First I’d like to address our Unique competitive Edge – it’s what’s special about AE – and what sets us apart from others. But to truly understand the story behind our competitive edge. I want to spend a few minutes letting you see beyond the front doors of AE. Been w/company over 10 years. $200 M to over $2 B. Amazing years and some difficult times. Learned the most. Best processes evolved. Past 3 years this company grew up dramatically under the leadership of our CEO, Jim O’Donnell. His experience enabled us to balance the present w/the future, the focus and discipline w/flexibility. We now have a Corporate Vision shared by all employees at AE.
Speaking of Research…. Independent Research – Teen Research Unlimited Moved up 5 spots to fourth since 2000. We are in great company - behind only Nike and Sony and Abercrombie.
As a company, we are sharply focused on the future – and have spent the past year identifying our growth drivers.
The “Big Six” Near term – opportunity to expand the AE brand Longer-term – international and new concept – Martin+Osa
NPD Very proud From ’03-’05, leapt from just under 7% to almost 13%. #1! Using denim as a role model – applying what we have delivered in denim to other categories Denim 20% of our business. – we’re very proud of this – yet we have a balanced assortment. Leads to Destination AE
In a study by IBM & the Center for Retailing Studies, they found that the “person-to-person experience” is the most important factor of customer satisfaction in today’s marketplace. This graph shoes the significance of the person-to-person experience compare to the other elements of the total shopping experience. Need to change AE’s strategy to reflect this information Need to create stronger connections with our customers First step is to develop sales associates’ level of customer service
We see this at Pulte Homes as well – the company as a whole tends to dominate the market, this past year they had record sales, record profits, and record customer satisfaction. Thousands of employees take the survey at the same time at Pulte – yet there are significant differences among the 38 Pulte markets
2006 DISTRICT MANAGER CONFERENCE 2005 Year in Review — 2006 Financial Goals Chris Greco
Competitive Edge Coolest Brands: 12–19 Year Olds) Source: Teen Research Unlimited Fall 2000 Fall 2005 7% American Eagle 7% Pepsi 9% Coke/Gap 11% Tommy Hilfiger 11% Abercrombie & Fitch 13% Old Navy 14% Adidas/Sony 23% Nike Total Brand 6% Adidas 6% Old Navy/Pepsi 6% Coca-Cola 7% Hollister 8% American Eagle 9% Abercrombie & Fitch 9% Sony 22% Nike Total Brand
360 re-survey after 6 months to determine improvements and continued development focus
Program “Big Picture” Integrated Culture & Leadership Development Copyright, Five Star Development, Inc.
Group Working Sessions focused on AE, Region, Cross Functional Improvements Leadership 360 Survey
Personal Assessment and Action Planning recommendations
Re-survey after 1 year to determine improvements and continued development focus
Action Plans Field and AE-Wide Region Individual Field and AE-wide and Individual Region Strengths & Challenges Senior Executives and Emerging Leader Strengths & Challenges
The Denison Model ─ Review ADAPTABILITY Translating the demands of the business environment into action Are we listening to the marketplace? INVOLVEMENT Building human capability, ownership, and responsibility Are employees committed, engaged, and bought in to our direction? CONSISTENCY Defining the values and systems that are the basis of a strong culture Have we created the systems, structures, and processes that enable our group to execute? MISSION Defining a meaningful long-term direction for the organization Are we providing direction?
An Impressive Start…. The best seen across the company! Are employees committed, engaged, and bought-in to our direction? Are we providing direction? Are we listening to the marketplace? Have we created the systems, structures, and processes that enable our group to execute? January 2006
For Those Who Thought It Impossible They Were WRONG!!! Flexible Stable Internal Focus External Focus
Even with all the good news, there are a few items that you will want to pay attention to so that you can ensure ongoing success
The Field sees being proactive, responsive, and learning from the internal customer as less important or valued than the external customer
Is this acceptable and what problems, challenges, or unintended consequences may this create?
Most research shows the link between customer satisfaction and employee satisfaction and so this is worth discussing.
The key challenge for AEO is staying on top of your game and sustaining growth. Push to ensure mechanisms that:
Keep an intense focus on direction, strategy, staying on top of the internal customer and external customer/market.
Share and leverage leading practices , continually engaging and developing employees and connecting that to strategy.
Consistency scores are very high which can obviously be a good thing. Make sure that you do not get too comfortable with excellent execution. Push yourselves to ensure that you do not become too willing to compromise, and view natural conflict of ideas and strategies as a negative and not being a team player.
How skilled are you at constructively disagreeing with each other and at managing conflict?