January 29, 2007
Cashiers and Baggers Key to Acme’s Success
Take a visit to the headquarters of Supervalu’s Acme division and you will find many executives come from modest grocery backgrounds. In fact, the Cherry Hill Courier Post reports that 14 of the 16 executive offices at Acme are occupied by people who began their grocery careers as cashiers and/or baggers. That includes Judy Spires, the company president.
Ms. Spires is quick to say that her management of the company has been largely influenced by her career in stores. It was there she learned the value of making a connection with customers.
“I’d see the same customers and I enjoyed the relationships,” she recalled. “Mrs. Donaghy, Tuesday night, with six kids and two carts of groceries.”
Meg Major, fresh food editor at Progressive Grocer magazine, said Ms. Spires has a lot in common with many of the consumers who shop in Acme’s stores. “Judy has a keen ability to relate to the average shopper’s mind set,” she said. “She’s a working mom.”
Ms. Spires is also said to have the right touch when it comes to the company’s workers. The Courier Post article spoke of a recent visit Ms. Spires made to a store and her common touch with employees.
“It’s not something I consciously work at, it’s how I feel about these people,” she said. “I am truly appreciative of the hard work they do.”
Progressive Grocer’s Major said, “She exudes energy. She has an upbeat, positive personality that is very attractive in a leader.”
Another interesting aspect of Ms. Spires’ career is that she is a former member of the United Food and Commercial Workers (UFCW) union. Having that experience gives her a different perspective on doing business with the union than perhaps many other heads of companies do not.
Ms. Spires acknowledges that paying workers more and offering better benefits does put Acme at a disadvantage compared to non-union competitors when it comes to employee costs. On the other hand, she said, you get what you pay for.
“It gives us the opportunity to attract and keep the right people,” she said. “We believe in taking care of our people and giving them a good living with benefits.”
Discussion Question: Do retailers managed by those who have come up through the ranks have an advantage over those who have leaders with backgrounds outside the industry?
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I think that the sale of Albertsons to Supervalu is a great example of what can happen when you put a non-retail guy at the top of a retail organization. An IT background did not in any way prepare him for the job.
If he had been willing to listen to someone like Judy Spires, Albertsons might not have needed Supervalu.
There’s no doubt that internal advancement is a great way to grow a business. And there’s no doubt that diversity also helps grow a business. There’s no single best way to nurture or acquire leadership. If everyone could simply rely on promotion from within or MBAs or executives whose demographics match their customers, retailing would be a lot simpler business.
Working through the ranks definitely offers some advantages. The executive understands each facet of the operation. The executive can relate with the rank and file. The executive understands the needs and difficulties of each job function. Employees are also, at times, more willing to respond, and have great pride, in someone who was “one of us.”
Ditto on most of the above that working your way up the ranks provides the best management in retail. You will often see this in the successful privately held regional chains. Publicly held chains often have to opt for a celebrity CEO whose primary job is to sell the story to Wall Street.
Just as people have “personalities,” companies have “cultures.” Knowing a company’s culture from within is an intangible, but a benefit nonetheless. So often, people coming in from outside to lead an organization cause what I like to call a “disturbance in the force,” after a line in one of the best movies of the 20th century. By this, I mean they unknowingly take little missteps that go up against the existing culture and therefore they find it difficult to settle in, gain support and synergy, and achieve desired results.
If, for whatever reason, the goal is to CHANGE the culture, an outside hire is always required. If the goal is to go after such things as improving sales, developing a new line, overseeing expansion, etc. by building upon the company’s existing strength/reputation then an insider from the ranks is often more suited to the task, in my opinion.
Having retail experience should be one factor in whether a person will make a good leader of a retailing company. There are times, though, when other factors are going to be more important. Sidenote: Phil Lempert is hosting the “best bagger” contest on a live TV show at the NGA convention this week. It will be interesting to look back in 20 years to see if any of this year’s contestants are managing retail companies. Let’s make a note of it.
