Skip to main content

INDEPENDENTS REPORT: Making the connections

Imagine being a leader who can envision what your organization should be, but can't find the right buttons to push that will move that ideal organization from your brain into the marketplace.

As food retail managers, we've all been there. Experience reminds us that on our own, we simply can't provide all the momentum needed to successfully navigate the critical moments that lead to healthy growth and change. For new directions to take root, we've got to rely on our employees.

According to John Eldred, president of Ambler, Pa.-based Transition One Associates, successful executives often question how best to transform their leadership intent into organizational momentum. "What matters most is making people feel strategically connected to the company," says Eldred. "Employees must at all times have a clear picture of where their organization is going, and they must have faith in the person steering the direction."

The co-founder of the Wharton School's Family Business Program, Eldred outlines the three components that he says lead to organizational connectivity: Effective strategic communication, alignment, and motivation.

Strategic communication

Eldred helps his clients determine just how connected employees feel to their work, by administering a strategic communications survey to associates at all levels.

"This is not a happiness survey," clarifies Eldred. "It's a simple nine-question survey to see if employees are 'in the know.' People don't need to be happy at work -- they need to be committed. When employees are committed, they're willing to put off immediate gratification and deal with sometimes difficult conditions in order to gain a greater goal. The result? Organizational maturity."

Using a scale of one to seven, with one meaning "strongly disagree" and seven standing for "strongly agree," employees are asked to rate how much they agree or disagree with a series of statements addressing various dimensions of communication, including:

-My knowledge of the general system direction is clear.

-If I were running the organization, I would be following the same general direction.

-I feel I am clear on the competitive challenges facing the system.

"Any time we capture an average score of five or higher," says Eldred, "I know I'm working with a good organization. The survey serves as a very powerful snapshot of employee commitment."

Strategic alignment

"The second component to connectivity involves aligning a company's strategy, culture, and structure," notes Eldred.

He explains: "Let's consider the 100-store family-owned supermarket chain being led by a third-generation grandson. Realizing that the grandson is incapable of managing the company alone, the board of directors searches for and recruits a talented executive who's hired as the grandson's alter ego. One of her first recommendations is to decentralize, thereby granting authority to managers to operate each store as if it were their own business. Corporate facilitates the decentralizing by providing all necessary tools, such as marketing intelligence, a marketing budget, IT support, and more.

"The process works as long as the family is willing to fully adapt to a new management structure," he continues. "While it's easy to change an organizational chart on paper, it's extremely difficult to change the emotional wiring and mental mapping that employees have experienced for years."

Strategic motivation

According to Eldred, once all associates feel "in the know" and strategic alignment has occurred, a leader must next introduce a motivation program that rewards all associates for pulling in the same direction.

Such can be accomplished by implementing phantom stock and employee stock ownership programs (ESOP), or the reward program that Eldred most favors: gain sharing.

"Gain sharing is a remarkable way of dealing with strategic motivation," observes Eldred. "Every associate participates in the program. Most importantly, everyone understands what's being measured and the formula being used to measure the gains."

He adds: "The structure encourages employee ideas to improve the numbers. Every month the numbers are reported and associates have a dialogue on how to continually improve."

Regarding the distribution of gain-sharing funds, Eldred notes, "Traditionally the amount of savings or gain is split two ways: 50 percent to the company, and 50 percent to an employee pool where either checks can be awarded to associates or the money can be deposited into an employee education fund. However, some companies distribute the funds by thirds, with one-third going to the employees, one-third staying with the company, and one-third allocated to a 'rainy day' fund.

"Whatever reward program is implemented, whether it's an ESOP, phantom stock, or gain sharing, you must move away from a traditional 'class' structure, which portrays the owner/operator at the top and all hourly associates at the bottom," stresses Eldred. "It's important to remember that all people are capable. A strategic motivation program, when properly managed and communicated, will encourage everyone to work smarter and better together."

Overall, Eldred says he believes that the best leadership is self-leadership. He concludes: "Three conditions must exist to create self-leaders: communication, strategic alignment, and a progressive rewards program. When you have those, things will come together in a catalytic way and you'll have lift-off."

Independent Retailing editor Jane Olszeski Tortola can be reached at [email protected].
This ad will auto-close in 10 seconds