Leadership Lessons From the Unusual Story of Market Basket

We Are Market Basket

An Uplifting Corporate Story

We often read stories about corporate greed, about slimy executives, about profits at the expense of people. These stories grab headlines because they hit a nerve and fuel anger. I have never read a story quite like We Are Market Basket: The Story of the Unlikely Grassroots Movement That Saved a Beloved Business where employees and customers joined together to demand the return of a fired CEO.

The story may be unique, but it offers powerful lessons and insight into the changing nature of how we view corporations and what we expect as employees.

I recently spoke with the authors, Daniel Korschun and Grant Welker, about this story.

 

Loyalty is Demonstrated Every Day

This story has so many powerful lessons. One of those is about loyalty. What does the We Are Market Basket teach us about loyalty?

Arthur T. and much of the senior management team have been extraordinarily successful at engendering loyalty. But loyalty at this company tends to be viewed as a two-way street. Employees – they call themselves associates – we speak with tell us that they feel loyal to the company and top management because they feel a loyalty to them from that top management. So what we see at Market Basket is people who are reaffirming their commitment to each other over time. The result is these very strong bonds we see. The lesson for managers is that you can’t expect loyalty without making a sacrifice yourself. You’re not going to gain loyalty just by changing the pay or the job responsibilities; it’s something that has to be demonstrated every day.

 

“You can’t expect loyalty without making a sacrifice yourself.”

 

A Respect for Others

Why did Arthur T. inspire such passion and loyalty?

Arthur T. is beloved as the CEO largely because he gives all associates, customers, and vendors respect. He says explicitly that no one person is special at the company, and from what we’ve seen he walks the walk.

But it’s also important to point out his place in the protest. Bringing back Arthur T. was the central demand of protesters, but in our view, they were fighting to save the company’s culture. Reinstating Arthur T. became the critical step in making sure that this New England institution continued to serve those who have known it for years, and sometimes for generations.

Market Basket 

A Lesson for Boards and Corporate Leaders

What does the Market Basket experience teach boards of directors?

Most business schools today teach that the fiduciary responsibility of directors is to look after the interests of shareholders. However, this idea is simply not supported by the corporate code in Massachusetts and many other states. The code states explicitly that the board is to be a steward of the corporation, which includes customers, employees, shareholders, and others. We need to hold our boards to this higher standard.

Leadership lesson: A corporation’s duties extend beyond shareholders to the broader community.

 

A Commitment to the Community

Lead INSIDE the Box for Efficiency and Effectiveness

How Leaders Can Be More Efficient and Effective

Last year, I was reading the dramatic account of a hard-charging executive who suffered a heart attack. The post was about the need for balance, but it was more than a wake-up call.  What struck me about this post, however, was not the lessons he taught us from his painful experience, not the, “Oh, I hope this doesn’t happen to me” feeling we have when reading these posts, but the name of the hospital he went to. It was here in Dublin, Ohio!

 

“A leader’s job is to help people move to a position of improved performance.” –Figliuolo / Prince

 

That meant that one of the people who regularly shares my posts and vice versa lived in my town. Social media amazes me. A quickly dashed off email and the two of us found ourselves in Starbucks where I heard more about his compelling story. I’m still amazed at how Twitter and blogging create opportunities like this one.

 

“Great leaders think about talent management every day.”–Figliuolo/Prince

 

Lead INSIDE the Box

20141017 LItB Cover V3Let me introduce you to Mike Figliuolo. Mike is the founder of thoughtLEADERS, LLC, a leadership development firm. He is also the author of One Piece of Paper: The Simple Approach to Powerful, Personal Leadership. His latest book was just released and was co-written with Victor Prince, former COO of the Consumer Financial Protection Bureau and now a strategy consultant.

We recently got together to talk about this book, Lead Inside the Box: How Smart Leaders Guide Their Teams to Exceptional Results.

Mike and Victor have built a powerful framework designed to help leaders be more efficient and more effective at the same time. It starts with the recognition that we, as leaders, are often overworked and not as effective as we could be.

  • Where am I spending my time?
  • With whom?
  • Am I treating each person the same when different approaches would create better results?

 

“Your leadership success hinges upon your ability to get people to perform well.” –Figliuolo/Prince

 

If I understand the “box” and apply the techniques correctly, I can be more proactive, more thoughtful, and more impactful with my team members.

20150410 Leadership Matrix

Light A Fire Under Your Business

on a fire in a fire-place it is possible to look infinitely, enjoying his heat and crackle of firewoods, nothing creates a comfort, as conflagrant fire so

Light A Fire

Tom Pandola and Jim Bird’s new book Light a Fire Under Your Business is unlike most business books you will read. The authors not only share practical business principles, but they do it through a combination of business and fire-fighting experience. Whether fighting a fire in a building or one ranging outside, these two veteran firefighters share their experiences and apply the principles in a clever way that gets your attention. Firefighting requires teamwork, flawless execution and commitment.

