Market Basket offers Labor Day lessons

"In this organization, here at Market Basket, everyone is special. You have demonstrated that everyone here has a purpose. You have demonstrated that everyone has meaning. And no one person is better or more important than another. And no one person holds a position of privilege. Whether it’s a full-timer or a part-timer, whether it’s a sacker or a cashier, or a grocery clerk, or a truck driver, or a warehouse selector, a store manager, a supervisor, a customer, a vendor or a CEO, we are all equal. We are all equal and by working together, and only together, do we succeed."

Those were the words of Arthur T. Demoulas upon his stunning return as the head of Market Basket, the 71-store grocery chain based in New England. A $1.6 billion deal was reached last Thursday for Mr. Demoulas to buy out his cousin, Arthur S. Demoulas, and take over operations of the chain.

In early July, Arthur S. reportedly swayed a relative on the grocer’s board to lead an effort to fire Arthur T. as president. Reports said Arthur S. was looking to find ways to extract more cash from the business for investors.

Support for Arthur T. led to a seven-week walk out of most of the workers at the grocery chain’s headquarters, stores and warehouse. Stories about resulting bare shelves, the threat of fired striking workers, and worker empowerment were played out loudly across New Engand newspapers.

save market basket 2

With many likening it to a movie script, many Labor Day columns this past weekend leapt on Arthur T.’s return to Market Basket to illustrate a rare victory for labor.

Writing for The Washington Post, E.J. Dionne Jr. said mentioning the sackers, clerks and truck drivers contributing to Market Basket’s success was Arthur T.’s "way of asserting a capitalist version of the labor theory of value: Without good workers, the ‘job creators’ can’t make it."

At the same time, he said the incident illustrates why the country still needs unions and other forms of collective representation for employees. He wrote, "Not every CEO, alas, is like Arthur T."

Writing for the Boston Globe, Thomas Kochan, co-director of the Institute of Work and Employment Research at the MIT Sloan School of Management, noted that critical drivers for the success of the campaign included: the creative use of social media (including 90,000 "likes" on the Save Market Basket Facebook page); "highly visible rallies" that drew media attention; and the overall appeal "to a public thirsty to find ways to reverse trends in income inequality, unfairness, and greed in economic affairs."

But he also said a company culture such as Market Basket demonstrates that employees should have "as big a stake in how a company is run" as shareholders.

He concluded, "Time will tell if this fascinating case will be just a flash in the pan or a forerunner of a new worker-led reform of how American businesses compete."

BrainTrust

Discussion Questions

Why are uprisings by employees such as Market Basket so rare at retail? What lessons should be gleaned from the Market Basket turnabout?

Poll

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Ryan Mathews
Ryan Mathews
9 years ago

The answer to the first question is simple. People are afraid of losing their jobs.

There may have been some victories between the “Bring Back Jack” campaign that saw Jack Brown reinstated at Stater Brothers and the Save Arthur T. efforts, but they are hard to recall.

Below the obvious worker self-interest however is another critical point. Most bosses aren’t worth saving, at least from their employees’ point of view. Both Jack Brown and Arthur T. worked hard at developing—and maintaining—rapport with their workers. Theirs is a lesson more CEOs ought to take a tad more seriously.

And that brings us to the second question. The answer here is that workers are human beings first and employees second and—even if management forgets the right order most of the time—the rank-and-file never does. And, human beings believe they ought to have a right in determining the course of their futures.

On a related note, while organized labor has suffered failure after failure deploying their traditional arsenal, the digital age (and the growing gap in income distribution) may be opening the door to a new golden age of organizing.

We’ll see.

Frank Riso
Frank Riso
9 years ago

Market Basket is the exception, not the rule. When you have a regional chain, and it is family owned, you may see another example of this level of support for an owner. However, in most chains today there is a lot of space between management and the store staff. Working conditions, pay differences and just not even knowing the names of top brass are more likely to be seen at retail stores. What we can learn is that treating everyone properly has it rewards. Arthur T. rocks!

