Clean Up on Aisle Five!

Quality is spilling out everywhere.

Published: Monday, January 12, 2009 - 10:39

Many of us will look back on 2008 as the year when gas prices soared to unbelievable highs and our 401ks dropped to unbelievable lows. A key measure of consumer confidence fell to an all-time low in December and a dismal job market and uncertain outlook for 2009 did little to settle our nerves. In November, the Consumer Confidence Index was at 44.7 percent according to the Conference Board and in December it sank to 38 percent. And of course the traditional Christmas shopping statistics sank to a new low. All in all, unlike the classic Sinatra song, it was not a “very good year.”

There was one bright spot in the economy though. A large portion of the population decided that avoiding high gas prices meant less dining out at restaurants and more dining in at home. As such, supermarket earnings were up. Those of us who participated in this, heretofore unknown phenomena of home meals discovered that the grocery stores not only provided a respite to high restaurant prices, but we quickly became enamored with the high level of service offered by these food emporiums.

I’m sure each of us would have an experience or two to share about our favorite supermarket. In my case, permit me to share some thoughts on three outlets that I think epitomize what performance excellence is all about.

Several years ago, I participated with the senior management of the Ritz-Carlton Hotel to stage two-day customer service symposiums. It was a way to share with the general public the inner workings of this organization, a two-time winner of the Malcolm Baldrige National Quality Award. At each location where the symposiums were held, the attendance was phenomenal. Everyone was interested in extracting optimum performance from their employees and the strategies of the Ritz-Carlton became their template.

We conducted the symposium in Cleveland on two different occasions and at each session, staff from the local supermarket, Heinen’s, participated. I was truly impressed with their commitment to quality and the enthusiasm of the attendees. Here’s why they are so successful, according to Chris Foltz, director of operations at Heinen’s.

“When I think of Heinen’s and how we differentiate on service, it begins with the priorities we have established as a company. Our first priority is associate satisfaction and engagement. We prioritize it above everything else, including customer satisfaction because we know it is the fundamental driver. I think our company strategic guidelines, which drive every decision we make, say it best:

     “It begins with… associates who love working for Heinen’s
     Which enables… the best service in the world with invaluable, passionate, and skilled associates
     But must include… relevant, high quality, food solutions
     And needs… a culture of accepting nothing less than excellence
     Which delivers… the Heinen’s mystique—characterized by a shopping experience where customers feel better when they leave than when they arrived. It’s an energy fueled by engaged customers and associates celebrating food and where our people and our product are always the star
     And provides… profit, which enables appropriate investment in facilities and our people”
As you know, this drives everything we do. In a sense, it is similar to the Ritz and their Gold Standards.
Because we recognize the driver is associate satisfaction and engagement, we have built many organizational capabilities to support this.”

At the symposium, Foltz describes how associate satisfaction begins the day a new employee starts.

On day one, each new associate is greeted by the general manager who spends 30 to 60 minutes welcoming them to the company. This is followed by a store tour, an introduction to their team (via their department manager), and an explanation of the Diamond Standards, which clarify the key behaviors that support Heinen’s brand and that emphasize how associates present themselves, their product, and their department to Heinen’s customers. The Diamond Standards are similar to the Ritz Gold Standards.

This is followed by 60 days of training, where store management reviews the progress of each associate as they learn and master each Diamond Standard, with a key part being the biweekly one-on-one review between the associate and their front-line manager. Within the first six months, each associate also receives leadership training, a five-week training class that teaches leadership in the context of service to others (fellow associates and customers). This training has evolved to be a crucial part of each associate’s development. Foltz spends up to 90 minutes as part of this training and has seen the difference it makes.

“I think that our participation also helps to reinforce our commitment to our associate’s success,” says Foltz.

The program has certainly been successful, adds Foltz. “Our customer satisfaction metrics have been on a steady rise since we with engaged the service management group (SMG) to facilitate these over three years ago,” Foltz explains. “I believe the Ritz does something very similar. Our loyalty metric of overall customer satisfaction (OSAT) has risen from 73 percent when we began to more than 77 percent, our average for the last six months. This is the percent of customers who rate their overall shopping experience as highly satisfied, the top box score. The industry average is 64 percent and has remained essentially unchanged, as reported to us by SMG, even as ours has risen by over four points. Of course, the key drivers of staff helpfulness have improved significantly during this time which has helped to increase our OSAT.”

As you can clearly see, Foltz is extremely enthused about the inner workings of Heinen’s and rightly so. His vision and the support of all management has cascaded through the organization and, as such, everyone has bought into the plan. The winners? The customers, of course, but the employees have made this a company where coming to work is a delight not a chore.

