Towards an enterprising mindset in fuel retail

By Dr Beate Stiehler-Mulder, Norman Mafurutidze, Thea Tslepis, University of Johannesburg. Fuel retailers operate in a dynamic and highly competitive environment where a variety of internal and external factors combine to disrupt operations and erode profit margins. This environment is also characterised by regulated, open markets where profit margins are often affected by factors beyond the company’s control. Fast-moving and often complex environments are characterised by unpredictable fluctuations in supplier costs and government-imposed taxes.

Amid such volatility, fuel retailers must remain agile and adaptable to stay ahead of the curve and achieve sustainable success. This means they must be enterprising. Being enterprising means solving problems pragmatically; nowhere is this more evident than in the fuel industry. This means that retail employees need to be able to deal with change and respond quickly to new challenges. They need to be problem solvers and critical thinkers, able to find innovative solutions to the problems they encounter. This may contribute to a powerful interlocking system of different parts in the retailer, that can effectively and even aggressively respond to change.

A strong disconnect between employees and owners in the fuel retail industry poses a major challenge to achieving an enterprising mindset. This is according to a recently published report by the Wholesale & Retail Leadership Chair: Gauteng, entitled, Towards Enterprising Fuel Retailers. The report reveals that communication breakdowns and lack of employee training were among the major hindrances to the success of fuel retail businesses. The report also indicated that while some employees have undergone training in various areas such as fuel, safety, and customer service, there are others who have received limited training from their employers, and not much more than mere operational training requirements.

To address these challenges, we propose four ways in which fuel retailers can foster an enterprising mindset and take advantage of opportunities as they arise and address daily, weekly, monthly, and yearly challenges with agility, responsiveness and profitability. These need to more-or-less follow on one another, as some aspects are needed, before others can start.

1. Employee communication and training

According to the W&R Leadership report mentioned above, interviews with fuel retail employees revealed that the lack of communication with owners is the main cause of frustration and inefficiency at fuel retailers. However, if employees firstly don’t understand the business properly (see last strategy below), they might not make great suggestions; secondly, if constructive responses are not common, they won’t be encouraged to communicate or share ideas either. It is therefore suggested that fuel retailers start by investing in an open and safe communication environment, before embarking on the any training. If this is in place, the first suggestion is that fuel retailers identify those employees with potential (let’s be honest, not all people want to necessarily change or grow), and to then focus on training that promotes an adaptive mindset (welcoming small changes or improvements), improved communication, and problem-solving skills. Investing in employee development can be a cost-effective way in the longer term to improve business performance, as it may enhance employee retention, and eliminates the costly need to hire and train new employees. Improved problem-solving skills among employees can help them adapt to changes in the industry faster, which will contribute to business growth in the longer term.

2. Meaningful engagement

Fuel retailers need to engage with their employees in a meaningful and positive way. By engaging in meaningful and positive dialogue, fuel retailers can better understand their needs and expectations, which in turn can improve internal communication and collaboration. This helps bridge the gap between employees and owners, creating a more cohesive and productive working environment. A strong working environment will enable fuel retailers to better identify and respond to the changing needs and expectations of its stakeholders and develop innovative solutions that adds value to its customers and other stakeholder. Employee engagement also helps to build and support good relationships based on mutual trust, respect and shared goals, which ultimately transitions into higher stakeholder (especially customer) satisfaction and loyalty.

3. Constantly identify new opportunities

Fuel retailers should try to continuously identify and exploit new opportunities, especially because this environment is so fast moving and susceptible to change. One needs more than one egg in the  basket. Examples include exploring and expanding into new markets, or offering expanded products and services. This can help fuel retailers to increase their sales and grow their market share, and to diversify the business, leading to higher profitability.

4. Employee responsibility

Lastly, fuel retailers need to be more innovative and creative – allowing employees to make decisions and take greater responsibility for their work, as this can lead to more innovation and creativity from their side. Fuel retailers should encourage their employees to share ideas and reward them for their contributions – constant positive reinforcement is key, in whichever fashion fits the business culture. This may lead to a culture of innovation where employees are constantly looking for ways to improve their value and contribution. Fuel retailers must also focus on explaining the flow of the business processes, the role and importance of each employee in achieving this, and the business and profit model – employees don’t always understand that the business is not an endless machine that prints salaries. Employees absolutely need to make the connection between their role in the system and the more important impact on the overall business system – educate them on this.

In summary, an enterprising mindset is essential for success in the fuel industry. Fuel retailers that foster a culture of innovation and encourage their employees to problem solve will succeed in this challenging environment. This leads to greater efficiency, cost savings and better decision-making. Where possible, promote top performers, have a clear potential and future growth path that performers can chase or look forward to in the business. These strategies may be a good, proposed start to help break down the silos that often exist between employees and owners and improve overall performance. Being enterprising can only be achieved if the entire system works together like a well-oiled machine.

View the full report here:

Stiehler-Mulder, B., & Tselepis, T. (2022). Towards Enterprising Fuel Retailers. Wholesale & Retail Leadership Chair: Gauteng, University of Johannesburg: https://books.google.co.za/books?id=nyJkzwEACAAJ

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