Outlook Leadership 2010

By  CSP Staff,

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A Perfect Landing: Sully’s Heroic Story

On the brink of fate’s final moments— the engines of Airbus A320 permanently disabled by a gaggle of Canada geese—a crew shepherding more than 180 passengers from New York’s LaGuardia Airport to Charlotte, N.C., knew death could be but minutes away.

Yet, deliberate and remarkably cool, U.S. Airways Capt. Chesley “Sully” Sullenberger, a stately former fighter pilot for the U.S. Air Force, analyzed his frustratingly few options, working closely in the cockpit with first officer Jeffrey Skiles and air-traffic control.

“We were well prepared and we also had a plan,” he said. “I knew I could land. … I knew which options were possible and, equally important, which options were not.”

On that frigid day in the middle of January 2009, Sully landed U.S. Airways Flight 1549 not on a tarmac or vacant field. Touchdown was sliding safely across the Hudson River in what shortly after would be called the “Miracle on the Hudson.”

Today, Sullenberger, a husband and a father of two adopted daughters, is voluntarily retired. He speaks about his experiences and lessons learned not from a vantage of hubris, but of teamwork, leadership and the practical application of life’s fundamentals to unknowable surprises.

His message is less about heroism or recounting moment by moment the stills of that afternoon of Jan. 15, 2009. The nearly four minutes of airborne uncertainty, for Sully, is a metaphor, a recipe for effective leadership and the value of living life in a methodical way that treasures fundamentals and dedication to the most menial of tasks. Because one never knows when stocking the shelves or mopping the floor will win a new customer, or greeting someone at the checkout counter may have transformed a shopper’s mood from grave to grateful.

“At the end of life,” Sully said, “we’ll ask [ourselves], ‘Did I make a difference?’ My wish is that for each of you, the answer will be yes.” —Mitch Morrison 


Big-League Priorities

In a panel led by CSP vice president and group editor Mitch Morrison, executives from The Pantry, The Parker Cos. and 7-Eleven discussed core survival tactics, including revitalization of brand, the pursuit of gross profit dollars and growth strategies.

Terry Marks, CEO of Cary, N.C.- based The Pantry Inc., told of his company’s intent to remake the chain’s image, uniting its network of 1,642 stores under the Kangaroo Express brand and anchoring its inside offer with its new Bean Street coffee program.

One of the issues facing The Pantry is the task of getting customers to “reconsider” its new offer as it rolls out through the chain. Despite competition from other c-stores and retail channels, Marks said, his chain has the ability to offer a quality product with service and speed. The Pantry undertook extensive research to pick the right product and presentation to make coffee the “hero” of its new campaign.

“We must create the environment where [new assets can become] accretive,” he said, “and we will introduce a model that will improve performance.”

Profitability is a key focus for Parker Cos., Savannah, Ga. Greg Parker, president of the 23-store chain, said focusing on gross-profit dollars is critical for assessing the success of his operations, especially with foodservice. “I don’t think people are as honest with their numbers when it comes to foodservice,” Parker said. “They say they’re doing well, but when you factor in costs like utilities and occupancy expenses, that might not be the case.”

Profitability is all about identifying what customers want, he said, pointing out that his locations tailor offerings to urban, suburban and rural environments. He also targets busy mothers, one of the tougher demographics to please. He does so in part because many other demographics also want what time-starved moms find appealing: cleanliness, freshness and safety. (For more on Parker, see p. 38.)

Darren Rebelez, COO and executive vice president of Dallas-based 7-Eleven Inc., talked about his company’s continuing intent of becoming fully franchised. Growth is definitely part of its game plan, with a goal of adding 2,000 stores globally by the end of 2010. The company’s current base of 38,400 locations is in only 16 countries. It currently has no operations in Brazil, India, Russia and many areas of China.

In the past, 7-Eleven’s growth model involved the parent company building locations and then finding a franchisee to run them. That’s expanding. Rebelez described a new paradigm called “business conversions,” wherein an existing operator would remodel and rebrand its c-stores to 7-Eleven. He said there are currently 200 of those.

All three panelists spoke of using technology to identify both fast- and slow-moving products to better address customer demand. Rebelez said its proprietary technology allows franchisees to “drill down” to identify what’s selling, which helps optimize the local product assortment, as well as leverages 7-Eleven’s distribution system to keep high-demand items in stock.

Another point panelists spoke of was the issues separating large and small chains. Parker said that sometimes being smaller means being more nimble: “Every decision you make is terrifying. But we are very focused on creating an exceptional experience. We talk to our consumers, our customer-service representatives, our managers, and we ask, ‘What can we do better?’ ” —Angel Abcede 


Verleger: Cash Is King in Current Recession

Forget the Great Depression of the 1930s. The Depression of 1873 has much more in common with the origins of the current recession and how it may unfold, said Philip Verleger Jr., president of PKVerleger LLC and a petroleum and energy market analyst.

Like the current recession, the Depression of 1873 was rooted in financial failure. While the construction industry suffered perhaps the greatest rise and fall in today’s economic malaise, the railroads took a similar ride in the 1870s.

The 1873 depression, meanwhile, stretched for six years. While “all economic cycles are not created equal,” Verleger said, the current recession, also rooted in financial collapse, will also be long, severe and have great aftershocks.

Therefore, while the c-store industry may be recession-resistant, its fortunes are directly tied to that of the construction industry, which makes up a large piece of the customer base. “Construction workers are your most loyal customers,” Verleger said. “You do have to worry about the out-of-work construction worker, who will be gone for years.”

The economist downplayed a “double-dip recession,” instead predicting several years of slow growth. High cr ude pr ices tied w ith lo w demand will continue to bleed the refinery business and trigger more bankruptcies and closures.

Verleger’s advice for survival? “My best answer is: Cash is king,” he said. “Minimize your exposure to debt. If locations aren’t doing well, they won’t be doing better next year—cut them.” In essence, focus on the most profitable locations and be ruthless about trimming the dead wood. “It’s not pretty,” he said, “but it seems to work in situations like this.” —Samantha Oller 


Tips to Grow On

  • The recession’s roots in financial collapse portend a long, hard slog.
  • The c-store industry’s fortunes are closely tied to that of the construction sector.
  • Preserve cash and whittle down to your most profitable locations to survive.  

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