Publix Pursues Vision of Service and Ownership

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Publix Pursues Vision of Service and Ownership

By Mike Troy - 11/16/2020
Publix Pursues Vision of Service and Ownership
Publix Super Markets CEO Todd Jones

Todd Jones may be the CEO of Publix Super Markets, but it’s clear that he’s never let that title, or any executive position before it, get in the way of understanding the intricacies of the grocery business.

Walking through a Publix store in the retailer’s hometown of Lakeland, Fla., Jones provides a master class on the nuances of baked goods and fried chicken, and the merits of hand-stacking avocados, color-blocking in produce and leveraging artificial intelligence to inform automatic-replenishment decisions.

Jones grows particularly animated when describing how to tell a perfectly baked sub roll from one that wasn’t properly placed in a tray so that the ends were allowed to touch during baking. He’s pointing at barely perceptible cracks in the shell of the bread that will make for the perfect sandwich.

“There should be on the white rolls a little bit of a crack on the shell of the crust,” he explains. “That’s a good roll. It’s going to have just enough bite in it that the little pieces are going to break off in your mouth and it’s going to be nice and pillowy inside. You won’t see the cracks as much on the wheat.”

Jones also gets excited when talking about the perfect crust on a piece of double-breaded fried chicken, a new Boar’s Head brand pre-sliced program that takes pressure off the deli counters, and the proper way to stack cookies in a clear package so that they’re face up in alternating rows. Working his way around the perimeter, he extols the virtues of hand-stacking avocados to achieve an extra day of shelf life and the appearance of a perfectly merchandised produce department.

“When you walk into produce, you shouldn’t even notice there are fixtures there,” he advises. “If you notice fixtures, we haven’t done a very good job with how we merchandise.”

Nearing a display of bananas, the 30-year Publix veteran who started out as a bagger and became CEO in 2016, grows particularly energized.

“You want to talk about science and innovation -- bananas are the hardest thing in the world to get right every single day,” he says. “To execute perfectly on bananas is really hard.”

Jones goes on like this for roughly an hour, stopping at key departments to expound on best practices for presentation and the importance of relentless consistency. In seafood, he talks about the company’s fresh, never-frozen value proposition, techniques for presentation in the display case and how to handle delicate filets. In the nearby sushi case, it’s about making sure the drizzle on top of products goes in the same direction. In the nearby meat department, he elaborates on a process called “shingling,” which involves placing cuts on a tray so that they’re the most attractive.

This passion for food, this obsession for consistency of execution from Publix’s top executive, goes a long way toward understanding why the retailer is consistently ranked by shoppers as one of the nation’s premier food retailers.

Why the Publix Way Works

The retail industry is filled with entrepreneurs who took risks and built spectacularly successful businesses, and Publix is certainly a good example of that. George Jenkins moved to Florida in 1925 and began working at a Piggly Wiggly store. Five years later, he left to open his own store in the midst of the Depression. A decade later, Jenkins mortgaged an orange grove he had purchased to come up with a down payment for the first Publix Super Market. What really separated Publix from other companies and laid the foundation for 90 years of success was Jenkins’ decision to embrace an employee-owned structure.

Jenkins, whom those at Publix affectionately refer to as “Mr. George,” wanted employees to feel like owners of the company, so he decided to give them one share valued at $100. However, since it was the Depression and most employees didn’t have $100 to spare, Jenkins offered a $2-a-week raise, which he then withheld, so that at the end of the year, the employees had full ownership of their share.

“It was really the genesis of ownership within the organization some 90 years ago, before it became formalized in 1959,” Jones says. “You always want to make sure that new employees are aware of the ownership, but at the same time, Mr. George would also say that it requires sweat equity. It is not something that is going to be handed to you. He also established at the same time a promote-from-within organization. What’s so nice about that is you can easily see that wherever you start out within the organization, you have the opportunity for growth.”

The promote-from-within philosophy helps explain how someone like Jones, a kid from tiny Oak Hill, Fla., could start out as a bagger in New Smyrna Beach, Fla., in 1980 and advance to become CEO. It also explains why the average tenure of a store manager is 25 years.

“You get a sense early on of the opportunities you have,” Jones notes.

Publix Super Markets President Kevin Murphy

That was certainly the case with Publix President Kevin Murphy. Like Jones, he started out as a bagger at age 14, with the goal of saving money to buy a vehicle. By the age of 24, Murphy was already a store manager, and by 1991, he was part of the management team that led Publix’s expansion into Georgia. He spent the next 23 years helping Publix enter new markets before arriving at the Lakeland headquarters as an SVP. Murphy was named president in late 2018.

“I am someone who benefited from the culture established by Mr. George,” asserts Murphy. “We have a lot of love and appreciation for the foundation that he set for us.”

