‘The turnaround king’ on why frontline employee engagement is a business imperative
If you had checked in on Jim Donald in 2006, odds are good you’d have found him in the air. And the odds are even better that, while cruising at 31,000 ft above sea level, you’d have found him hand-writing a note to one of his frontline employees.
Then the CEO of Starbucks, Donald spent nearly half the year travelling. And all that time on planes gave him a perfect opportunity to write thank you notes: a total of 33,000 per year.
Why did this busy executive take the time to write so many individual notes to the frontline?
From Donald’s perspective, handwritten notes are a surefire way to connect with people on a human level and show you care. That leads to engaged employees. And for Donald, frontline employee engagement is not a nice-to-have, or something best left to the HR department.
It’s the foundation of a successful business. Everything flows from there: better customer experience, greater brand affinity, reduced shrink, higher revenue and the list goes on.
Boost frontline employee engagement by helping them fit in fast, connect to the culture and keep growing.
“You disrupt companies through sheer numbers of people doing what’s right for the customer and showing the customer how much they care,” Donald says. “And by doing that, revenue grows and bottom line grows. So, the frontline is directly related and directly impacts that bottom line.”
It’s hard to argue with his track record. Over his 50 year career, Donald had led some of the country’s biggest brands, including Albertsons, Extended Stay Hotels and Pathmark Supermarkets. Along the way, he earned a reputation as “the turnaround king” for his transformations of struggling companies. Now the co-chairman at Albertson’s, Donald sat down with us to share the critical role of frontline employee engagement in tackling the biggest challenges of his career.
Challenge #1: Manage large scale change at Albertsons
Donald joined Albertsons as CEO in 2018 with a goal of fixing revenue and margin, updating technology and taking the company public.
To accomplish that, he’d have to make some changes.
His first priority was to get the frontline workforce—which made up 98% of their 275,000-strong workforce—aligned and on board with the changes ahead.
“I learned that communicating a message consistently to the frontline solves the riddle of getting everybody moving at the same pace and in the same direction,” says Donald.
“I began doing 45 second videos, three times a week, posted on the company portal for all to see, showing me doing various things like driving a semi across the country with groceries to a store. Frying chicken at a deli. Cutting meat in a cutting room with a bunch of meat cutters around me, or simply working with the overnight crew, unloading a truck.”
The results were impressive.
“It flipped our culture, it spiked our revenue and it allowed us to go public just last July. Why did that happen? These videos created an environment where I spoke the language of all my employees from age 16 to 80.”
It wasn’t just about keeping employees in the loop. It was about showing frontline employees they were a valued part of the business, and their work was important to the company’s success.
“By doing what I’ve asked others to do, I spoke the second language of the frontline. That’s called communicating to the heart. That causes action. It also creates engagement. When people become engaged, they are emotionally connected to the business, and things happen very fast. Revenues grow, profits improve.”
This sense of engagement was also critical to ensuring that the changes the company was going through were understood, adopted and executed on by the people on the frontlines.
“The best-laid plans don’t work once they’re launched if you don’t have the understanding of those users that interface with the customer. It’s not easy. The word change management is key here, because getting your associates at every level to understand that we’re doing things differently is so critical to the success of this,” says Donald. “If it’s told in a way that they’re always going to remember, if it’s told in a way that engages them emotionally, they’ll get it, and they’ll execute on it.”
Challenge #2: Bounce back from bankruptcy at Extended Stay Hotels
Donald took the helm of Extended Stay Hotels as they were emerging from bankruptcy, tasked with the mandate to take the company public. He soon realized that while the company was officially out of bankruptcy, the mindset of staff was not. There was still a heads-down, play-it-safe mentality throughout the company.
Donald knew that this type of behavior was not going to take them where they needed to go. It was now time for bold moves and innovative ideas.
His solution was to give each employee a ‘get out of jail free’ card. It guaranteed that as long as they were taking (safe, moral, legal) risks, they would get a free pass if things went wrong. The goal? Empower employees to go out on a limb to try new things.
“Things changed overnight. We began our march to an IPO, and not only did we go public in less than a year, Extended Stay Hotels was just purchased last month for $6B. That’s a true testament to the power of encouraging risk-taking,” says Donald.
“It was not magic. It was giving our employees power to make decisions. Encouraging risk taking, with the freedom to fail, is a leadership trait that most leaders are either afraid to do, or don’t understand the huge upside and very little downside. Leaders today have to understand that in today’s world, in our currency economy, status quo means you’re going backwards.”
We’ve seen countless examples of frontline employees going above and beyond to surprise and delight customers, with just the right gesture at the right time. (Think about the legendary guest experience at brands like Southwest Airlines and Disney). These kinds of experiences are only possible when the frontline is empowered to go beyond the checklist and make decisions.
“The right sales team, the right manufacturing team, the right frontline, should have and should demand the ability to make the decisions that could change the trajectory of the company, at the moment that decision needs to be made. Encouraging risk taking and building a culture of risk on your team is vital.”
Challenge #3: Stoke sales and boost morale at Pathmark
Donald’s first day as the CEO of Pathmark began early, at 1:30 am, when he stopped by one of the supermarket chain’s 24/7 stores to strike up a conversation with an associate. By 8 am, he was at the head office, getting briefed by his exec team. But he’d already learned something from the associate responsible for managing $75 million in inventory in one of the highest-crime areas of the country.
“When you go where you’ve never been before, you’re going to see things you didn’t expect to see. You can’t necessarily rely on your executive team to be so candid to tell you about what’s behind the scenes,” says Donald.
That associate never expected to see Donald again—and he told Donald that on his way out. But Donald was back the next week and the following week. The word spread. Donald’s hands-on approach showed frontline team members that their opinions and experience were valued at the highest levels of the company.
The importance of hearing feedback directly from your frontline people is something Donald learned from working with another retail legend, Sam Walton of Walmart. When they visited stores, Walton would get on the microphone and invite employees and customers to come ask him questions.
“Great leaders always perform on their employees’ or their customers’ home courts. There is no way that doing right by your frontline can happen from your office, from your home or from your computer in your home. Whether it’s a personal or virtual reach-out, go where you’ve never gone before, see and learn things on the frontline that you might be learning for the very first time.”
Your challenge: Thriving amidst the uncertainty of the post-pandemic environment
As many parts of the world re-open, companies are trying to find their footing in a new environment, with new customer and employee expectations.
Donald offers this deceptively simple advice: “Care more than others think possible or necessary.“
A culture of caring, for your people and your customers, is what differentiates the good from the great.
“You hear a lot about data science, AI, innovation—everybody’s got to innovate more. But the culture of caring eats all of those for breakfast. Your customer does not care about how much you know. They do demand to know how much you care.”