New England has been watching a family feud better than any “reality” show could dream up; after years of in-fighting, Arthur T. DeMoulas was fired in June as CEO of Market Basket, a grocery store chain with 71 stores and 25,000 employees, by his cousin-led board of directors. What has happened since then will be the subject of management classes for years. Here is a sampling:
- Employees have held rallies at company headquarters, the latest with estimates of between 6,000 and 15,000 attending, protesting “Artie T”’s firing and demanding his reinstatement. Customers have joined the rallies wholeheartedly.
- Some store managers have signed a petition stating that they would resign if their boss was not reinstated or if the company was sold to an outside buyer.
- As I write this, the Save Market Basket Facebook page, in support of Arthur T., has almost 76,000 Likes. The Page started on July 12, 2013.
- Warehouses are full, as warehouse employees have refused to show up for work.
- Store parking lots are virtually empty, as loyal customers support the employees and Artie T.
As I listen to the ongoing saga every day and listen to the impact on virtually every grocery store customer in New England, I wonder about a boss so well-loved that employees across all levels, departments, and locations would walk away from their job.
- Arthur T. was known for treating employees, who are not unionized, very well, with good benefits, above-average pay and an employee retirement fund. Well, there are other companies who pay their employees well.
- One protesting employee remarked about Artie T’s business skills and said that profits doubled during his eight-year tenure as CEO. Again, there are many companies who have grown profits.
- Artie T. created a vision for the company: The customer comes first. Market Basket is known for fresh products, low prices and high levels of customer service, fulfilling that vision in every store. Thankfully, there are examples of fabulous customer service in virtually every industry so again, I ask, what would make employees walk away from their job, some held for decades, to support an ousted CEO?
The answer, it seems to me, is something every single business owner has the opportunity to give and to be: employees repeatedly say that Artie T cares. He remembers family member names, he asks how the kids are doing in school (and he remembers the school names, too); he attends employees’ family weddings and funerals; he congratulates team members for their accomplishments, able to cite specifics; he celebrates in store openings, talking with employees and customers and shaking hands, seemingly more happy to be in a store rather than an office. Employees mention their former CEO’s integrity, approachability, and generosity.
Arthur T. has shown employees how he wants customers treated by the way he has treated employees – with care.
Last week, Comcast won the award for worst customer service. The recording of a Comcast customer trying to cancel his service – only to be harassed for over 8 minutes by a Comcast agent – went viral, and needless to say Comcast has experienced a pretty tough week. While at first it seemed like an agent gone bad, Comcast has since confirmed that agents are financially incented to retain customers. While this agent certainly didn’t show much compassion, he was trying to do what his company rewarded him to do.
In my corporate days, I probably prepared more than 50 incentive plans, and while that doesn’t make me an expert, it certainly provides me with some lessons. This Comcast snafu reminded me of the most important lesson I learned from creating, then adjusting, scrapping, re-creating incentive plans:
Whenever you incent a person to do something, you are also dis-incenting them to do something else.
Here are a couple examples from my experience:
- A newly launched product was moving more slowly than we wanted. We created a short-term high-impact incentive to encourage our sales team to sell that new product. While sales of the new product increased, the sales team lost focus on the company’s bread-and-butter products and sales dropped drastically.
- Another incentive encouraged our team to sell longer-term service contracts over shorter-term contracts. Seemed logical. What we didn’t plan on was a longer approval cycle which delayed any service contract revenue coming in – short or long term.
As you can see, I most often stumbled by incenting sales of one product or service, or even a product line, at a different rate than others. If a sales rep knows they will earn $25 every time they sell product A, and $50 every time they sell product B, they will try for product B every time. Who wouldn’t? If any of your staff’s pay is performance-based, here are some pointers:
- The decision to award an incentive payment upon the sale or upon collection is often debated, and rightly so. Define your sales team’s role clearly; sales only? Do they have credit granting authority? Or, are they responsible all the way through collection?
- Be careful that your incentive structure does not put one employee against another. Having a maximum incentive pool can cause this; define the split to guard against too much competition.
- The most important question to ask with every incentive payment is this, and you must ask it every time: By encouraging a particular behavior by my employees, what might I discourage them from doing? You must think like an employee on this one or you will be caught off-guard again and again (trust me, I learned that the hard way).
I love incentive and performance pay, but just be sure that you are comfortable with not only what you are encouraging your staff to do, but also with the behavior you are discouraging. If you don’t believe me, just ask Comcast.
The idea of business systems often connotes large corporations, complicated flowcharts, and lots of money spent. For small business owners, though, simple systems can mean the difference between paperwork in the office or reading a book on the porch before dinner. Personally, I prefer time on the porch.
The other day I was chatting with a business owner about how her customers pay her, and I asked her why she had chosen to not accept credit cards. Her response was that her husband was encouraging her to grow the business bigger, but she was happy with it as it is. Funny – I hadn’t said a thing about growing the business, only about making her payment process easier. When I said, “Systems don’t necessarily mean bigger, they can just mean easier” it was like the proverbial light bulb went off for her. We chatted about implementing credit card processing to her business, and what it could change for her – namely, no more customer payment reminders (never fun) and more timely and reliable payments.
In the spirit of finding more time – whether it’s for summer fun, relaxing, or time spent on business tasks to grow your business – here are the top simple systems you can implement to add minutes, or even hours, to your day:
- Online or outsourced payroll processing;
- Credit card processing or Point of Sale (POS) applications;
- As an aside: If your employees rely on tips as part of their compensation, adding Square (www.Squareup.com) as a payment option will also boost their tips.
- Social media scheduling apps, such as Hootsuite (www.hootsuite.com);
- Scheduling applications for everything from home repair to landscapers and dog walkers;
- Financial dashboard data collection, most likely in your industry specific software.
There are millions of apps out there, and chances are if you have a task that consumes more time and frustration than you want, someone else has experienced the same and has built an app for it. Adding an app or a business process does not necessarily mean that you have to grow your business; it can just mean that you will have time better spent on a more meaningful task or some extra personal time. And, it does not necessarily have to be tech related – it could be a better system for opening mail, sending out correspondence, or contacting your clients. Before that can happen, your first step is to stop and recognize your business process pain points and then to define the priority (because you will have several points you want cleaned up!).
Yep, there’s a system for that.