What Company Leaders Can Learn from the Market Basket Story
The Market Basket story - the hostile overthrowing of beloved leader Artie T. Desmoulas - has the elements of a Hollywood production: drama, plot twists, and suspense. It also offers valuable business lessons.
The complicated story revolves around the long-feuding family that owns the supermarket chain. Artie T. - 49.5 percent owner - was overthrown by his similarly-named cousin, Artie S. - the majority owner - who vowed to boost the company's profits. But Artie S. hadn't anticipated Artie T.'s strong following, or the unprecedented backlash that ensued.
The Market Basket drama is a study in contrasts. Artie T.'s positive business model involved treating employees and customers kindly, securing loyalty from staff and shoppers alike. Conversely, Artie S.'s business model - perceived as greedy and uncaring – has sparked major revenue losses. While this isn't the first time in history a company has been run by unpopular leaders, the headline here is the passionate, united reaction.
This saga's key business takeaways include:
- Treat employees well to secure their loyalty. Artie T. paid high wages, treated people well and made personal sacrifices for his team. After being ousted, thousands rallied behind him. This widespread loyalty and dedication to an ousted business leader is unprecedented, speaking volumes about Artie T.'s character.
- Treat people badly and they'll never trust you. Conversely, Artie S. "cleaned house." Employees who were part of the team for decades were unapologetically terminated by mail. There was no "PR spin" from the new regime, no comments about how customers are valued. In fact, there was no damage control whatsoever. Instead, the new co-CEOs were perceived as uncaring and greedy, relaying only terse messages instructing employees to return to work or be replaced. There was no reassurance to customers about the continued high quality and affordability of products or the promise of uninterrupted service. Turned-off customers flocked to Market Basket's more expensive competitors.
- Give customers what they want and need. Market Basket has long been regarded as an affordable grocer with high-quality products and outstanding customer service. Devoted customers boosted the company's profits, elevating their rankings to #127 on the list of privately-held corporations nationally.
- Don't be greedy. Artie S. thought that by overthrowing Artie. T., he could make more money, but his greedy plan backfired. Due to the widespread support for Artie T., Market Basket lost millions of dollars daily during the weeks-long battle.
- Recognize the domino effect. The downward spiral continued when delivery trucks stopped bringing fresh products to the stores and vendors stopped supplying products. It's impossible for a supermarket to be profitable with no bread, milk or vegetables to sell.
- Beware the power of public perception. The public watched closely as the leaders, Board and local politicians worked to resolve the conflict, while thousands of people remained out of work for weeks. The perception was - and still is - that Big, Bad Bureaucrats drastically damaged the corporate culture. Now that a deal has finally been reached, putting Artie T. back in charge, he has significant damage control to do.
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