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

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

45 Entrepreneurs Share Advice: Been There, Run That

Red and blue fishes

It’s not possible to list all of Kay Koplovitz’s achievements, but here are a few highlights:

  • She is the Founder of USA Network.
  • She created the business model for cable networks.
  • She launched the Sci-Fi Channel in 1992.
  • She is the co-founder and chairman of Springboard Enterprises.
  • She was appointed by Bill Clinton to the bipartisan National Women’s Business Council.
  • She has served on numerous corporate boards ranging from Nabisco to Oracle.

So, after reading her recent book, Been There, Run That, I jumped at the opportunity to ask her some questions about her unbelievable career. Been There, Run That includes writing from 45 entrepreneurs who share wisdom on building and launching new ventures.

 

“Creating open teamwork is the best way to encourage innovation.” -Kay Koplovitz

 

Trailblazing through Innovation

Kay, I want to start by saying that I think of you as a business leader.  Your track record and results speak loudly.  But, I am reminded that you’re the first woman to found and serve as president of a cable network, and that makes you an inspiration to many women.  What unique challenges did you face as a woman?

More important than becoming the first women to head a television network, I created the business model for cable program networks, which is based on two revenue streams: advertising and licensing. It reversed the TV model of paying television stations to carry network programs. We collected a fee from the cable systems and also sold advertising. This is the reason so many cable program networks have been successful.

In many ways, you were trailblazing a path, opening up doors for women behind you.  Were you cognizant of that at the time?

Absolutely, and I believe I was a leader for men in the industry as well, as I preceded most of them. Throughout my career, I tried to provide opportunities for women to move up the management ladder. I co-founded Women in Cable, now Women in Cable and Telecommunications, to provide management training and the opportunity to learn to be great general managers. Today, WICT is one of the best training organizations in the industry.

After USA Networks, you turned to venture capital and found that over 95% of venture capitalists were men.  What have you done about this?

I co-founded Springboard Enterprises, a non-profit accelerator for women-led companies in technology and life sciences, in 2000. We are seeking to level the playing field for women-led businesses that need to raise venture capital. As of yearend 2014, we have brought 562 companies to market, 83% of which raise capital and 80% are in business today. Collectively they have raised over $6.6 billion, and 35% have had liquidity events, including 11 IPO’s. Readers can gain great insight from the advice of these wonderful entrepreneurs who contributed to Been There, Run That.

My two partners and I also are launching a for-profit Springboard Fund to invest in companies completing the accelerator program. We have many great companies: Constant Contact, iRobot, Zipcar, Minute Clinic, Viacord, and many more.

What’s the best way to encourage innovation throughout a large organization?

Creating open teamwork is the best way to encourage innovation. Give people permission to experiment by offering them both responsibility and authority to break rules for creative destruction and innovation.

 

“Invest in creating the right culture and you won’t be disappointed in the results.” -Kay Koplovitz

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.

12 Rules for Managing Your Employees As Real People

Vintage tin toy robot

 

Think your people are your greatest asset?

Do you survey your employees but ask the wrong questions?

Is corporate engagement one of your goals?

 

Widgets, FTE’s and Assets

What I think I love most about Rodd Wagner’s new book WIDGETS: The 12 New Rules for Managing Your Employees As If They’re Real People is his clear, unambiguous writing that calls it like he sees it. He upends common practices and wisdom, throwing out what you know and replacing it with what just makes sense. Our conversation is likely to change your position on a few subjects and have you rethink your practices. It did for me.

Why did you call the book “Widgets”?

If you spend enough time at enough companies, the bad terms used to refer to people start to accumulate. “Human capital.” “Full-time equivalents” or “FTEs.” “Headcount.” “Aprons” at a home improvement store. “Blue shirts” at Best Buy. I could barely contain my shock when leaders for one temporary staffing firm referred to the people they place as “inventory.” And the department responsible for people? In most companies, it’s called “Human Resources.” At one company, a mass layoff is called a “resource action.”

