Industry View: Building a Culture of Success
On Dec. 10, 2013, iSee Store Innovations celebrated its third year in business. Coming from the corporate world to the world of small startup has been a great experience in learning what it takes to run a successful business.
Discovering what c-store retailers deal with daily has been an adventure: inventory management, forecasting, write-offs, hiring, payroll, product development and logistics are among the areas that have become part of everyday activities for this old beer salesman. Cash flow was never part of my daily concerns, but it sure is now! From a more strategic perspective, our focus is now the culture that we are building, which will ultimately determine our company’s long-term viability.
Great Culture Comes First
Former GE CEO Jack Welch, in a March 29, 2012, NBC “Squawk Box” interview, said, “Everybody in America has got to pay attention to the culture as much as the numbers. Great cultures deliver great numbers. Great numbers don’t deliver great cultures.”
Culture is critical to success, but how to manage it? In that same interview, Welch talked about how to drive culture: “Public hangings are teaching moments. Every company has to do it. A teaching moment is worth a thousand CEO speeches. CEOs can talk and blab each day about culture, but the employees all know who the jerks are. They could name the jerks for you.”
Walter Deming, in “Out of the Crisis,” his landmark book on improving business culture and performance, proposes 14 critical factors for success. Point 8 is to “drive all fear out of the organization.”
Contrary to Welch’s “public hangings” approach, Deming’s theory focuses on fixing the root cause as opposed to fixing the blame: “If your company strives for continuous improvement, better quality and higher employee morale, then fear must be removed from the organization. It prevents people from taking responsibility for their mistakes. Who admits a mistake if there is possible punishment? Next, employees start pointing fingers at other employees. ‘I didn’t cause that— he did.’ With pointing fingers, and not admitting mistakes, it becomes impossible to determine the root cause, which is critical to solving problems.”
In building great culture, how does one reconcile these two approaches? I turned to long time c-store friend Luis Chapa, the CEO of 7-Eleven Mexico. Luis offered an interesting perspective, suggesting that both approaches can be appropriate, pending the stage of your business. Poor culture, in the short term, can hide behind good numbers, and those “teaching moments” are important to have, even if severe and uncomfortable. Luis suggested that being a new, smaller organization offers the opportunity to build the optimal culture and that how you select your team in the early years is critical.
Building a Winning Team
John Mozeliak, the general manager of the St. Louis Cardinals, in a 2011 interview for this magazine reflected on the importance of selection and culture. “As we look at our talent acquisition to fill the pipeline, we have a character assessment. When you look at why you hire certain people, is it because they accept your wage? Or is it because they are the type of person you want for your company? The types of players we are trying to bring in here that we think will fit the mold that will uphold the standards this organization. Those players that seem to get it figure it out, not only on the field, but also the part of how important it is to be in St. Louis and how special it is. You see it with retention. Why guys want to sign contract extensions, why players want to come here—because it’s a great place to play.”
From my perspective, the iSee culture has to be rooted in passion for the c-store industry. The culture has to be one that is always looking at the challenges and opportunities that retailers are facing daily and how to offer relevant, executable solutions.
Developing a culture that people want to be part of is the ideal state, particularly when experts agree that great culture drives great numbers.