No. It is not necessarily desirable to have management reflect a “come through the ranks” approach to be successful. In fact, with the desire to have a broad perspective and multiple approaches to solving issues and concerns in an increasing complex industry, it is critical to have other backgrounds. Knowing an industry is important, but more so is bringing a diverse background to the company. Diversity is the basis to innovation, since this allows the company to enjoy the benefits of multiple backgrounds and the perspectives they offer. Without this, companies quickly become staid and offer a “business as usual” approach. Knowing great customer service or managing the logistics cycle is not unique to the grocery industry, many other sectors including computer, auto, and other types of retail have great successes with this.
I totally agree with most of the comments here about the values of diversity, risks of change, cultural value of promotion from within, etc. The piece I don’t see (either here or in the retail world) is a way to “train” a senior executive who did NOT come up from within to avoid the obvious cultural and practical traps that await them.
The ex-GE “severance kings” of recent vintage are terrific examples of the damage that occurs when the new leader walks everyone straight over a cliff, at least in part because they were more or less unaware of the practical execution challenges in their own organization.
I couldn’t agree more with Mel Kleiman when he says you get what you pay for in hiring retail talent. This makes the role of company executives (even the president) that much more important. They are the ones that set the tone and make a company what it is. Let’s face it, even if a company is paying 25-50 cents more an hour, there will be some attractive candidates that will go work elsewhere if they sense (or are told by a current employee) that the extra couple dollars a week aren’t worth it. Having a good pay scale and committed executive staff go hand-in-hand when it comes to recruiting talent.
Hands down it makes a difference, not in the talent level at the top of the organization but in the talent level at the entry and mid-levels of an organization. UPS is the classic example of a company that promotes from within. When employees at all levels know they have a chance to move up, it changes dramatically the performance level. More importantly as a company becomes known for promoting from within, it begins to change dramatically the type of person who is willing to apply for even entry level positions. The challenge to a company is they have to be willing to live by their convictions of promoting from within. When a company first makes the move to doing so, it can many times require them to spend significantly more on employee development than what they had been spending in the past
If those coming up through the ranks have been close to consumers and have learned about operations, they certainly have an advantage in managing the process. However, this advantage assumes that they have continued to stay in contact with consumers and have learned how to test and embrace new processes. Using experience from five years ago to determine how to compete in today’s marketplace won’t bring success unless managers know their consumers and are willing to test new ideas.
There is no clear single answer to that question. Like so much in the retail industry–and life in general–it all depends on the circumstances and the people. Rules, as we all know, are designed to be broken. In some cases, as this one, it’s probably better not to make a rule at all but to make decisions based on the best person for the job at the moment in time when the position is vacant.
Promoting people to senior management who have worked their way up through the organization is NOT a sure fire way to utilize personnel. Many people in businesses “forget” where they come from as they advance in organizations. A diverse mix of skills and talents INCLUDING people who understand the customers and employees like Ms. Spires appear to do is the correct recipe. If it was easy to do, all retailers would be successful.
It seems to me that the more critical issue is having store experience–not necessarily having spent one’s career within a single organization. After that basic requirement is met, then a more rounded path that adds other skills might be better than the intimacy gained in coming up the ranks.
Why not take a kid who spent her formative years bagging groceries, unloading trucks and stocking shelves, taking inventory and ultimately running a front end. Then give her an MBA and some time in a CPG marketing organization. Maybe she moves back into a buying role at a major mass or department store chain for a while. Then put her in a senior management role at a grocery chain, focused on consumer strategy. The key is to keep getting some operating experience along the way so you don’t lose touch with the store floor.
I agree with the posters–promotion from within is a great motivator and builds a great pool of talent. On the flip side though, when you see a shift from promotion within to hire from the outside, it can create some animosity.
Working through the ranks is great–provided it includes exposure to the new tools critical to retail success. A knowledge of IT is more useful in the long-run than understanding how to cut a case. Knowing both is optimum but case cutting isn’t a substitute for understanding how to maximize retail technology. Running a register is good experience, but it’s not the same thing as developing an expertise with Excel. And so on, and so on. Retailing has become much more sophisticated than it used to be and one of the casualties may be the idea of a homogeneous “bottom-up” trained workforce. Put me down in the camp that believes diversity is a good thing. A modern store needs people expert in any number of areas–including relating to the consumer. One size (training) doesn’t fit enough.
