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Seven Business Lessons from 7-Eleven

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I have long been intrigued by the series Undercover Boss (currently shown in CBS) but never got the chance to watch it— until last Sunday. I am so happy I did. I learned a lot of business insights from the one and only episode that I have watched so far. I just saw a replay of an episode that was first aired in February 2010. It’s the one where Joe DePinto, CEO of 7-Eleven, goes undercover in his own company by working in different operations jobs. Among DePinto’s responsibilities were: working the night shift, making donuts, and driving a delivery truck.

DePinto tells his executive team before embarking on his temporary assignments:

“I’ll be focusing on spending time in the field, where the rubber meets the road. I’m going to see what we’re not doing well, and that’s only going to make us better in the long run.”

In the end, Joe DePinto witnessed a lot of great and inspiring things from ordinary employees of varying backgrounds and at the same time he saw some areas of opportunity. I think his undercover stint was a worthwhile learning experience for him and will only improved the way he manages 7-Eleven. Here are seven management lessons that I learned from this Undercover Boss episode: 

1. Know your customers 

DePinto’s first stint as undercover boss was in Shirley, NY where he worked the early morning shift at the store that sells the most coffee among all the 7-Eleven stores. He wanted to understand the secret as to why this branch was selling more coffee than other stores. Here DePinto met Dolores — 7-Eleven employee for 18 years. He saw her passion and dedication despite her sickness; she has only one kidney and has to undergo dialysis every single day. What’s amazing was how Dolores knew all the customers by name and greeted them affectionately. She showed an up-beat and positive attitude all the time. DePinto quickly realized that the reason why that store was selling 2,500 cups of coffee per day was because of Dolores and her relationship with her customers — definitely not just because of their coffee. 

2. Replicate what works

By going undercover, DePinto discovered what he set out to discover. He learned and observed first hand how Dolores’ personal relationship with her customers brought them back to her store again and again. DePinto wanted to replicate the success of Dolores’ store in order to improve 7-Eleven’s business in coffee sales. Duplicating what Dolores does is not an easy task, but if 7-Eleven can develop a customer service culture patterned after how Dolores treats her customers, it could work! 

3. Know your employees 

DePinto’s next stint was working at 7-Eleven’s largest bakery in Baltimore, Maryland.  Here he was trained by Phil, the shift supervisor and aspiring artist. DePinto was visibly impressed byPhil’s talent as he was shown a sketch pad-full of great drawings inspired by, what else, donuts. This casual encounter in the break room led DePinto to spot a talent that could be harnessed by the company’s marketing department. Just like DePinto, I think managers should seek to know more about their employees and discover their other talents and capabilities. They must be open to harness these talents if it creates mutual value for the employee and the company. Providing employees the training and opportunities to showcase their other talents is a win-win situation for the company and its people. 

4. Employees can inspire management 

The last day of Undercover Boss finds DePinto working with Igor on a delivery truck. Igor, an immigrant from Kazakhstan, inspired DePinto with his humble story. DePinto affirmed Igor for his hard work, can-do attitude, and passion for the job during their meeting at the company’s headquarters when he finally revealed himself as the CEO. Igor replied, “I can’t say anything, I’m just doing my job.” Igor talked passionately about his “American Dream” and how grateful he is to be living it. He told DePinto how he and his wife work only see each other during the weekends because of Igor’s night shifts. Igor’s inspiration and dedication was rewarded— he is now managing one franchise for 7 Eleven.  

5. Communication is key 

Remote operations and thousands of franchisees makes the communication of programs and messages challenging for companies like 7-Eleven. During the show, DePinto was surprised to find out that one store routinely trashed day-old bakery items which were supposed to go to charity. He was visibly disappointed that these items — that should have been sent to charities as per company policy — were being thrown into the trash. It showed his real concern for the homeless and hungry.  However, he understood that it was a case of miscommunication and it something that can surely be improved through better coordination and communication from the head office. 