Two other supermarkets that have had similar success by listening to customers and having a strong management team are Dierbergs in St. Louis and Stew Leonard’s in Connecticut. At Stew Leonard’s, customers are involved in focus groups wherein new and existing practices and offerings go through a rigorous review. In this fashion, customers assume ownership for the service and the products that are offered. This practice was highlighted several years ago by quality guru Tom Peters when he featured Stew Leonard’s supermarket in his best-selling book and video “In Search of Excellence”. Stew Leonard’s’ is one of those companies that really knows how to “wow” customers and that is still true today.

In St. Louis, Dierbergs supermarket is the king of quality and performance excellence. Each time we enter a Dierbergs, the employees greet us as if we were houseguests. And not just the cashiers—every employee including the baggers and those stocking the shelves understand that customers are their lifeblood and operate accordingly. I have to confess that another reason we shop at Dierbergs is because it’s one of the few places where I can find Jay’s potato chips and Fitz’s root beer, which is a local product. Remember when you could only purchase Coors beer in Colorado and we loaded up our suitcases with a few six packs? Well, I load up our car with Fitz’s root beer.

So there you have it. As quality professionals we are always looking for role models—organizations that exude performance excellence. If currently that is your quest, look no further than Heinen's, Stew Leonard’s, and Dierbergs supermarkets. And if you travel to St. Louis, pick up a couple bottles of Fitz’s root beer for me.
Because this is the beginning of the new year, you should be used to all the “Best of 2008” articles and television programs filling dead space with already dead topics. I hate to be left out of anything, so let me give you my “Best of 2008.” These are my picks for quality bests that I have experienced this past year.

Recently, we stayed at a Renaissance Hotel in the Chicago area—our first experience with this top-level inn, that is a member of the Marriott family. Upon check-in our hostess inquired about a wake-up call to our room. We decided on a 6:30 a.m. call and then she asked what type of coffee we preferred. We opted for the decaf and pondered why this was so important. Our hostess informed us that we could expect coffee delivered to our door the next morning simultaneous with the wake-up call. As soon as the wake-up call arrived, I immediately opened the door, and lo and behold, there was a tray with a pot of coffee, two coffee mugs, two scones with jam, and real linens. Naturally we were blown away. This in my estimation is what “over the top” customer service is all about.

Those of you who have read my columns in the past know that I’m enamored with a company called Talent Plus. This organization is the premier global human resources consulting firm with more than 200 world-class, quality growth clients including another of my favorites, The Ritz-Carlton Hotel. Recently, Talent Plus introduced a new concept that I want to share with you.

As we all know, many organizations today are faced with the need to reduce work forces, a trend likely to continue in the coming years. How organizations determine who they retain and who they jettison will determine not only an organization’s short-term survival but its viability in the future. It’s essential that organizational leaders don’t simply react to the exigencies of today—they must plan for the future.

Currently, terms such as downsizing and rightsizing are tied to addressing current economic conditions but not the future desired state of the company. As such, “FutureSizing” describes the Talent Plus process of aligning a work force to meet present and future needs. The process takes associates’ talents and the overall talent picture of an organization into account when making work-force reduction decisions, and not simply tenure, salary, or performance metrics. FutureSizing enables leaders to address current economic concerns while aiming toward future success, creating a work force appropriately sized for current and future challenges.

If this process sounds appealing to those of you who are looking for a sound approach to organizational improvement while perhaps reducing staff, then I strongly suggest that you review the plan at www.talentplus.com. It’s not my practice to act as a shill for various companies, but I have worked with the staff of Talent Plus for many years and I’m confident that you will find them to be a very responsive, professional, and if I might say, an extremely talented group of people.

Congratulations to the Detroit Athletic Club for being recognized as the winner of the Michigan Quality Council Leadership Award for 2008. The Athletic Club has been recognized in the past as a Platinum Club of America, a top place to work by the Detroit Free Press, and is a nine-time recipient of the annual “101 Best and Brightest Companies To Work For.” Look for the Athletic Club to emerge as a Baldrige Award winner in due time.

Well, that’s it for this month. Since retirement is out in 2009 and flipping burgers at McDonald’s seems to be in vogue for us senior citizens, maybe there’s a new career for me at the Golden Arches.

About The Author

Bill Kalmar

William J. Kalmar has extensive business experience, including service with a Fortune 500 bank and the Michigan Quality Council, of which he served as director from 1993 through 2003. He served on the Board of Overseers of the Baldrige Performance Excellence Program and has been a Baldrige examiner. He was also named quality professional of the year by the ASQ Detroit chapter. Now semiretired, Kalmar does freelance writing for several publications. He is a member of the USA Today Vacation Panel, a mystery shopper for several companies, and a frequent presenter and lecturer.