joined his executive-management team five years ago.
Grace always needs managers. At any given time he'll have one or two out on maternity leave and a third planning to move away. So he designed a multistep development program to encourage his best stylists to stay with him for the long haul. If a stylist does well on the floor, she can become a shift manager, with a 40¢ hourly raise and responsibility when the manager is off the floor. The next step is assistant manager, worth 75¢ an hour more, and responsibility for hiring, training, and evaluating the receptionist, just as the manager does the stylists. If she still likes the idea of management, she can join the apprentice program, spending one day a month for six to eight months going shop to shop, watching Malie troubleshoot.
It's a simple program, requiring only that the shop managers agree with the concept. It costs nothing more than a few days of salary for an apprentice or a modest raise for shift and assistant managers. But it has enabled Grace to make most of his promotions from within and know just what he's getting when he does. "We get to see people under fire," he says. "By the time we're ready to promote a manager, we've had enough interaction to know exactly where they're coming from."
That constant interaction, top to bottom year after year, is the company's greatest strength, as Grace best demonstrated in his campaign to boost product sales. In the two years since the program was formally launched, product sales have risen from less than 1% of gross to more than 10%, while contribution to net has soared from $20,000 to more than $300,000 today.
Product is a natural for Grace. Distributors for such lines as Paul Mitchell and Nexxus will warehouse and supply it, they'll provide trainers to teach the stylists to use it, and they'll organize trips for managers to shows to learn how to sell it. But Grace added his own management style, "a full-court press to get everyone to live, breathe, eat, and sleep product." He talked product all the time, in every meeting, every coaching session, and every phone call. "But I don't know how to sell," stylists would lament. "We don't want you to sell," he'd reply. "You're a professional. We want you to communicate about hair care."
Grace educated them formally as well, adding special retail seminars. He made retailing part of their evaluation process, worth 15% of their annual bonus points. For added incentives, stylists were given 15% on everything they sold, with checks for as much as $640 handed to them at each four-month review for maximum impact. He added contests, too, intramural and shop against shop: little ones, such as sell something, anything, every day for a month, and win a Supercuts T-shirt; and big ones, with receptionists competing for a trip to Palm Springs, stylists for a trip to Hawaii and an extra week of paid vacation, managers for a trip to Paris.
If you're a customer in one of Grace's shops, chances are, someone will sell you something -- if not shampoo or hair spray, then the brushes he imports on his own from Taiwan. If your stylist doesn't sell you a hair-care product, the receptionist or the manager will.
Beyond the repeated personal attention and the classes and the forms, every manager has her own favorite technique. Pam Beegle, manager of the Montclair, Calif., store, made product sales part of the ongoing "guest-service" campaign she developed. Glo Curci in Santa Monica takes a more competitive approach. With her eye on a trip to Paris, she organized a Let's Kick Ass Party at her house on a Sunday night, inviting all 27 staff members for pizza and beer and repeated exhortations to move product.
The one sure winner, month after month, is Grace's bottom line.
Today Grace is the Supercuts superstar. He's been elected to every board or advisory committee his fellow franchisees have, from president of the franchise association to the franchisee seat on the corporate board of directors. His franchisor praises him as "a pioneer" and now includes much of the Grace evaluation system and product sales program in the corporate package it sells.
But Grace's relations with his corporate partner have not always been smooth. They were selling franchises, after all, while he was selling haircuts. Like many franchisees, he went from the euphoria of early growth to mutual finger pointing when the growth slowed. Like most, eventually he was driven to join a franchisee association to try to guarantee what he considered his rights. But his conflict with Supercuts went much further than the conventional power struggle between franchisor and franchisee; it became a nightmare escalating to lawsuit and countersuit that would not be resolved until ownership of the franchisor changed hands. It was a classic education in franchising, repeated reminders of just how far apart the interests of franchisee and franchisor can be.
Grace's first lesson came early, in 1981. "How can you charge me $4.50 for this?" one customer complained, brandishing a bottle of Supercuts brand shampoo. "I can get it at Long's drugstore for $1.98." Grace was appalled himself. He was paying Supercuts Inc. $2.25 a bottle for the stuff. " 'We thought about telling you,' the corporate side said," he remembers, " 'but we decided against it.' "
