Market Basket Saga Offers Lessons for Building Employee Loyalty

The following was recently published in the New Hampshire Business Review.  It is about the grocery store chain, Market Basket, and how non-unionized employees — primarily management level employees — went out on strike to protest the ouster of their CEO by a slight majority of the Board of Directors.  This family owned company has been famous for their infighting.  As of the publishing of this article, the management team has been on walk out for three plus weeks.  Customers have been boycotting.  Millions of dollars have been lost by the company and the organization is about at collapse.  And still the Board won’t re-install the CEO to right the ship.  Talk about cutting off your nose to spite your face.  A shortened version of was published in the NHBR.  What follows is the entire article.

The new CEO does not know our culture”  Union Leader, July 28, 2014

There is likely not a business school nor a communications program out there that is not following the developments of the Demoulas/Market Basket crisis as it is unfolding.  To JJ&W, it is yet another illustration of how powerful corporate culture can be when it comes to the success or failure of an organization.

For those not yet aware of the events, the upper and middle management of the chain, headquartered in Tewksbury, Mass, walked out in protest of the ousting of their leader by the Board of Director’s, Arthur T. Demoulas, the long-term CEO and leader of one segment (slightly less than half) of the family of investors.  The management team, many who were fired but continue to protest, have taken the brunt of the punishment, encouraging hourly employees who need their jobs to pay weekly bills to stay at their post and not risk their jobs — a very different approach from typical strikes where the average employee is out on the street and middle management is working to keep things going!  

For many years, the Market Basket stores had been known as only one place to shop among many but nothing special; some perceived the family as tough to work for and a bit unfriendly.  There were always rumors of how the family was divided and internal fighting would go on from time to time but the stores just plodded along. About five years ago, the quality of the stores began to turn around.

The breadth and depth of choice in the stores improved.  The stores expanded and became interesting, more diverse in product offerings, and seemingly more focused on hiring locals – to the point that when you walked in the store, it seemed you always saw someone you knew that worked there.  For many teens, it was their first job, and it was clear that many of those who worked there made a career of it.  Name tags noted 2 year, 5 years, 10 years and longer.  It was not unusual to see employees who had worked there 20 and 30 years.  The employees were friendly, incredibly knowledgeable and always hard at work.  The stores became the core shopping destination for locals and visitors alike.  Other chains were in the process of condensing and closing, and Market Basket plowed ahead with expansions and redesign of stores.

What was it that made these stores so successful?  The employees would say (as the one quoted above noted) that the secret was in the culture.  Employees were an integral part of the team.  They were included in profit sharing and received good benefits.  But beyond that — and bigger than the financial perks — was the care, concern and attention the CEO paid to every store and the individual employees who worked there.  Arthur T. Demoulas was known for showing up at stores daily, and knowing not only the names of his employees, but the names of people in their families, and what was going on in their lives, etc.   He was the consummate relationship builder with employees and customers.  He did what every good CEO should do:  build a strong team to run the operations day-to-day and then go out and promote, innovate and celebrate the business. Arthur T. built such a loyal following and strong culture of care and commitment that this non-union employee base feels strongly enough about him to put their jobs on the line to get him back.  Point to another example of this kind of activity in an organization of over 25,000 employees.   And the commitment is contagious because employees transmitted the culture to their treatment of co-workers and shoppers.  Now customers are joining the boycott, making do elsewhere until the CEO is reinstated.

Organizations talk about their culture all the time — how important it is, how good it is — yet rarely do they take the time to actively engage employees. There are a lot of  corporate cultures out there that we would describe as “plain vanilla” – nothing special. There are certainly many examples of organizations who have not fostered a positive corporate culture, and it is backfiring – with serious repercussions on the bottom line.

Here’s a little secret; employees are pretty smart, and they can tell the difference between the organizations that walk their talk and those that say the right things but don’t follow with behavior in line with the values they declare.

To build a culture like Market Basket’s, to build a culture where your employees are as committed to success, take time, effort and attention to these core actions:

1) Clearly identify values and live them every day; demand the same of those who report to you and hold them accountable.

2) Run a communication system that conveys these values through every word and behavior —  top down, bottom up and laterally throughout the organization.

3) Establish a feedback system that is fluid, flexible and gets the job done.  It is the employee on the ground who knows best how to make things work most efficiently and effectively for the customer.  Take their advice!

4) Maintain an internal customer service delight mentality that delivers a team experience across the organization.  Instead of employees fighting for turf, for power, for control, for funds, they fight for the overall good and success — together.  Build your recognition and rewards programs to encourage teamwork.

5) Offer orientation and training that emphasizes the culture and holds people accountable for their actions.

A CEO and senior management team must be about supporting those employees on the front lines who are delivering the highest level of products and services and understanding that the team members, the employees, are the key to the organization’s success.  Once that is understood and acted upon, your organization may find it has cultivated the kind of loyalty that Arthur T. Demoulas has inspired.


CVS Uses Symbolic Act To Re-set Perceptions

CVS today (February 5, 2014) announced that they will no longer sell cigarettes or tobacco products in their stores.  That these products are not consistent with their role as a healthcare business.

Up till now these store, known as “drug stores”, “pharmacies” or other seemed more like a cross between a convenience store and a “walmart” type store.  With a business direction that now includes providing medical services along with medicines, a major shift in perceptions may have been required.  This may have done it!



A New Good “Bad” Problem?