Bill Davis
Bill Davis
9 years ago

These uprisings are so rare because management would threaten employees’ jobs and few people are willing to put their jobs on the line.

As someone who grew up in Massachusetts, this has taken me by surprise. Market Basket is not somewhere my family shopped growing up, but clearly they have a strong leader in Arthur T. We’ll have to see how the company rebounds after this, but at least as of right now I am glad it turned out as it did, and absolutely agree with this:

“Without good workers, the ‘job creators’ can’t make it.”

Paula Rosenblum
Paula Rosenblum
9 years ago

I think it’s great, because it was grass roots driven. The employees clearly already felt empowered, and enjoyed their jobs. When Arthur C. decided he was going to drain the chain of its cash, the employees felt they had the power to do something. And they did.

Are there lessons to be learned? I guess it depends on what kind of retailer you want to be. If your goal is solely to “maximize shareholder value” this is likely your worst nightmare. If your goal is to be a real member of the community that supports you, it’s a dream come true. Loyalty like this can’t be bought. It has to be earned.

Three cheers for Arthur T.

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
9 years ago

Market Basket is an exception because it is rare that a CEO makes employees feel valued and special so that they are truly loyal. In many more cases, employees are made to feel as though they are interchangeable and disposable parts. In that case, the employees are not loyal to the CEO or the company. One important lesson is that it is possible to create that loyalty. Another lesson is that employees at other organizations may see that it is possible to get what they want if the work together.

J. Peter Deeb
J. Peter Deeb
9 years ago

This type of uprising is rare because most companies have not had the closeness that Market Basket has had among all levels of the business over the years. Building that business in the highly-competitive New England market called for points of differentiation to succeed, and maybe the most important of all of those is the respect that all employees have for management and vice versa. When leaders recognize that all employees have value and that culture permeates the company then there is a solidarity that other companies do not have. We would very rarely see this type of support at companies where there is tension between management and the unions. In fact many rank-and-file employees at some companies feel that their union is their “leader” as opposed to the company that employs them.

Tony Orlando
Tony Orlando
9 years ago

If you value your employees, than work beside them, try to listen to their issues, and above all make sure that the service level you demand is understood by all employees. The owner or CEO needs to engage with the customers the same way he or she expects the employees to act, and when they see how the CEO engages people, believe me, it will rub off on them.

There will always be disgruntled employees, who can not get out of their own way, and they must be weeded our quickly, to prevent the bad attitude from spreading. Make your employees accountable, and reward them the best you can, and they in turn will reward you with a positive day of work.

Ed Rosenbaum
Ed Rosenbaum
9 years ago

Congratulations to the employees of Market Basket for their perseverance and commitment to the leadership of Arthur T. It shows respect and dedication to the organization he developed. It shows a commitment to bring the customers the best in service. The closest grocery chain I can think of that resembles Market Basket is Publix and the one in the same area whose name escapes me, Stu’s?

Doug Fleener
Doug Fleener
9 years ago

Let me first say that my family are loyal Market Basket shoppers, and are pleased about the outcome. After boycotting the store, we are happily back shopping at the Burlington, MA store.

There are a few things about Market Basket that made this rare. First, the longevity of the employees. Market Basket was and still is a company that people stayed at for many years. Even frontline employees like cashiers and stock associates. Something we don’t see in many other retail organizations.

It is a very flat organization. Because there weren’t a lot of extra layers of management, there weren’t other people who stepped into the roles of those who walked out.

Third, the employees are treated in a way that they would want to fight for the CEO. Part of the reason Arthur T. was fired was because of how he well he compensated the employees.

I think the lesson is very easy. Treat your employees great and make it a wonderful work experience, and they in turn will treat your customers great and make it a wonderful shopping experience. In Market Basket’s case, that came full circle. Oh yea, keep prices low too.