These are euphemisms, and euphemisms are most dangerous when used to refer to people, because they make it easier to disregard that we are talking about someone’s son or daughter, brother or sister, and they deserve the respect and dignity of being referred to as people. I used the title “Widgets” to take a hard whack at these bad habits and all the dehumanizing practices that flow from that perspective.

 

“Your people are not your greatest asset. They’re not yours, and they’re not assets.” –Rodd Wagner

 

Lather. Rinse. Repeat.

What is wrong with many employee engagement efforts today?

Employee engagement is in a rut. It’s become hackneyed. It’s routinized.

Commission a survey. Beg people to participate. Get the results back. Distribute scorecards. Train some trainers; unleash them on the company. Cajole the CEO into using the word “engagement” in his next speech. Ask managers to do some team sessions, which maybe half will do before tucking the forms in a desk drawer. Leave the way managers are selected, coached, supported, and held accountable untouched. Let the executives feel good that they checked the employee engagement box. Go quiet for 9 or 10 months until it’s time to start the Sisyphean cycle all over again. Lather. Rinse. Repeat.

JacketBut the most pernicious problem with engagement initiatives today is the way some consultancies and companies talk about the people who are neglected and, when the survey comes around, tell the truth. So-called “disengaged” employees are vilified, their motivations and character questioned. They’re said to be “more or less out to damage their company” or trying to undo what the more “engaged” accomplish. Our research contradicts these assertions that those who are most frustrated are some kind of “cancer” inside the organization.

Of course, recognizing that they will be suspect if they give low marks to their company, many employees have realized it’s career suicide to tell the truth. So they don’t. Who would under those circumstances? “Just mark five to survive,” one admin advised her colleagues. In many places, it’s now difficult if not impossible to even get a true measure of engagement. That’s the mark of a fundamentally flawed and broken system.

 

If an employee does not give high marks on a survey, look first at the manager, not the employee.

 

Inside the Head

Getting inside their heads is your first rule. It’s individual; it’s unique; it takes up significant time. And yet, it’s the most important of all. Would you share why this rule is the first?

I’ve been fielding and analyzing employee surveys and other data from more than a decade-and-a-half. Every time I plot the numbers on a new study, the first thing that strikes me is the massive range in individual responses. You simply cannot predict how a person will feel about his or her job based on generation, age, gender, race, tenure, industry, company, or any of the other group statistics that are used so often to stereotype employees.

Engagement is an individual phenomenon. Everything – how much money people want, what they consider a cool place to work, how they like to be recognized, what they envision for their future – is unique to that person. Therefore, applying all of the other New Rules depends on first understanding that one person and responding to his or her personality and ambitions. This is the reason that every good piece of research on employee engagement finds that a person’s direct supervisor is one of the key players. That manager is in a unique position to know the employee well and match him or her with the resources and opportunities inside the company.

 

“When recognition is common, employees develop resilience against adversity.” –Rodd Wagner

 

Best Friends at Work

Having a best friend at work appears in most surveys, and we repeatedly hear that it is critically important. You argue otherwise. Help us understand.

First, asking about friendships – particularly sticking your nose in an employee’s “best” friendships – is quite intrusive when the relationship between company and worker is increasingly transactional. One week you’re asking about their best friends, the next week you’re sending a few thousand of them home with severance packages. So if they either had best friends at work or were the best friends of someone still there, you’ve opened yourself to some well-founded criticism that you abused their trust.

More important, in the studies my teams and I have conducted, the “best friend” concept does not hold up well in driving results compared with more

business-related questions such as trust in leadership, perceived future of the company, and collaboration. Asking about those is your business and is better connected to your results than asking what The Washington Post once called a “high school” popularity question.

 

“Transparency tells people you trust them and you can be trusted.” –Rodd Wagner

 

What can a professor teaching more on the left side of the classroom teach us about motivating teams?