6. Support your frontline 

In addition, the episode showed one store that needed to replace many of its lights in the store area and in the storage area.  It was one of the chain’s highest grossing stores and its lights had been out for some time. It  not only negatively affected 7-Eleven’s image to its customers (the store did not seem well-maintained due) but was also a potential safety hazard for the employees. DePinto, as “Danny” the entry level employee, was actually tasked to call maintenance and request for the lights to be changed.  As “Danny”, he was told that it was a low priority request and the store’s lights can only be fixed in 30 days during the monthly maintenance visit. DePinto had to call his chief operations officer to prioritize the maintenance job. How we support our frontline is important to our business. They are the people that serve our customers directly. Managers need to know the reality of what’s happening in the field in order to make more sensible decisions according to the situation in the frontline.

7. Great people make great companies 

While working on the donut production line, DePinto couldn’t keep up with the speed of the conveyor belt.  This was until his trainer, Phil, showed him the trick to doing it more efficiently. That’s the case with every task in business, no matter how big or small and strategic or operational. In another segment, DePinto asked Waqas — a young Pakistani who served as boss for the night — about career plans and discovered that Waqas doesn’t consider his job at 7-Eleven to be a “career.” Waqas works the night shift in order to finish his college education during the day. Despite earning a college degree, Waqas views his position in 7-Eleven as a dead-end job because there are no opportunities for him to move up in the company. DePinto was saddened to hear this.  The CEO felt that an employee who has already worked four years for the company and is working for higher education should feel that they have other possibilities and opportunities within the company. DePinto went to say, “Great people make great companies; we can’t let them think their jobs are dead-end, we can’t win without our great soldiers.”

Image courtesy of 7-Eleven.

Promise, Practice, People and Performance- Four Key Components of IT Branding (Branding IT Organizations Part 4)

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IT branding is the process of building and improving the IT brand identity. This identity is shared by employees and groups that control the way they interact with each other, with stakeholders and with internal customers. It is a powerful tool in transforming the IT group into people who perform calculated, yet seemingly spontaneous, service delivery in the best interests of its internal customers. 

This is part four of my series on IT branding. We have covered several perspectives on IT branding in the first three articles of this series. Part 1 talked about branding in general and how IT branding is linked to the Process Culture Maturity. In part two, the concept of IT branding was defined and how it was related to IT team culture. Part three talked about high quality IT service delivery as the best brand identity. 

This post will delve more into the subject of IT branding, understand its key components and examine how it shapes the IT organization. The four key components of the IT brand, the four Ps — Promise, Practice, People and Performance, will be defined. These can be seen in the diagram below: 

Promise 

One establishes the IT brand by building trust in a promise about what the company does, what it stands for, what its vision is, and what added business value it can provide the internal customers and stakeholders. This is represented through the established IT vision and mission statement, customer value proposition and service offers. This promise must be developed by IT top management and its sponsors through extensive analysis of internal and external environment, interviews, and research. The Promise component of the IT branding process is achieved through vital scoping, visioning and strategic planning.   

Practice 

After writing the organization’s promise, the next step is to build the engine that will enable service delivery. This is the IT Practice – comprised of IT operating model, mode of service delivery and various other methodologies. It ensures that IT teams achieve optimum results and performance. It will define the discipline in which IT systems, operations, projects and evolution will be managed. However, this discipline should not be constrained to a particular use of a vendor’s product; rather, it should focus on providing a framework to structure IT related activities and the interaction of IT personnel with business customers and users. 

People 

The most important element of the IT brand is the People component. Everyone in IT must be in sync. For new team members, this is achieved through an adequate on-boarding process. For existing employees, ongoing organizational development and engagement initiatives will work. Communication is critical in this aspect. Top management must fully engage employees. It starts by communicating the Promise (IT mission and vision, strategy) and Practice (IT operating model and methodologies).  Each team member must know his role and value in the overall service delivery system. It is important to note that the internal perception of the IT brand are affected by the IT team members’ behavior, and that one must therefore shape the IT team culture in ways that encourage IT brand-committed actions on the part of all IT employees. 