W. Frank Dell II, CMC
W. Frank Dell II, CMC
9 years ago

The difference here is Market Basket has the feel of a family-owned business. Family members still run the company, not some hired guns. Senior management got out of the headquarters ivory tower and into the stores where employees see they put their pants on one leg at a time just like them. When employees never see anyone from headquarters, they are unlikely to have much loyalty. There was a Southern chain where every Christmas the most senior managers visited every store. This let employees know there were not working for some faceless company. In this case, I think there was some help when the relatives were painted as just wanting money.

Ian Percy
Ian Percy
9 years ago

In my book “Going Deep” I had a chapter titled “The Beloved Leader.” It would be very hard for even the BrainTrust panel to list a dozen “beloved leaders,” they are rare indeed. The late Warren Bennis, who made a bigger contribution to understanding leadership than pretty well anyone, noted that leaders “operate on the spiritual resources of an organization.” True leadership is indeed a spiritual function and it is only on that level that one can truly be “be-loved.”

The problem most of us have is that we assume we have binary choice: 1.) Make money and be hated or 2.) Be loved and go bankrupt. This is a false choice, but a hard one to break. Goodwill, meaning, generosity, kindness, consideration—and even love—can lead to prosperity beyond imagination.

Ian Percy
Ian Percy
9 years ago

Sometimes I wish the universe had better timing. Just after sending my submission about beloved leaders, I saw the Business Insider article about the IBM hymnbook of 1937. One of the corporate songs was titled “Ever Onward” and had this refrain:

“Thomas Watson is our inspiration, Head and soul of our splendid I.B.M. We are pledged to him in every nation, Our President and most beloved man.”

(Mind you, it does sound like North Korea stole the IBM song and just substituted the name Kim Jong-un.)

James Tenser
James Tenser
9 years ago

Job actions, especially strikes, are costly for retail workers, not just for chain owners. Fear of job loss is a primary inhibitor, naturally, but so is the short-term economic pressure brought by even a few days’ interruption of wages.

We judge the Market Basket story to be remarkable in large measure because we observe so little union activism happening today. Other factors—participation from mid-management, community support, and an exceptionally charismatic leader in Arthur T. Demoulas—made this a TV-movie type story that the media loves.

Market Basket is different from most supermarket chains because it has been family controlled. So it’s also ironic that the recent drama boiled down to a difference in business priorities within the Demoulas family.

Arthur T acted from what I would judge to be enlightened self-interest. Worker unrest helped him to win the battle of public opinion and negotiate a deal to control the company. At the same time, I believe him to be sincere about the company values he espouses. Let’s hope the pressure of the buyout financing doesn’t force compromises in culture down the road.

Craig Sundstrom
Craig Sundstrom
9 years ago

I think we all “get” why this is rare: few companies have a CEO who the employees bond with enough that they wish to risk their jobs for him (or her).

But there’s been little—if any—discussion about the reason for the support, beyond the claims that Arthur S was “trying to extract more cash,” and with it the implication, presumably, that Arthur T was leaving the cash in the company. But what was he doing with it (there)? Was it going toward things like maintenance and marketing, which could certainly grow the company (if wisely spent); or was it going toward oversized wages/benefits, which might or might not benefit the company—depending on whether/not they were getting oversized performance in return—but toward which employees obviously have a potential for bias? It would certainly be good to know which before commenting on lessons learned.

David Livingston
David Livingston
9 years ago

Market Basket is a cult. Artie T was Santa Claus and took very good care of his employees. Perhaps to the point it was financially irresponsible. Of course when someone takes care of you to this degree, employees simply can’t imagine taking a step back. Now it might be hard for Artie T to maintain the gravy train with all debt he must take on. And I’m not so sure Artie S is through playing cat and mouse with Artie T and the employees.

I don’t expect a happy ending anytime soon. These uprisings are rare because not very many companies will make so many sacrifices to care for employees. Artie T hung on a cross for these people and they are grateful. The lesson learned here is take care of your employees, but don’t go overboard to the point that employees are so committed, they walk off their job, willing to lose their job just because there is a management change.