From The Atlantic – Train your workforce and profit handsomely.

The Anti-Walmart: The Secret Sauce of Wegmans Is People

DAVID ROHDE

MAR 23, 2012

An East Coast supermarket chain shows that a business can generously train its workforce and profit handsomely

Reuters

ROCHESTER, N.Y. – Cashiers are barred from interacting with customers until they have completed 40 hours of training. Hundreds of staffers are sent on trips around the U.S. and world to become experts in their products. The company has no mandatory retirement age and has never laid off workers. All profits are reinvested in the company or shared with employees.

A doomed Internet startup? Occupy Wall Street fantasy? Bankrupt retailer recently purchased by Walmart?

No, a $6.2 billion-a-year, 79-store-supermarket chain with cult-like loyalty among its customers. Wegmans, which operates its 79 stores in New York, Pennsylvania and four other East Coast states, shows that a business can generously train its workforce and profit handsomely.

Privately owned by the Wegman family, the chain employs 42,000 people – 20 times the number who work for Facebook – and defies quarterly-driven Wall Street wisdom. Executives say their most important resource is their workers.”Our employees are our number one asset, period,” said Kevin Stickles, the company’s vice-president for human resources. “The first question you ask is: ‘Is this the best thing for the employee?’ That’s a totally different model.”

Yet the company is profitable. Its prices are low. And it is lauded for exemplary customer service.

“When you think about employees first, the bottom line is better,” Stickles argued. “We want our employees to extend the brand to our customers.”

The Wegmans model is simple. A happy, knowledgeable and superbly trained employee creates a better experience for customers. Extraordinary service builds tremendous loyalty. Where, though, is the profit?

High volume, according to company executives. The chain’s stores are enormous – usually 80,000 to 120,000 square feet – larger than a typical Whole Foods and roughly double the size of a traditional supermarket. And they feature a dizzying array of 70,000 products, nearly twice the number available in a standard grocery store. Across the East Coast, Wegmans supermarkets have the highest average daily sales volumes in the industry.

Employees are omnipresent in stores and do seem knowledgeable. With little prompting, they launch into exhaustive but friendly accounts of where the meat, fish or produce they sell hails from, what each item tastes like and how best to prepare it.

A fish salesman raved about the exhausting standards of the company’s distributor in Alaska. A butcher said he had visited the ranch where a steak came from in Montana. And Maria Benjamin, a 38-year Wegmans veteran, started running a store bakery after managers loved her homemade Italian cookies.”They let me bake whatever I want,” said Benjamin, one of 1,015 people employed at the company’s 135,000-foot flagship store in Pittsford, New York. “They’re really down-to-earth, wonderful people.”

Executives say the company is also able to invest in its employees and focus on steady, strategic growth because it is not publicly traded. They said cutting jobs or shipping them overseas was, in part, the product of having to relentlessly please the stock market.

“Some of that is that public mentality,” said Stickles, who has an MBA and once planned to be a stock broker. “The first thing they think about is the quarter. The first thing is that you cut labor.”

The Wegman family, which grants few interviews, has owned and run the company since 1916. Robert Wegman, whose father and uncle opened the first store, dramatically expanded the business in the 1970s by being one of the first chains to vastly expand store size, include pharmacies and use bar codes.

Today, the chain is run by Robert’s son, Danny, 65, and his two daughters, Colleen, 41, and Nicole, 38. Mary Ellen Burris, a 78-year-old senior vice-president and family confidant, said the owners refuse to open more than three stores a year because “we cannot continue to be the best if we try to go at a faster pace.” She said the family has no interest in taking the company public.

“No, absolutely not,” Burris said. “It takes away your ability to focus on your people and your customers.”Like other companies, Wegmans has made mistakes. Over the years, it has had to close nine stores that failed to generate adequate revenues. And critics have accused it of moving stores out of poor urban neighborhoods and focusing its operations on wealthy suburbs. And while the benefits are generous, its pay rates are good, not extraordinary.

Wegmans has also clearly benefited from being based in Rochester, a small but historically prosperous area in upstate New York that was the birthplace of Western Union, Kodak, Xerox, Bausch & Lomb and other companies. Wegmans treats its employees well in part to keep them from gravitating to other firms.

Competition has also forced the company to change. The arrival of Walmart-owned supermarkets caused a sharp reduction in prices in 2004.

“It was clear that people were gravitating to the discount stores,” said Jo Natale, the company spokeswoman. “And so we completely changed the way we did our prices.”