This is akin to the recent discussions about whether The Gap erred in appointing an outsider without extensive retail experience as its CEO (likewise Home Depot), or whether J.C. Penney admitted a mistake when it dismissed its COO because of her lack of experience managing stores. The easy answer is, “Yes, promote from within and make sure your senior executives have hands-on retail experience.” But let’s avoid oversimplifying: Making sure your management team is a mix of internal promotions and new blood from the outside is essential, as long as everyone embraces the culture and mission of your company.
There is no question that retail executives with store experience add extra qualities to their management expertise. Executives who came up through the ranks often end up visiting stores more frequently where they learn and interact with associates as well as customers. And they encourage other management executives to do the same thing and “get out of their ivory towers” to see the real world as customers and staffers see it.
There is no guarantee of course, but having previous retail experience can make for a more engaged and “human” company. Ms. Spires is an excellent example of that and it’s inspiring for others to see a woman at the helm.
For years, grocery, retail and hospitality have been the main point of entry for most young people into the workforce. This means that these organizations have two major opportunities. One: to help develop the work ethic of these new workers and two: they get a look at the best and the brightest before anyone else does. Those who are willing to identify these bright young people and give them an opportunity to grow will be the winners in the long run.
If you look at a recently published survey on what people want out of a job, two of the top four were interesting work and an opportunity to grow and learn new things.
Experience at the store level in dealing with the every day occurrences in retail, along with understanding how both customers and associates is invaluable in managing a successful organization like Acme Markets.
Many retailers have executives that understand the top down approach of dealing with the everyday problems, but lack the experience that allows them to understand how their decisions affect the day to day operation. Many successful retailers have corporate executives that have never worked a day in a store, but most are executives that care what the customer and their employees think. Acme is fortunate to have someone like Judy that understand both sides and that is one of the keys to their success.
I don’t think there is a clear answer. Yes, promotion from within motivates. Yes, it adds to company’s success. Yes, the leader garners immediate respect from having been there. But, let’s not underestimate the value of new ideas and innovation from someone on the outside. And, while I think a balance is best, the bottom line is the person.
Somehow, I believe Judy Spires would be successful in her current role even if she had come from the outside. She makes human connections. She builds relationships with her customers and her employees. That’s a big part of why she is a successful leader.
Certainly there are plausible arguments that promoting from within strengthens loyalty and dedication and is more likely to produce leaders that are “grounded” with the day-to-day knowledge of their business, but it is not a guarantee that individuals that succeed through the ranks are right for the job and responsibilities they are given. It is more about the person; their leadership, interpersonal savvy, strategic agility and motivation skills. Likewise, the success of the company is more about teams of people than just one individual and whether or not they came from within or outside. As mass retailing becomes more complex with fragmented competition and more knowledgeable consumers, it is imperative that retail leaders have a clear vision of what they want their companies to be (and can succeed at), define their customer, all the while gaining internal support for the big picture and the capital to deliver the tactical situations.
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I think that the sale of Albertsons to Supervalu is a great example of what can happen when you put a non-retail guy at the top of a retail organization. An IT background did not in any way prepare him for the job.
If he had been willing to listen to someone like Judy Spires, Albertsons might not have needed Supervalu.
There’s no doubt that internal advancement is a great way to grow a business. And there’s no doubt that diversity also helps grow a business. There’s no single best way to nurture or acquire leadership. If everyone could simply rely on promotion from within or MBAs or executives whose demographics match their customers, retailing would be a lot simpler business.
Working through the ranks definitely offers some advantages. The executive understands each facet of the operation. The executive can relate with the rank and file. The executive understands the needs and difficulties of each job function. Employees are also, at times, more willing to respond, and have great pride, in someone who was “one of us.”
Ditto on most of the above that working your way up the ranks provides the best management in retail. You will often see this in the successful privately held regional chains. Publicly held chains often have to opt for a celebrity CEO whose primary job is to sell the story to Wall Street.
