Tuesday, September 15, 2015

The Power of a Bonded Organizational Culture

With onset of fall here in the Northeast US, I find the changing seasons to be a time of inspiration and reflection.  Last evening I attended a lecture in our local library.  Grant Welker, co-author of the recently published book, We Are Market Basket, gave a small turnout of about 20 people a 30 minute synopsis of an unusual event that happened here in the Northeast a year ago and occupied the news wires daily for over two months—a local family owned supermarket chain, Market Basket, was literally brought to its knees and to the brink of bankruptcy by a strong coalition of employees, customer, and suppliers—a bonded organizational culture.

The firing of Market Basket CEO Arthur T. Demoulas in the midst of a long-term family feud catalyzed a management and rank-and-file employee walkout the likes of which have not been witnessed in decades.  The protest of the firing of the president and chief executive, Artie T. as he is commonly known, by a vindictive board controlled by his first cousin, Arthur S. Demoulas, and other rival family members started a chain reaction that effectively immobilized the business in just a matter of six short weeks—along with a 90% loss in sales revenues.  Suppliers also join the mini-revolution, refusing to deliver groceries and goods that left store shelves completely empty.  Some employees still worked during the walkout, but with nothing for customer to buy, many stored simply closed their doors leaving customer to go elsewhere.

How could such an employee rebellion have happened so quickly and so effectively within a non-unionized business?  The walkout severed the company’s supply chain and left its store shelves empty throughout the community for weeks as the Demoulas family struggled to resolve its 25-year feud over the management of the company.  How could so many managers and employees have put their jobs on the line and risked having their income severed for weeks all in the name of reinstating their beloved leader, Artie T?

The answer of course lies deeply within the culture of this nearly 100 year old business started by a Greek immigrant in 1917 in the city of Lowell Massachusetts.  A strong focus on employees and customers alike that began almost 100 years ago was sustained and nurtured over the generations by the Demoulas family and in particular Artie T himself.  Here’s a snippet of that culture to give you an idea.

Employees and even customers are treated like family.  Artie T. regularly visits every one of the 70 stores in the region—being visible, talking to employees and customers and often remembering their names and more. Market Basket is a $4B, 20,000 employee company just to give you a perspective here.  When you walk into a Market Basket, you’ll immediately see they are different than any of the other local supermarkets.  There are no self-checkouts—they want maintain frequent employee to customer interactions.  Managers wear shirts and ties.  Shelves are stocked during the day so employees can interact with customers, answering their questions, walking them to the right aisle and location so they can find their desired item.   There are no loyalty cards—the same pricing advantages are offered to all customers.  Their pricing is the lowest in the industry—enabled by a decided focus on function over form.  Profits are shared with all employees and they are among the more highly paid among the local supermarket industry.  There’s a lot more to know and it’s all in the book.

Upon the firing of the CEO, certain store managers that protested were promptly fired.  That started the ball rolling and many employees soon followed them out the door.  The solidarity and resolve among managers, employees, customer, and suppliers was unprecedented—return our CEO or we’ll bring this organization down—and that’s exactly what they did.  In the end, the employees, customer, suppliers—the bonded culture and community solidarity won out.  The board had no choice but to offer the company and the CEO position back to Arthur T. Demoulas.  Market Basket reopened, employees went back to work, suppliers delivered the goods and 90% percent of their loyal customers returned—along with many more new customers who had to visit a Market Basket if for no other reason than out of curiosity.  Today they are a thriving $4.5B company and opening new supermarkets across the region.

The interesting question to ask yourself here is this.  If the CEO of your company were to be unfairly dismissed, as Arthur T. apparently was, how likely would you be to risk your own position and continuous cash flow unless that individual was reinstated?  As a side note, the family infighting was something that had been going on for years and the reason Artie T. was fired by the board was that they wanted to divert the profits mainly to the shareholders, manage the company differently and in the process cut costs and people that would have led Market Basket down the road of mediocrity and being “just like all the other supermarkets.” Employees and customers saw that vision as a threat to what they had come to know and love—their leader, the people, the relationships, and the community they had built over 100 years. This is truly an example of an unwavering and a bonded culture.

I was fortunate enough to have worked for a company from 1984 to 1994 that had such a bonded culture—Zymark Corporation—at that time, a privately held venture capital funded company that began with the premise that culture came first.  It was a community that held employees in the highest regard and where customers ran a close second.  Stakeholders may have come last in that sequence but let’s be totally real and honest here—when you take care of your employees they’re more likely to super-serve customers and remain loyal to the organization.  That in-turn will generate repeat business, highly satisfied customers with a greater sense of loyalty, many of whom will serve as references for additional business.  Stakeholders will naturally reap the rewards of that model and that’s a model where everyone stands to win.  

I think back to that time in my career and I ask myself whether I would have risked my job and salary if our CEO had been unfairly terminated.  I truly believe that I, and many of my colleagues, would have acted exactly the same as those at Market Basket did.  I do wonder however how likely it is that this kind of event would ever occur again.   I welcome your responses to this along with any and stories you may have to share of experiences working within a bonded organizational culture.