There have been a lot of Mr. Georges over the years who helped perpetuate the Publix culture, and for Murphy, that individual was former CEO Ed Crenshaw.

 “He was the president and CEO for the majority of my management experience, and he certainly epitomizes Mr. George and was a fantastic leader,” says Murphy. “He’s been that Mr. George for a lot of people, and today Todd is that Mr. George for a lot of people. We’ve been fortunate that we’ve had excellent leadership throughout the history of Publix.”

A Culture of Accountability

With ownership comes accountability, and a key aspect of ensuring consistency is setting expectations. Jones’ view is that Publix has to develop people to win their hearts and minds, and then fully invest in them, and to use a football metaphor, not let them outrun their coverage.

“We’re not going to put a person in a role they are not capable of doing and are willing to accept the consequences,” explains  Jones. “We are going to make sure that person is as proficient and set up to win as possible. That way, you are front-loading accountability, and it is a great thing, because an associate knows exactly what their responsibilities are and the expectations the organization has of them.”

Of course, the larger an organization gets, the more challenging it can become to stay grounded with front-line employees and maintain the type of culture that got the company where it is today.

“We try to manage with servant leadership, and you have to lead with passion,” says Jones. “Mr. George would be the first to tell you that if this isn’t something you’re passionate about, you would be better off if you went somewhere else.”

He adds that it’s also important to be a realist and let employees know that jobs at Publix aren’t easy, and that they’ll have to wake up every day and work hard at them. At all levels of the organization, there’s an emphasis on cross functional training as a key enabler of performance.

“At Publix, we pay attention to team results first, not individual department results,” notes Jones. “When you start thinking about the attention to team results, you start to reach across department lines, and you can help lead with passion, because you’ve got to get involved. You can’t have someone in manufacturing, warehousing and distribution who doesn’t have any knowledge about what they are delivering to the stores. It won’t work.”

It’s Not Just a Grocery Store

Employees at Publix are taught early on that they’re part of something special, and the company’s employee ownership model is a huge factor in bringing authenticity to that point of view. When asked what makes shopping at Publix a pleasure, Murphy points to culture and the ownership model.

“Everything goes back to culture, and it can be defined a lot of different ways,” he replies. “I define it as ownership. It is incredibly important to always talk to our associates about how fortunate we are to be owners and contribute to the success of a Fortune 100 company. How blessed we are that Mr. George had the insight and heart so many years ago to give back a large portion of his company to the associate helping to make the company successful. That is very uncommon.”

Sharing the company’s legacy is a continual process due to inevitable turnover and the onboarding of the next teenage bagger who could become a senior executive like Jones or Murphy.

 “How do we help them understand what makes Publix different, and how do we help them understand we aren’t just a grocery store?” muses Murphy, referring to employees who are newer to the company. “If people think like owners, they are going to behave like owners.”

Another aspect of making shopping a pleasure means making sure employees are set up for success at store level. Standardized processes and structure facilitate training and help employees take care of customers.

“This isn’t a complicated business, and it really hasn’t changed very much over our 90 years of operation,” observes Murphy. “The tools and the technology we use have evolved and changed, but it is still really about offering premier-quality product, fantastic service, and making people feel at home and comfortable.”

How Publix Defines Innovation

Publix isn’t the name seen in the latest headlines about experiments with drones, autonomous deliveries or in-store robots, and that’s OK with Jones.

“Some people get confused about what really is innovative or what has evolved,” he says. “We may not do innovation to the absolute cutting edge, but we do a lot more innovation than people see. Most of our aggressive innovation is on the back side, where we know it’s going to impact the customer on the front side. You’ll never see it physically, other than noticing inventory is in a better position, or store locations are improved with parking lots that are easier to get in and out of.”

Innovation in information technology is always hard to see, but Jones notes that it shows up in the efficiency of the pharmacy systems, the security of payment and data storage systems, and an auto-replenishment system that benefits from fine-tuning by artificial-intelligence systems.

“Where innovation matters to the customer on a consistent basis is where we will lean in hard,” says Jones. “There is also a difference between innovation and continuous improvement. We believe the winners for the long haul continuously improve inch by inch every single day on a million things, versus one thing that might work one out of a million times.”

Inside The Publix Green House

Walk past the loading docks of a Publix warehouse in Lakeland and up a ramp, and you step inside a 35,000-square-foot space few people outside of Publix ever see. Welcome to The Green House, a facility Publix opened several years ago to focus on innovation and process improvement. Just inside the entrance, in large letters on a wall, Publix sets the ground rules and philosophy for those using the facility to help invent the future.