Ripped from the headlines may be a new “problem” for the next case book!  Burger King franchisee, after years of tacitly letting little old ladies (80 years old on average) park for the day once a month in the lot while they carpooled to Boston for the symphony and museum afternoon, decided to post “customer only parking” signs (for scofflaw teenagers). Consequently, the ladies (8 of them) got towed on their next parking incursion ($100 a piece — was $187 but tow operator cut them a deal).

Calls from media to store got response —  “don’t know who owns business” . Calls to Burger King’s corporate offices — no response.   Ladies, when interviewed, remarked:  “We saw the new signs but have been doing this for years, besides parking lot is always empty!”   Local owner (he/she does exist) calls you in for HELP!  What do you do?

Chris Christie And His Bridge

The Governor of NJ, a possible presidential contender in the next election cycle, paid his own toll this week for controversial action taken by his staff over closure of a busy bridge for nothing more than political payback.

His comments have been both praised and panned. What would you have recommend he say instead or in addition? Should “bosses” be held accountable for what employees/staff do or say? Shouldn’t management be responsible for setting the tone and expectations of behavior in their workplace? How would you counsel him or any other public (or private) leader on this issue for their organization?

ACA/Obamacare: What would be your counsel?

The launch failure of the healthcare website was a huge hit to the confidence of the public. Now, as rollout begins of actual services, more problems will likely be encountered and highlighted by media and opponents. What would be your strategic counsel going forward? Why? How would you have re-aligned messaging early on if you knew what was to come? Can you “sell” benefits to get legislation passed and still keep expectations at reasonable levels?

Dunkin Donuts Presentation at PRSA (Yankee Chapter)

Sat through presentation by DD head of PR (read: publicity). Nothing is easy to promote but donuts have to be right up there on the ease factor. Just walk into a newsroom with dozens of donuts and coffee and wow! Got to have a new message with it as well — as Eddie Bernay’s always said: “Make news, not new releases” and DD has that down — even if it is just about National Donut day.

Organization chart of communications function shows a wider understanding public relations — incorporating public affairs, franchisee relations , etc. So why is the media relations department called “public relations”? Doesn’t this add to the confusion over what the public relations function is truly about?

New front in the tobacco wars

As the 50th anniversary of the Surgeon General’s report on cancer and tobacco nears (Feb. 2014), it would be easy to think that the war on tobacco was over and that health was the victor.

Like most easy answers, that assumption would be wrong.  There is far too much money involved for the tobacco industry to give up.  And, for the first time in a long time, Big Tobacco might have a new weapon:  e-cigarettes.

On the front page of USA Today Wednesday (9/4/13) is an excellent discussion of the inroads that so-called “electronic cigarettes” are making.  According to USA Today, six percent of all adult Americans have tried them, including 21 percent of smokers.  Some are curious.  Some hope to use the e-cigs to help quit the real tobacco; some want the buzz provided by the vaporized nicotine without the public hassle of smoking.

Regardless, the big three tobacco companies are now in the game with both feet.  Smaller, independents that opened the door are being brushed aside with massive ad buys and marketing clout of Big Tobacco.

So, one might ask, what is the problem? Isn’t the e-cigarette an “engineered solution” to second-hand smoke?  Isn’t the straight shot of nicotine better than having one’s lungs filter out all the tars and other gunk?  Doesn’t a person have the right to do just about anything so long as it doesn’t infringe on the rights of others?  Yes, yes, and yes.

But questions still remain.  What are the subtle goals of e-cigarettes?  Hooking more people on nicotine, especially young targets?  The big suppliers say “no” but they still make e-cigs in attractive flavors like vanilla, cherry and other candies.  To whom are massive ad budgets being directed?

State and local governments are looking at reduced revenues as sales of traditional tobacco decline, so will they want to tax e-smokes?  What will the FDA say?  Nicotine is nicotine, regardless of whether it is smoked or “vaped” which is what the street has named the process of using e-cigarettes.  The FDA is unlikely to yield its control over tobacco–something it only recently secured.

For public relations practitioners, this could be a fertile field. The court of public opinion is going to be vital in the decisions to be made about nicotine, vapors and such.  Shaping of perceptions is just now starting.  Behavior is beginning to form.  By the end of this year, e-cigarette sales could approach $2 billion.  This pales before the $80 billion in tobacco sales, but $2 billion is a bone worth fighting for.

Some initial questions need to be addressed before jumping into the fray.  What are the ethics of this dilemma?  Do people have a right to jeopardize their health?  Do e-cigarettes harm the body like tobacco does?  Do companies have an obligation consider  consumer ignorance or apathy when formulating a sales strategy?  Is that going on here?

The major tobacco companies are ready.  Governments and health-care providers take note.

So many cases have legal component — what does that mean for PR?

When attorneys get involved in an organization’s business — either by suing or being sued by someone — what does that mean for stakeholder relations?  Does the entire organization switch into competitive, win-lose mode?  Does PR remain in the mix speaking out for the impact on the organization’s reputation and stakeholder relations?  It takes trust from management, a solid relationship with your legal team, a previous discussion of the pros and cons of any legal approach to the real bottom line.  How many cases in this book (and other case books) seem to balance on what is happening (or potential to happen) in the court of law that sways decisions and therefore outcomes — and not in a good way?

Penn State Case Comes to Court

Penn State is about to explode again on the cover of newspapers, magazines and social media as the trial of key leadership gets underway.  Some have speculated that an acquittal in court of these top tier leaders would go a long way in rehabilitating Penn State’s reputation.  Do you think this is true?  What might Penn State need to be doing doing the trial to reinforce continuing supporters and perhaps woo back those who have left?  Should they worry about the “general public” perceptions if they aren’t potential students, parents of students, alumni, donors, academics or a myriad of other possible publics?