Performance 

As discussed in part three of my articles on IT branding—what is central to IT branding is the relentless pursuit of quality IT services. Organizations build its IT brand by living up to its promise. IT teams strengthen its IT brand by relentlessly improving its IT brand promise. The surest way to do this is improving performance. IT managers must define key performance indicators to monitor performance against objectives. Measuring the success of IT branding initiatives is challenging; however, it is essential that every effort be made to measure results versus targets set forth. 

A Final Note: 

One’s perception of the IT service is often reduced to a phone conversation with a helpdesk service agent. IT branding depends on each and every individual working in the IT organization—the “People”—from the top, the CIO to middle IT managers then to the frontline helpdesk service agents. It is important that all IT personnel are in sync because the service brand is all about them. It is strengthened by the established “Promise” and “Practices” that enables IT organization to deliver with high “Performance”.

Peter Drucker Centennial – his wisdom and perspectives

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Peter Drucker (November 19, 1909–November 11, 2005) was a writer, management consultant, and self-described “social ecologist.” The Harvard Business Review honors Drucker’s contributions with a spread in its current November edition. The issue has a lot of interesting and insightful articles about the continuing relevance of his perspectives and wisdom in today’s turbulent times. 

Drucker’s Influence in Asia 

AsiaI remember my professor in the Asian Institute of Management who talked passionately about Peter Drucker’s perspective in business and management. Managers in Asia have described Drucker influence as essential in making their business successful and helping countries develop. Drucker frequently travelled to Asia, particularly Japan, throughout his life. He has profound influence there, not only as a management consultant to companies such as Toyota and retail giant Masatoshi Ito but also as a consultant to governments such as Japan, South Korea and China. 

Many influential and revolutionary ideas have run through Drucker’s career and writings. He preached about decentralization, simplification, impact of knowledge workers, management by objectives, customer service, corporate compensation, need for community, organizational business processes among others. I have chosen two out of Drucker’s many ideas to discuss: 

1. The Purpose of a Company Is to Create a Customer 

A company’s primary responsibility is to serve its customers. Profit is not the primary goal, but rather an essential condition for the company’s continued existence. There is only one valid definition of business purpose: to create a customer.”  – Peter Drucker

Profits come when customers continue to buy your products and services. That is the reason why Drucker’s perspective always pointed out the importance of putting customers first. A.G. Lafley, chairman of P&G board of directors, always sought out Drucker’s advice during his tenure as CEO of the company. He attributes their corporate principle to Drucker’s customer service principle that the consumer – not the CEO – is boss. P&G have made it their purpose to touch more consumers and improve more of each consumer’s life. By putting customers first, according to Lafley, they have nearly doubled the number served, from 2 billion to 3.8 billion; doubled sales and tripled P&G profits. 

2. Essential Condition for the Company’s Continued Existence 

“The need for planned abandonment – businesses have a natural human tendency to cling to “yesterday’s successes” rather than seeing when they are no longer useful.”  – Peter Drucker

Many companies focus on placing as many products and services as possible in the market and reap as much profits as possible. Their center of attention lies in what they have achieved in the past and what they are maximizing in the present. According Zhang Ruimin, CEO of the Haier Group based in China, sole focus on generating profits today could not ensure his company’s survival tomorrow. Early on, Haier’s profits were dwarfed by its competitors in China while Haier focused on quality. They could not compete with companies offering the same products in the market. But when supply-demand balance changed in China, according to Ruimin, lots of companies lost customers and went bankrupt overnight while Haier strengthened its position in the market. This is one of Drucker’s key principles – the assumptions on which the organization has been built and is being run no longer fits reality. Zhang Ruimin takes this to heart as a constant warning.  He wrote, “All decisions I make must be consistent with the ever-changing external environment. If they aren’t, the consequences may not emerge right away, but once the danger show up, it will be too late.” 

HBR Cover November 2009To read more about Peter Drucker’s perspectives and find out how his wisdom can help your company navigate these turbulent times, take a hold of the current November edition of Harvard Business Review with the headline: The Drucker Centennial – What Would Peter Do?

Photo courtesy of Harvard Business Review.

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