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  • Learning from the Best

    Published on Monday, February 13, 2012

    Many of the great joys of writing my book came during the interviews I conducted with leaders at great workplaces. It was always refreshing to hear leaders speak so passionately about the people for whom they worked – all the people throughout their organizations.

    I was reminded often of the goodness that exists in the world and so wished that more attention would be paid to these stories that I was hearing rather than the stories of deceit and destruction that regularly appear in the business press. We can learn from the wrongs committed in the world, yet in order to make improvements we need to learn from the successes as well – we need to know how to do it right.

    Clearly business leaders want to avoid layoffs, improve employee loyalty and customer retention, create innovative products and services and do so in ways that are of benefit to people’s long term health and welfare. Yet how can we do that if all that we read about are the horror stories – people learning about layoffs over the phone with no advance warning, product recalls that occur after someone has become seriously ill due to lax quality control, pay disparities between the few and the many that reach 300 to 1.  These may all be scenarios we wish to avoid in our own organizations, but how do we go forward when these stories are not ones to learn from, only ones to fear.

    Did you win?

    This was the question posed by Danny Wegman in his response to my curiosity about why he has chosen to lead the way he does. Danny is the Chairman and CEO of Wegmans Food Markets, a super-regional chain of grocery stores in the northeastern United States that was recently named #4 on the 2012 100 Best Companies to Work For list published in Fortune magazine on January 19th.

    During my interview with Danny I asked him how it was that he has been able to be such a positive trustworthy leader when there is significant pressure and opportunity to do otherwise and make money. Many people argue that the reason business leaders are often harsh is because it is the only way to make money. Yet Danny disagreed, and Wegmans success is a testament to his approach to leadership.

    Danny believes that some things – like quarterly reports and business schools – get in the way of helping people to be human, and at Wegmans the way to make a profit is to be human. Quarterly reports create unrealistic expectations that a 3-month reporting cycle is a reasonable way to gauge the health of a business. Business schools often teach techniques yet do not help with reality – the bane of much academic study – you can learn ideas and concepts yet you also need to learn how to use them in support of humanity not to repress it.

    Lead with your heart, not a calculator

    The criticism of business schools is not solely Danny’s as many people have leveled sharp words at the lessons provided to future managers and leaders. At Wegmans their approach to leadership begins with the idea that doing what’s right is the most important first step in any situation. “We do things that we believe in, and if our customers like them, we make a profit.  Otherwise we’re just a hobby.  That to me is the key thing:  If you continually do what’s right, your people understand that that is what they are supposed to do too.”

    Leadership training at Wegmans does exist in class format yet the bulk of leadership training is by example and on the job. People are shown how to lead with their heart, how to use a calculator for calculations, not for leadership, and they are routinely praised for doing the right thing.

    This is quite an astute strategy for business success, yet also quite simplistic – as Danny says. What is happening at Wegmans is that tools are used for their proper function. Lots of data is collected about store operations, special events and promotions, and profitability. This is where the calculators serve their purpose.

    Data is also collected – some of it quantitative and some of it qualitative – about all of the human activities involved in store operations. “What we do is not rocket science, it’s a simplistic, homey way of doing things that works, and people hear that.” All of this data is used to help leaders at Wegmans understand the impact of their decisions on the overall functioning of the business – profitability of course, yet also employee satisfaction, customer loyalty, community reputation and the general quality of the work environment.

    And do they win? Yes, they do, in two distinct ways. First, in the sense that many financial analysts consider important, Wegmans is a profitable business in an industry that traditionally experiences low profit margins. Many of their peer organizations claim that the only way they can remain profitable is to pay lower wages, provide fewer benefits and squeeze price concessions from suppliers. None of those is an option at Wegmans.

    The way that Wegmans really wins though can be seen by their wonderful example of how to run a successful business by leading with your heart.

    Danny’s commentary on this is better than anything I could summarize: "Treating people the way you want to be treated yourself works.  That is what our company is a testimony to – not to anyone else but only to ourselves.  And we are just so happy that it works.  I mean, what if getting up every day and being grumpy and yelling at people and whipping them proves to be a great financial success and you thought that was the model?  Who would want to live like that?  Gosh did you win?  We’re so blessed that we treat each other the way we want to be treated and it does work, and we say, wahoo, let’s do more of that!

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