 

“Execution is everything.” –Jeff Bridges

 

I recently had the opportunity to talk with Tom about the book and his advice to build a culture and a team.  Tom Pandola is a director of communications in the air medical transportation industry. He is also a cofounder of  Third Alarm, a leadership consulting company. Pandola’s work experience includes 25 years with the Los Angeles City Fire Department where, as a fire captain and battalion chief, he tested inspirational leadership principles while solving problems associated with responding to fires, floods, riots, and earthquakes.

 

Build a Culture of Execution

How do you develop a culture of execution?

When something is happening, or not happening and falling short of the organization’s expectations, in this case execution, I have three steps that I take to zero-in on the cause of the problem.

 

“The result of bad communication is a disconnection between strategy and execution.” –Chuck Marin

 

 

Step 1: What process is currently in place?

Step one: I look at the process that is already in place. Does it provide our workforce with all that they need to execute properly and in a timely manner? If not, I would look at either developing a new process or just adjusting the current one to be more supportive of those involved.

Step 2: Are individuals empowered?

Step two: If a lack of execution is not found to be a process issue, then I will look at the individuals involved. Do they feel as though they are empowered and authorized to take the appropriate actions? Sometimes there has been a lack of communications or a miscommunication that causes people to feel less than accountable. I would correct whatever the issue that is found to be causing the lack of execution. This would include the last resort, which is to discipline individuals if it turns out they have made a conscious decision not to follow the process or to not take actions that they are authorized to take.

Step 3: Are behaviors infused in the culture?

Step three: This step gets to the core question about developing a culture of execution. When leadership continuously engages in process improvement and personnel empowerment, they are working on the culture of the organization. I believe that it takes leaders coming together to define the things that they believe will improve execution – and then work at infusing the desired behaviors into the culture.

light-a-fire-under-your-business-book-cover-m7b62gu1p2uq9gcqsb85om6482g63dcjbsklilnoryAn example from the fire service is the need to provide every member of the department with the right process and feeling of empowerment to get the right things done, for the right reasons, and at the right time. This is necessary because the fire service is a 24/7/365 operation, and the top leaders cannot be present when most of the work of their department is taking place. So in order to give the “right things” meaning, the leadership developed meaningful mission, vision, and values statements that serve to drive decision making at all levels of the organization.

This is the first step I recommend every organization take. Bring the leadership together and write a meaningful mission statement that defines, in the simplest way, your organization’s core purpose. This will provide your workforce with the basis for their thoughts and actions. Then write a vision statement that illustrates a desired future. This provides each individual the knowledge of executing their duties in a way that contributes to that vision. And finally, each work team should develop a set of values that they feel help them execute their unique duties with a high level of success.

 

Create a High-Performance Team

New Leaders – Get Good Information and Build Relationships

Customer Care Or Human Resources
This is a guest post by friend and mentor Bruce Rhoades, who retired after having run several companies. He often helps me with strategy. I am delighted that he is a regular contributor.

New Leader Challenges

Achieving a new leadership position is both rewarding and challenging. It acknowledges that you are someone who can make a difference, lead others and get things done. On the other hand, it is perhaps another step toward more responsibility and provides greater visibility of your actions and style.

Whether you are new to a department, new to a company or just received a promotion; the challenges are very similar. It is important to establish your style, values and culture effectively and quickly. As the saying goes, you only get one chance to make a first impression. So what are some techniques to quickly establish your leadership style and lead effectively?

Much of my career has been serving in interim executive positions or as interim CEO for various companies, where I often entered the organization as the “new guy” in charge. Here are the fundamental areas that I have found helpful for your initial focus to be an effective leader:

  • First Impressions
  • Information Gathering and Relationship Building
  • Open Communication
  • Decision, Delegation and Empowerment
  • Action and Accountability

In this post, I will discuss techniques for:

Information Gathering and Relationship Building

Open Communication

The techniques in these areas will establish the foundation to develop a culture of decisiveness, empowerment, accountability and action. I will discuss these attributes in a future post.

First Impressions

Whether you are in a new leadership role as executive, department manager, product manager, or team leader, people will watch closely to understand your style. A few of the things people will evaluate include:

  • Are you decisive? How do you make decisions?
  • How do you take action?
  • What do you tolerate?
  • Do you hold people accountable?
  • Can you be influenced? Will you listen?
  • Are you approachable?
  • How do you react to bad news?
  • Do you focus on big picture or detail?
  • Can you be put off, pocket-vetoed?
  • How do you deal with good or poor performance?
  • How do you think about customers; how do you treat them?
  • How do you gather information?
  • What are your values?

As the organization’s employees and customers observe these traits, it is important to remember: They will listen to what you say, but it is what you do that counts the most to establish culture.

 

“What you do, not what you say, is what establishes culture.” -Bruce Rhoades

 

So, where do you start? I suggest you initially focus on the following characteristics as the most important:

  • Gather reliable information
  • Communicate openly
  • Be decisive
  • Delegate and empower others when possible
  • Encourage action
  • Require accountability
  • Satisfy customers

To lay the groundwork for these cultural practices, you must first have good information, form relationships at all levels and communicate openly. The next two sections provide some techniques.

