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A tale of two retailers

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Ron Erickson, CEO of the Holiday Companies, explained, “This is why we’re in business.”

The context: Erickson was returning to the United States from Canada in a private jet. A useful privilege when you travel that way is avoiding long customs lines by re-entering the U.S. in such places as Fargo, North Dakota instead of a larger airport.

A potential inconvenience, though, is that if the local customs and immigration agent takes an interest in you, there’s no line to keep moving. So it was that the agent in question entered the jet and asked, “Are you Mr. Ronald Erickson?”

Not knowing where the conversation was going, Erickson answered briefly and in the affirmative. Nonetheless, the official continued his inquiry.

Except it wasn’t an inquiry. It was a sincere and effusive thank-you, to Erickson, for opening a Holiday Station Store in the area, telling him how much difference it had made for a lot of people.

A Holiday Station Store might not seem all that important, but to this guy it had become the place to take his son Sunday mornings to get pancakes, and to a lot of other people in the Fargo area, it was a place to go, get coffee, chat, and buy gasoline. In these and a dozen other small ways, the Holiday Companies had made a big difference in the community.

Which is why Erickson told the story to a meeting of his top store managers, who heard him explain, “This is why we’re in business.”

It’s worth noting that Erickson is a shrewd businessman, not a touchy-feely sort. He has no interest in the limelight but a lot of interest in the arcana of the petroleum industry.

The Holiday Companies is a keep-the-joint-running kind of enterprise — it started as a single grocery store in a small Wisconsin town and wins by being better than anyone else at the fundamentals: Choosing the right locations, optimizing its merchandise mix, keeping its operating costs under control, and hedging fuel costs to maximize margins.

And it innovates, constantly refreshing the whole concept of what convenience stores should be and how they should be run.

So when Erickson didn’t say that the point is to maximize profits — it’s to make a difference in the communities it serves — he wasn’t just grandstanding. He was explaining that this is how the Holiday Companies stays profitable.

Speaking of retail, my wife was shopping at a JCPenney not too long ago, when, after just a bit of small talk, a sales associate provided quite a sophisticated account of new CEO Ron Johnson’s ambitious and controversial strategy to redefine and reposition the chain, reducing the number of coupons, promotions, sales, and other special events that meant nobody ever entered a JCPenney otherwise.

Johnson, the sales associate explained, had decided that relying on an endless stream of gimmicks instead of solid merchandising was, in the end, a losing strategy, so he had to try something bold and different.

We have two CEOs, with very different styles and facing very different situations, who understand that being smart is never enough to lead a large organization. Not by itself.

Making sure everyone is smart about what matters. Making sure that everyone understands what you’re trying to accomplish, and why you chose a particular path … that’s what makes the difference between leading people and dragging them along.

Johnson probably faces the tougher situation. JCPenney has to redefine its customer’s expectations. That isn’t an instantaneous process, as Netflix found out last year, even if your strategy is the right one … and nobody ever knows if it’s the right one until hindsight has had a chance to replace foresight. Meanwhile, you’ll inevitably disappoint your customers in the short term. Which is why every sales clerk needs to understand why.

But Erickson faces the trickier challenge, because “Yes, of course we want strong profits — that’s why I want every employee focused on making a difference in our customers’ lives and communities, not on just making a buck. And no, this doesn’t mean you get an unlimited budget for it,” is a pretty subtle message.

Subtle, but smart, because for most people most of the time, knowing they’re making a difference is a lot more energizing than knowing they’re making one more dollar for the company.

Your take-home: If you hold a leadership position, think through how you help employees connect the dots between what they do and something that matters.

It helps, of course, if the company you work in does something that matters. Which it probably does, even if the company’s top executives have lost sight of it … something that, sadly, happens far too often.

And if it doesn’t do something that matters, I have a question:

Why are you working there?

Comments (3)

  • I believe you’ve mentioned them before, but Southwest Airlines fits squarely into this mold. As it’s been explained to me:

    Most companies focus on profit – the bottom line – although they invariably claim to be customer-focused. To the extent that customers really do matter, it’s largely when someone thinks “we don’t have enough of them” or “they don’t spend enough” or worse, one of them has a complaint (often due to that relentless focus on profit) that makes it up the chain to the top – where orders are barked down to fix it, or worse, heads roll. Employees are seen as costs and blame targets.

    Southwest, by contrast, makes no bones about it: they consider it a top priority to take care of their employees and treat them fairly. Their argument is that if the company takes care of the employees, the employees will take care of the customers, and the customers will take care of the profit. Of course, it’s really not that straightforward, and Southwest does focus on keeping costs low, but it’s not obnoxious about it and they don’t strip services out of what used to be included in a basic fare to charge extra for them. It’s not a surprise that even though they’re heavily unionized, management and labor are consistently able to negotiate contract amendments with little rancor and (if I’m not mistaken) no work stoppages or strikes in the airline’s history.

  • Two jobs, two answers: as an environmental chemist, I spent 20 years in industry prior to moving to government-I do see an opportunity every day to make the environment a better place to breathe and live. As an Orthodox priest, my entire life is an opportunity to make a difference in someone else’s…
    A grand article, Bob–kudos to both CEOs!
    Fr. Bob

  • That was a wonderful article.

    I work for a power utility and I realize that what I do can have an effect on the bottom line. I don’t work directly with the customers paying their monthly bill but instead with the dispatchers that literally keep the lights on. As such, I consider my job to be to maintain (my part of) the computer system and to provide tools that they can use to perform their job more efficiently and safely. I’ve been doing this for 30 years now and I still enjoy the work and enjoy the occassional kudos from them.


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