Reducing Store Theft: My High-Stakes Decision

Crooks stole from a $1B retailer.

So we let them.

How to reduce store theft (& how I learned high-stakes decisions): pic.twitter.com/wRhwbCXtd7

— Brian O'Connor (@BrianFOConnor) March 18, 2023

It’s 2017.

My consulting partner promises the client we'll get theft to 3% of revenue.

That's over $100M

Why do we allow 3%?

I had the same question (I'll explain in a sec)

Along with 100 other questions: This was my first project.

And I'm about to learn I'm in over my head

— Brian O'Connor (@BrianFOConnor) March 18, 2023

I just came from GE's aircraft finance business.

I was top of my class in their training program.

So I joined consulting confident I'd be a top performer.

I was about to find out how wrong I was.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

The partner starts drilling the 5 of us around the conference room.

"What variables should we use for this model?"

I wonder what the model looks like and my peer interrupts with 3 drivers.

Woah. She was way faster than me.

Partner asks another question:

— Brian O'Connor (@BrianFOConnor) March 18, 2023

"What was the 4th point the exec had at our 2PM meeting?"

2PM? I can't remember the meeting.

BOOM. Another peer already has the point highlighted on his computer.

I swallow hard.

How is everyone this smart?

I hadn't met people like this before.

I start to sweat.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

My manager sees the look on my face and fills me in on the project.

"Okay 3% theft:

Imagine you want 0%

You'd need everything locked up

But customers don't buy if it's a pain to get

So we reduce theft without affecting revenue

We choose what can be stolen"

Here's how:

— Brian O'Connor (@BrianFOConnor) March 18, 2023

We build a model that figures out:
→ Which products to lock up
→ Which employees are likely to be stealing
→ Which stores need more theft prevention

But it’s a short project. Only 3 months.

So we’re moving fast.

So if I can't keep up soon, I get booted off the project.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

Next day, we're back in the room with the partner.

He's asks me to build him an Excel model on which products to safeguard.

FINALLY. Something I can do

My bank job made me an Excel model junkie.

Or so I think.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

2 hours later he pings me, "Can I see it?"

...

I thought he wanted it by end of day! I panic.

He looks over my shoulder. I hear him swallow, hard.

Then asks my manager to speak in the hallway.

More panic.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

He manager tells me they're giving me one more chance.

But I need to be faster.

He explains basic skills I need for high-stakes decisions:
→ Problem-solving models
→ Communication
→ Speed

I study all night to upgrade my skills

And brace myself for the partner the next day.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

The partner asks me to build a model:
Which employees are likely to be stealing.

Nail this model and I can keep doing strategy work.

Miss this and I get kicked off the project.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

I sit with the data guys in Boston.

We have 100M+ transactions (from 9,000 stores).

We look for weird patterns that suggest an employee could steal.

Example:
If the last transaction an employee makes every night is cash.

We find 100+ patterns.

Now we test.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

I pick the top employee our model thinks could be stealing.

Then, call their store manager.

He gets off the call and goes to speak to the employee.

Now we wait.

I sit in silence. Sweating.

An hour later my phone rings.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

"Woah. I can't believe he was getting away with it!"

I exhale. Shocked this model worked!

I call the partner.

He's ecstatic.

We roll out a bunch more tests.

And one after another we keep finding employees stealing.

Now we share with the client.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

We submit our recommendation on how to reduce theft:
→ By employee
→ By product
→ By store

We watch revenue impacts as our suggestions roll out.

No impact. [exhale]

And...

Theft drops.

Just below 3%

— Brian O'Connor (@BrianFOConnor) March 18, 2023

After that project, I focused on revenue.

I advised 30 other Fortune 500s on how to differentiate and grow their revenue.

But small businesses can't $200k on experienced teams to differentiate their business.

I want to give you access to our methods for free.

— Brian O'Connor (@BrianFOConnor) March 18, 2023

My mission is to even the playing field for founders & small business owners.

So I share tips to differentiate your business to build a raving customer-base.

Join 13,105+ others here (for $0):https://t.co/imaQtrmDAL

— Brian O'Connor (@BrianFOConnor) March 18, 2023