Just as people have “personalities,” companies have “cultures.” Knowing a company’s culture from within is an intangible, but a benefit nonetheless. So often, people coming in from outside to lead an organization cause what I like to call a “disturbance in the force,” after a line in one of the best movies of the 20th century. By this, I mean they unknowingly take little missteps that go up against the existing culture and therefore they find it difficult to settle in, gain support and synergy, and achieve desired results.
If, for whatever reason, the goal is to CHANGE the culture, an outside hire is always required. If the goal is to go after such things as improving sales, developing a new line, overseeing expansion, etc. by building upon the company’s existing strength/reputation then an insider from the ranks is often more suited to the task, in my opinion.
Having retail experience should be one factor in whether a person will make a good leader of a retailing company. There are times, though, when other factors are going to be more important. Sidenote: Phil Lempert is hosting the “best bagger” contest on a live TV show at the NGA convention this week. It will be interesting to look back in 20 years to see if any of this year’s contestants are managing retail companies. Let’s make a note of it.
No. It is not necessarily desirable to have management reflect a “come through the ranks” approach to be successful. In fact, with the desire to have a broad perspective and multiple approaches to solving issues and concerns in an increasing complex industry, it is critical to have other backgrounds. Knowing an industry is important, but more so is bringing a diverse background to the company. Diversity is the basis to innovation, since this allows the company to enjoy the benefits of multiple backgrounds and the perspectives they offer. Without this, companies quickly become staid and offer a “business as usual” approach. Knowing great customer service or managing the logistics cycle is not unique to the grocery industry, many other sectors including computer, auto, and other types of retail have great successes with this.
I totally agree with most of the comments here about the values of diversity, risks of change, cultural value of promotion from within, etc. The piece I don’t see (either here or in the retail world) is a way to “train” a senior executive who did NOT come up from within to avoid the obvious cultural and practical traps that await them.
The ex-GE “severance kings” of recent vintage are terrific examples of the damage that occurs when the new leader walks everyone straight over a cliff, at least in part because they were more or less unaware of the practical execution challenges in their own organization.
I couldn’t agree more with Mel Kleiman when he says you get what you pay for in hiring retail talent. This makes the role of company executives (even the president) that much more important. They are the ones that set the tone and make a company what it is. Let’s face it, even if a company is paying 25-50 cents more an hour, there will be some attractive candidates that will go work elsewhere if they sense (or are told by a current employee) that the extra couple dollars a week aren’t worth it. Having a good pay scale and committed executive staff go hand-in-hand when it comes to recruiting talent.
Hands down it makes a difference, not in the talent level at the top of the organization but in the talent level at the entry and mid-levels of an organization. UPS is the classic example of a company that promotes from within. When employees at all levels know they have a chance to move up, it changes dramatically the performance level. More importantly as a company becomes known for promoting from within, it begins to change dramatically the type of person who is willing to apply for even entry level positions. The challenge to a company is they have to be willing to live by their convictions of promoting from within. When a company first makes the move to doing so, it can many times require them to spend significantly more on employee development than what they had been spending in the past
If those coming up through the ranks have been close to consumers and have learned about operations, they certainly have an advantage in managing the process. However, this advantage assumes that they have continued to stay in contact with consumers and have learned how to test and embrace new processes. Using experience from five years ago to determine how to compete in today’s marketplace won’t bring success unless managers know their consumers and are willing to test new ideas.
There is no clear single answer to that question. Like so much in the retail industry–and life in general–it all depends on the circumstances and the people. Rules, as we all know, are designed to be broken. In some cases, as this one, it’s probably better not to make a rule at all but to make decisions based on the best person for the job at the moment in time when the position is vacant.
Promoting people to senior management who have worked their way up through the organization is NOT a sure fire way to utilize personnel. Many people in businesses “forget” where they come from as they advance in organizations. A diverse mix of skills and talents INCLUDING people who understand the customers and employees like Ms. Spires appear to do is the correct recipe. If it was easy to do, all retailers would be successful.
It seems to me that the more critical issue is having store experience–not necessarily having spent one’s career within a single organization. After that basic requirement is met, then a more rounded path that adds other skills might be better than the intimacy gained in coming up the ranks.