Monday, July 13, 2015

The Discount-Revenge Cycle - and how to be a better communicator

Customer Experience encompasses a multitude of sub-disciplines and covers substantial ground in the world of business.   However, one specific aspect of Customer Experience that interests me in particular and is something I’ve been attuned to for years is the art of communication.   Those working within an organization where there is more than one employee, which naturally applies to just about everyone except for those one-person operations, will appreciate the ideas expressed here. Even those running solo independent businesses will also appreciate the opportunity this presents to them in terms of honest self-reflection.

During my time at Boston University where I was studying adult learning theory and instructional design, a professor introduced me to the work of George M. Prince who was the co-creator Synectics.  Synectics is a creative problem-solving process as well as the name of the company co-founded by George Prince.  The process of creativity was so interesting to me that I took a summer course with George and got to know him personally and thereafter invited him to bring some of his ideas around communication into the organization I was working for at the time.  It proved both educational yet surprisingly disrupting to the 20 or so employees that were invited to take part in a Synectics creativity session.

Sessions were recorded and what was discovered is that certain things will reduce the probability of a successful outcome, and the language we use to communicate is one of the more significant.  A discovery of this led to what is known as the Discount-Revenge cycle.  This is a relatively invisible yet dynamic process that has a great influence on people working together for a common purpose.  Essentially it goes something like this.

In a group setting at work with the common goal of coming up with some new ideas that will solve a customer experience problem, George hands a dry erase marker to Susan and says “Here, Susan why don’t you take notes so we can capture everything.”  Ideas start out slowly but eventually start getting generated and Bill enthusiastically jumps up and says “I think we should run a lost-business study to see why some customers are choosing to leave us” and then Mary chimes in very quickly and says “That’s too slow and isn’t going to help us get to the root cause very quickly.”  The conversation continues as suggestions are made yet Bill is noticeably quiet until Mary suggests “Maybe we should add a question to our relationship survey to see how likely a customer is to do repeat business with us.”  Bill jumps right back with “But we already ask them how likely they are to recommend us and if they are aren’t then they sure as heck aren’t likely to but from us again if that’s the case.”  Susan has been noticeably quiet in her role as scribe and has offered no suggestions at all during the meeting.

What we see happening here is a classic example of the discount-revenge cycle.  This is precisely what George Prince and his colleagues studied and were able to prove through repeated recording of sessions like this and from brain research which is that people are extremely sensitive to the slightest threat to meaningfulness.  Anything that is perceived as a discount will tend to generate a response in the form of either revenge (a come-back, or one-better) or a complete withdrawal. 

In this example, Bill perceives Mary’s response to his suggestion as a discount of his idea and awaits his chance for revenge by further discounting Mary’s later suggestion.  The two of them appear to have an inclination to keep the discount-revenge cycle going whereas Susan just quietly withdrew from participation in the dialog entirely after having been asked to be the scribe—something she likely perceived as a discount, albeit a slight one. 

According to the work of George Prince, any sort of slight or negative attention or lack of acknowledgment is enough to set the discount-revenge cycle in motion. Given the unlimited opportunities for such unintended discounts in the everyday operations of businesses and other organizations, the extent of defensiveness and lack of commitment by employees is hardly surprising.
What can we do individually help foster better communication in situations like the one described above?  Here are four fairly simple ground rules or best-practices—one’s that should be discussed and agreed to at the start of any meeting where problem solving and or creativity are required.

  1. All ideas need to be acknowledged and people need to feel validated.  Acknowledgment does not necessarily mean you agree with an idea. Until proper dialog and discussion has taken place, all ideas should remain on the table. No idea should ever be rejected out of hand, because to do so discounts the individual that offered it and starts the cycle of discount-revenge.
  2. Avoid using the word “but.”   But, literally negates what someone has just said or offered. “But we tried that before and it didn’t work,” is such a classic response that is sure to generate revenge or withdrawal by others.  Try saying “Yes, that’s something we did try before with little result, but maybe we can approach it differently this time.”  See the difference?  In the latter you are acknowledging the idea and validating the individual and leaving the door open to new options and ideas to actually make something work.
  3. Take ownership.  Avoid accusatory language that typically starts with the word “you.” A professor friend of mine recently told me that his graduate student said to him “You dinged me on my grade.”  This of course discounted the professor, made him feel like the perpetrator that did something unfair to the student.  Nothing could have been further from the truth.  In reality the student actually reduced his own grade himself by not completing a specific assignment on time and by not participating in class. 
  4. With any suggestion or idea, start by coming up with three positive reasons why it might be OK or a good idea.  Trust me, this can be a 100% effective practice.  Forcing out three good aspects to any idea is sure to create enthusiasm and perhaps even a bit of levity.  After that, instead of just coming up with three negative aspects of the idea, couch them in terms of problems that, if overcome, could help make that idea a viable idea or solution.  Now you’re using language that’s constructive and relationship-building instead of destructive and damaging to relationships. 
For more about the work of George Prince and the creative problem-solving process, consider among the following books he wrote on the subject.

·         The Practice of Creativity, George M. Prince, 1970, New York:Collier Books, Div. of Macmillan Publishing, Co. Inc.

·         Your Life is a Series of Meetings – Get a Good Life, George M. Prince with Kathleen Logan-Prince, 20021st Books Library, www.1stbooks.com