But she and other executives insisted that Wegmans’ real advantage was the company’s happy, high-quality workforce. It sends butchers to Colorado, Uruguay and Argentina to learn about beef. It sends deli managers to Wisconsin, Italy, Germany and France to learn about cheese. Last year, it awarded $4.5 million in college scholarships to employees.

The company has half the turnover of its peers. In February, Fortune magazine declared it the fourth-best company to work for in America in 2012. In 2005, it was number one.

“What some companies believe is that you can’t grow and treat your people well,” Burris told me. “We’ve proven that you can grow and treat your people well.”

Wegmans is a model. It shows that companies can train, innovate and profit at the same time.

This article also appears on Reuters.com, a partner site.

Putting Action Back into Strategic Plans

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Applying Group Concept Mapping to Strategic Planning, Innovation and Product Development

Group Concept Mapping is a form of conceptualizing that combines several common group processes such as idea generation (brainstorming), sorting, and rating, with a series of analyses (multidimensional scaling, hierarchical cluster analysis). It is relevant to strategic planning, innovation and product development in that it creates high quality input to the process and action-oriented results.

THE CHALLENGE

Businesses today face many difficult challenges.  There is an incredibly broad range of tasks and activities that need to come together to execute a successful plan.  This assumes there is a plan to execute.  Many companies hobble on by performing legacy tasks that have outlived their strategic purpose.  Either way management must continuously prioritize, focus, and align the work, across a diverse group of functional disciplines to move the organization forward.  Management essentially orchestrates a series of specific actions to achieve its goals.   Part of the challenge itself is often the complexity of the integration of these highly specific disciplines and perspectives, necessary for delivering a quality result.

Demands on companies to grow their business by developing new innovative products and services or penetrating new markets or verticals have never been greater.  Marketers, business development managers and new product development professionals are in a constant cycle of finding new solutions to current and emerging consumer problems, and ways to monetize them. When done well, the demands, perspectives, and insights of a diverse group of stakeholders need to be gathered, sorted and integrated into the solution.

GROUP CONCEPT MAPPING PROVIDES ANSWERS AND DRIVES ACTION

Concept mapping is a methodology that social researchers have applied for over 30 years to create visual aids that help define an idea or problem.    Some of the processes that use concept mapping go by the popularized names of ‘idea mapping’, ‘mind maps’, ‘causal mapping’, or ‘cognitive mapping’. These tools help structure an individual’s creative thinking about a problem or improve the organization of thoughts around that idea or problem.  It is a visual mapping of the idea/problem and an alternative to creating an outline.  Group Concept Mapping takes standard concept mapping to a new level.  Group Concept Mapping is a participatory process that generates ideas around a focus, then uses unstructured sorting, multidimensional scaling, and cluster analysis, to create maps, pattern matches, and go-zones for use in prioritization and action planning.

Applying Group Concept Mapping to evaluate, prioritize and create action plans for strategy planning and execution, and innovation and new product development works for several reasons:
  1. It integrates input from a variety of diverse sources with different levels of specific content expertise or interest.
  2. It uses robust multivariate data analyses to construct cluster maps, pattern matches and go-zones that can be used to guide solution prioritization.
  3. It creates a series of maps and reports that visually depict the body of thinking of the group.
  4. The result is an action-oriented framework that be used directly to guide planning, program development, evaluation, and measurement.

THE FOUR PHASES OF GROUP CONCEPT MAPPING

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There are four phases to a Group Concept Mapping project: Preparation, Data Collection, Data Analysis, and Action Planning.  During preparation, the focus of the project is identified, participants selected, and a project plan is created including scheduling, communications, and logistics. During data collection, ideas are generated live or online.  Related ideas are grouped and each idea is rated for one or more attribute such as, importance or feasibility (ease of execution). During analysis ideas are represented in maps through a sequence of multivariate statistical analyses. Participants actively interpret the resulting maps. In action planning, the maps and results are used create action to address the purpose of the project.