The sign reads as follows: “When we at Publix look ahead, we are also glancing back to be sure that nothing we do, no new device we employ, no new design we conceive, departs from our original principle – to make Publix, in every way possible, the market where shopping is a pleasure.”

The quote is attributed to Mr. George, a grocery industry icon who nevertheless tends to be overlooked somewhat when it comes to conversations about industry innovators.

“I would describe The Green House as a learning lab where our subject-matter experts and teams from different units can test and innovate,” says Murphy. “Innovate doesn’t always have to be brand-new or mind-blowing; it can be evolving or making tweaks to improve efficiencies.”

Seated near a replica of a Publix deli constructed of white foam core board to show the exact location of fixtures, Murphy describes the value of being able to experiment with operational adjustments in such a setting.

 “We are able to come in here unobstructed without impacting the customer, which is most important to us, and we can get all of the right people together to bless a new process, program or piece of equipment,” continues Murphy. “We can make sure we get it right in here, and then, when we put it on the blueprint and build it, we know it is going to be right when we spend the money and put it in a store.”

A lot of retailers operate innovation labs, and they tend to focus on digital innovation. Publix’s facility is geared toward everyday operational considerations that affect employee performance and the ability to make the store experience pleasurable.

 “Most of what we do here is really about evolving,” Murphy observes.

A History of Innovation

Amazon is often heralded as a model of retail innovation, given its technology roots and new approaches to serving shoppers, such as the frictionless checkout experience of Amazon Go stores. Long before Amazon introduced its “just walk out” technology, however,Publix was dazzling shoppers with innovations of its own that unfolded over decades.

The first Publix Super Market that George Jenkins opened 80 years ago set a new standard for innovation at that time and was described as a “food palace.” Built of marble, glass and stucco, with elegant terrazzo floors, the store had fluorescent lighting, electric-eye doors, frozen food cases, piped-in music, 8-foot-wide aisles and open dairy cases. It’s important to remember that it was 1940 in central Florida, a state that was still a relative backwater at the time, with only 2 million residents. Most of those in the state didn’t have air conditioning back then, but Jenkins’ new Publix store did, and that made shopping there a definite pleasure during Florida’s sweltering summers.

Jenkins understood the importance of “store experience” a half-century before retailers embraced the concept as a means to blunt the impact of e-commerce growth. Publix adopted its now-famous tagline of “Where shopping is a pleasure” in 1954.

Innovation can also take the form of process improvement, service enhancements and real estate strategy. For example, Jenkins recognized the value of a growth strategy focused on market density to improve supply-chain efficiency and leverage expenses such as marketing. The company began the 1960s with 55 stores, but ended the decade with 150, all of which were in Florida. By the end of 1990, the store count had increased to 375 locations, and Florida’s population was up to 13 million. The following year, Publix opened its first store outside of Florida, when it entered Georgia.

Such practices are common today, but they were innovative approaches at the time. Publix also took action in areas earlier than its competitors by opening a bakery plant in 1972 and a photo lab in 1975. It rolled out point-of-sale scanning in 1980, which was a huge development at the time, as employees no longer had to price items individually. The company rolled out an ATM network two years later, and opened its first pharmacy in 1986. Publix dabbled in grocery delivery in the early 1990s, pulled back, and then relaunched the service in 2016, adding curbside pickup the following year.

In 2018, Publix reintroduced its GreenWise format after that concept had first debuted in 2007, seeking once more to capitalize on natural and organic trends.

“We’ve gone down this path before, and now we are back at it again,” CEO Jones says of GreenWise. “We don’t want to miss the opportunity as it continues to grow, because our data shows there is a customer there.”

As for the new crop of GreenWise stores, Jones notes: “The feedback has been great. People love the experience and the product mix, and overall, they have been satisfied at this point.”

What’s Next

“More of the same” is probably the best way to describe the coming decade for Publix. The company has a formula that works: an obsession with taking care of customers.

“We like to say keep the As [associates] and Cs [customers] before the Ps [processes],” observes Jones. “As Mr. George would say, ‘Treat customers like kings and queens, and your associates as your most important asset.’ The processes are going to get done. It really is about staying close to the customer, and they are moving faster than ever, and there is a broader set of customer dynamics than there has ever been.”

Jones and Murphy are focused on positioning Publix to take care of shoppers’ needs, whatever form they take. And what’s clear from the comments of both is that they view employee ownership, accountability, advancement potential, innovation and a strong sense of community as a winning combination.

“As the communities go that we operate in, so does Publix,” asserts Jones. “Mr. George was asked once how much he would be worth if he hadn’t given so much away, and his response was, ‘Probably nothing.’ He understood the only way to receive was to give, and he established that in the genesis of the organization. To see our teams carry forward his vision is very humbling.”