 

Information Gathering and Relationship Building

Before a new leader is able to decide, initiate action or communicate intelligently, he/she needs good information quickly. It is vitally important to have information from different perspectives and different levels in an organization. Just getting information from one person/place can lead to narrow, sub-optimized decisions. Here are some mechanisms to obtain good information and simultaneously form relationships:

  • Skip-Level Meetings: Go to department staff meetings at all levels of the organization, starting with your direct reports, if you are a manager. This also works for project team leaders. You may simply listen during the meeting, but a simple round table discussion also works very well. Popular questions are: what is working; what is not working; what is frustrating; what should we stop doing; what decisions are holding up progress?

 

“It is vitally important for leaders to have information from different perspectives and levels.” -Bruce Rhoades

 

There are several benefits to skip-level meetings. Not only do you get good information from “the front line,” but it is also a good place to find things that people can be empowered to fix, thus setting the tone for delegation, action and decisiveness. Two fundamentals: 1) Always listen and question; 2) Be cautious not to manage around the team leader.

  • “State of the Union” Meetings: These are short one-on-one meetings for a person to give you a summary of the situation for a group, team, department or project. It does not have to be a polished presentation, just a discussion from an outline that covers: priorities, issues, decisions needed and what to start, stop or keep doing. Basically, let the person tell you what they are doing, what is going well and what needs attention. Again, look for opportunities for decision and action.

The Real Reason Leaders Win: Return on Character

Blue Books Graph With Red Arrow

Cash or Character?

Not too long ago, I was asked to give a talk about organizational culture and why it matters. Before I walked up to the podium, one of the attendees cornered me. He wanted me to know his strongly-held position. In an emphatic tone, he nearly shouted:

“Skip, cash matters, not culture, not character, not creativity! Cash is the only thing you can spend.”

How fortunate that my slides started with financials so I could demonstrate the power of culture change. But, what I wish I had was the book that crossed my desk a few weeks ago:  Return on Character: The Real Reasons Leaders and Their Companies Win.  In the most comprehensive study of its kind, Fred Kiel reveals the research that proves that good character wins. We discussed his findings at length and I know many organizational leaders will want to study the results.

 

“Character is the tree. Reputation is its shadow.” -Lincoln

 

 

Studying CEO’s

Tell us just briefly about your study and its methodology. Where did you get the idea, how many CEO’s were involved, etc.?

ROC CoverIn 2005 I and my co-author, Doug Lennick, published a book entitled Moral Intelligence in which we claimed that highly principled leaders obtained better long-term business results than leaders who were not so principled.  The book has done very well, but shortly after it was published we received some pushback. One person said, “Fred, I know you like all of this soft stuff.  But let me give you a little lesson in economics.  The business model is what creates value.  If a business is profitable and makes a lot of money, all that culture stuff will come along with it.  And if it doesn’t, that’s not a big deal as long as management stays legal.  What you talk about is just icing on the cake.  It’s nice but not necessary.  And, besides you don’t have any hard data to back up your claim.”

This really got to me.  He was right about me not having any data to back up our claim that character matters – and that became the call to action for our study.

Over the next seven years we signed up 121 CEOs and their senior teams to participate.  Eighty-four completed the study, so we have complete data sets on these 84 CEOs, their senior teams, and their organizations.  Over 8,500 randomly selected employees completed our surveys about these CEOs and their teams.  We have nearly one million separate data points in our research base.  This is the largest study of this kind to date.

 

4 Universal Character Habits

How do you define character in the Return on Character (ROC) matrix?

We scoured the cultural anthropology research and discovered that humans all over the world share many common practices and beliefs.  Parents all over the world teach their children to tell the truth, keep promises, own up to mistakes, forgive others, and to care for people – at least in their tribe.  We added to this understanding the recent findings from the neurosciences and genetics to come up with our definition of character as it applies to leaders.

The ROC Matrix shows the four universal principles and the character habits that are aligned with these principles.

 

Copyright Fred Kiel; Used by Permission Copyright Fred Kiel; Used by Permission

Lincoln said, “Character is the tree.  Reputation is its shadow.”  Likewise, the habits we all have for how we treat other people is our character reputation.  That’s what we measured in our research – a leader’s reputation for how he or she treats people.

 

Probing the Leader’s Childhood

In several places in the book, you delve into the CEO’s childhood and upbringing.  Why?  What did you find?  Why is the CEO’s life story so important?

If you took the resumes and employment histories of high character CEOs and compared them to low character CEOs, you’d be hard pressed to see much difference. Both groups are competitive, driven to succeed, rational, high energy, and often wicked smart – they know how to command a room and nail an interview.

Where we started to see significant differences was when we surveyed their employees and asked about their behaviors around the 4 universal character habits – integrity, responsibility, forgiveness and compassion. So that begs the question – how did each group come by their different postures around these habits? Where did they get their beliefs about how the world worked and how to succeed in that world?

Turns out the clues are in their childhoods and upbringing.