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Each phase Group Concept Mapping engages the participants from the organization (internal and external). Individual knowledge, wisdom, experience insight is the core data feed for a map and it emerges from the unstructured free-generation and free-sort of ideas into related groups (clusters).  The idea generation and sorting are qualitative judgements made by participants. Related statements get piled or grouped together by participants. Participants use as few or as many piles as they think necessary to arrange the statement set meaningfully, from their own perspective. The qualitative data is then assigned to matrices and these matrices are summed across all participants.  The results yield a similarity matrix that indicates the number of participants that sorted each pair of statements together. This similarity matrix is the input for multidimensional scaling (MDS) analysis.  Data from the rating of the statements feed the quantitative analysis into pattern matches and go-zones. Pattern matching is especially useful for high-level pattern assessment and go-zones are particularly valuable for detailed use of the maps for planning or evaluation at the statement level. Point maps, cluster concept maps, pattern matches, go-zones, and tabular statistical results make up the body of analytical results.   Project participants actively interpret the results for practical use in strategic action planning.

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There are four main differentiators that separate Group Concept Mapping from other planning tools:  First, the process easily engages participants across diverse perspectives.  Second, it is an emergent vs. prescriptive process that taps into individual knowledge, wisdom, experience and insight often hidden from or unavailable in other processes.  Third, it is data-driven and analysis-based, and translates qualitative insight into quantitative data.  The rigor and scientific credibility of the analysis sets this tool far apart from its ‘LITE alternative methods.  Forth, the results are action-oriented and can be fed directly into execution plans.

APPLYING GROUP CONCEPT MAPPING TO STRATEGIC PLANNING AND ROADMAPPING

An example of the use of group concept mapping in strategic planning for businesses or product lines, and roadmapping, is to answer basic or highly specific questions, such as, ‘Which ideas, projects, or problems should be resourced over the next 18 months to three years?’ For major innovation horizons, the timeframe may be five to ten years out due to the research and development necessary to achieve break through results.  Either way, these types of questions have many layers and the universe of opportunities to execute may be vast and diverse.  In addition, scenario stakeholders look at the question from any number of differing viewpoints and motivations.

The project is undertaken because management needs to develop a comprehensive plan for resource allocation across any number of product/service platforms. Group Concept Mapping is especially appropriate because of the complex nature of the task, need for speed, and the involvement and alignment of a variety of stakeholders.  The project takes form and focus and after a collection of approximately 75 – 100 brainstormed ideas, MDS and cluster analysis determines the results presented in a map of say, seven emergent clusters of ideas/solutions. These clusters are interpreted by participants by with several different filters and attribute visualizations.

The emergent point maps and cluster maps show ideas and solution statements that are related and point to larger and stronger solution sets.  Clusters to consider may include branding/communications, distribution channels, production platforms and supply chain, legal – regulatory issues, technology acquisition, corporate structure and reporting, research and development.  The pattern matches assess the relationship between the cluster-level average importance and average feasibility (ease of execution) ratings of the ideas. The matches can show that while branding/communication issues were judged easy to execute and feasible, they are also perceived as relatively the least important as a solution to the issue at hand.

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Plotting the importance along with feasibility for each of the 75 -100 statements in the set and then dividing the plot into quadrants along the average, produces a quadrant labeled the ‘go zone,’ where idea statements are both above the average on importance and feasibility.   Considering these issues for action may be indicated as a path forward.  Go-zones are valuable inputs for planning and prioritization.

MINING EXPERIENCES

Group concept mapping can be used in many strategic and innovation planning contexts for a diverse range of purposes and projects.  It can be utilized at a high level or at a granular product solution level.  Either way the output is incredibly specific to the matter at hand.  At the product solution level Group Concept Mapping is well suited to developing conceptual frameworks for complex product/service constructs that deal with experiences (e.g. consumer problems, physical product solutions, packaging solutions, delivery experience, shopper experience, use experience, end of lifecycle issues, service experience…)

Experiences are highly qualitative, emergent and specific to the individual.  Group Concept Mapping translates individual qualitative insight into quantitative results that feed directly into the development process.

We are in an age that business planning and execution processes need to be client specific and experientially based.   Methods need to be both systematic and flexible, to handle dynamic and complex issues.  Group Concept Mapping is a robust, practicable and collaborative process that delivers better results through a scientifically rigorous process of translating insight into action.

Learn more about Applied Group Concept Mapping.   Sign up for our upcoming webinar.

Tuesday, March 21 at 10 a.m. EDT or Tuesday, March 21 at 4 p.m. EDT

This webinar is a collaboration of New Product Visions and INSIGHTOVATION CONSULTING.

Credits:  Concept Mapping for Planning and Evaluation, Mary Kane – Concept Systems, Inc., William M. K. Trochim – Cornell University, SAGE Publications, 2007