Why not take a kid who spent her formative years bagging groceries, unloading trucks and stocking shelves, taking inventory and ultimately running a front end. Then give her an MBA and some time in a CPG marketing organization. Maybe she moves back into a buying role at a major mass or department store chain for a while. Then put her in a senior management role at a grocery chain, focused on consumer strategy. The key is to keep getting some operating experience along the way so you don’t lose touch with the store floor.
I agree with the posters–promotion from within is a great motivator and builds a great pool of talent. On the flip side though, when you see a shift from promotion within to hire from the outside, it can create some animosity.
Working through the ranks is great–provided it includes exposure to the new tools critical to retail success. A knowledge of IT is more useful in the long-run than understanding how to cut a case. Knowing both is optimum but case cutting isn’t a substitute for understanding how to maximize retail technology. Running a register is good experience, but it’s not the same thing as developing an expertise with Excel. And so on, and so on. Retailing has become much more sophisticated than it used to be and one of the casualties may be the idea of a homogeneous “bottom-up” trained workforce. Put me down in the camp that believes diversity is a good thing. A modern store needs people expert in any number of areas–including relating to the consumer. One size (training) doesn’t fit enough.
This is akin to the recent discussions about whether The Gap erred in appointing an outsider without extensive retail experience as its CEO (likewise Home Depot), or whether J.C. Penney admitted a mistake when it dismissed its COO because of her lack of experience managing stores. The easy answer is, “Yes, promote from within and make sure your senior executives have hands-on retail experience.” But let’s avoid oversimplifying: Making sure your management team is a mix of internal promotions and new blood from the outside is essential, as long as everyone embraces the culture and mission of your company.
There is no question that retail executives with store experience add extra qualities to their management expertise. Executives who came up through the ranks often end up visiting stores more frequently where they learn and interact with associates as well as customers. And they encourage other management executives to do the same thing and “get out of their ivory towers” to see the real world as customers and staffers see it.
There is no guarantee of course, but having previous retail experience can make for a more engaged and “human” company. Ms. Spires is an excellent example of that and it’s inspiring for others to see a woman at the helm.
For years, grocery, retail and hospitality have been the main point of entry for most young people into the workforce. This means that these organizations have two major opportunities. One: to help develop the work ethic of these new workers and two: they get a look at the best and the brightest before anyone else does. Those who are willing to identify these bright young people and give them an opportunity to grow will be the winners in the long run.
If you look at a recently published survey on what people want out of a job, two of the top four were interesting work and an opportunity to grow and learn new things.
Experience at the store level in dealing with the every day occurrences in retail, along with understanding how both customers and associates is invaluable in managing a successful organization like Acme Markets.
Many retailers have executives that understand the top down approach of dealing with the everyday problems, but lack the experience that allows them to understand how their decisions affect the day to day operation. Many successful retailers have corporate executives that have never worked a day in a store, but most are executives that care what the customer and their employees think. Acme is fortunate to have someone like Judy that understand both sides and that is one of the keys to their success.
I don’t think there is a clear answer. Yes, promotion from within motivates. Yes, it adds to company’s success. Yes, the leader garners immediate respect from having been there. But, let’s not underestimate the value of new ideas and innovation from someone on the outside. And, while I think a balance is best, the bottom line is the person.
Somehow, I believe Judy Spires would be successful in her current role even if she had come from the outside. She makes human connections. She builds relationships with her customers and her employees. That’s a big part of why she is a successful leader.
Certainly there are plausible arguments that promoting from within strengthens loyalty and dedication and is more likely to produce leaders that are “grounded” with the day-to-day knowledge of their business, but it is not a guarantee that individuals that succeed through the ranks are right for the job and responsibilities they are given. It is more about the person; their leadership, interpersonal savvy, strategic agility and motivation skills. Likewise, the success of the company is more about teams of people than just one individual and whether or not they came from within or outside. As mass retailing becomes more complex with fragmented competition and more knowledgeable consumers, it is imperative that retail leaders have a clear vision of what they want their companies to be (and can succeed at), define their customer, all the while gaining internal support for the big picture and the capital to deliver the tactical situations.