Something big's going on in the Boston retail landscape.
Non-unionized, company-president-loving workers have launched a
weeks-long strike. It has seriously shut down business as usual
at The Market Basket. And now rumor has it that grocer Hannaford
Bros. may bid for the company.
There's a strikingly personal story here, but there's also a
big-picture one. In the last year, there have been many
high-profile strikes aimed at management at retailers like
. That's why this one is amazing: These are non-unionized grocery
demanding that their ousted president return
. That's some crazy talk.
In reality, it's not crazy talk at all. Every top corporate
leader, whether a president or a CEO, should aim to be such a
good leader, and so empathic about his or her employee "family,"
as to engender this kind of employee loyalty.
In many ways, positive businesses can make all of America
happy. When businesses take care of stakeholders, success is in
the cards. Things seemed to be going well at The Market Basket
under the former leader, but now the picture has fractured.
Beyond the business textbooks
Many Market Basket workers seem to know more about what makes a
great company than you'd find in business school textbooks. You
also might never find in the textbooks that sometimes people will
give up paychecks for something they really believe in. But you
can find that in the pages of newspapers covering The Market
The sad situation in Boston was set in motion by a longtime
family rift. Former president Arthur T. Demoulas - affectionately
known as Artie T. -- was pushed out of his role in June. The
board of directors, which is controlled by his cousin, Arthur S.
Demoulas, gave him the boot and put James Gooch, the former CEO
, and Felicia Thornton in place as co-CEOs.
Investors will likely see some good reason to worry that a
high-ranking person with "RadioShack" on his resume is in the
front office, given that company's struggles. Meanwhile, there
are many reasons why employees have every reason to feel as if
the business ran perfectly well under Artie T.
Under Artie T.'s design, Market Basket employees receive:
- A profit sharing program
- College scholarships
- Internal promotions
- Minimum wage is $12 per hour vs. Massachusetts' $8 per hour
He's also apparently a really nice guy. He did the kind of
thing once that more top leaders should do: In the tough times in
2008, he dug into his own pocket to make sure employees would get
bonuses through the profit-sharing plan.
Given the Demoulas family's warring ways, apparently the real
family Artie T. has embraced is his employee family. Market
Basket's top management has a reputation for long tenure, and
lack of turnover says a lot about a company's long-term strength.
It also saves a company money.
Stakeholder value theory espouses the idea that if companies
take care of their employees, customers, and communities,
everyone will benefit, including shareholders who are looking for
financial returns. Obviously, this theory eschews short-term
profit maximization for shareholders at the expense of everyone
else. For companies like
Whole Foods Market
, this management concept has built highly successful
The current management at Market Basket has accused Artie T.
of exhibiting financially profligate ways, but his stewardship
has produced a profitable business, not a money-losing one -- a
real achievement in the grocery industry. Although Market Basket
has less than 100 stores, it generates billions in sales, turns a
profit, and obviously hasn't taken its financial success out of
its employees' hides.
Yet given some of the current management's "reasons" to oust
Artie T., employees can't be blamed for worrying about cost cuts
and "profit maximization" -- which very well could come out of
Feel the love
Every management team and board in America should aspire to
create the type of loyalty at work in the Market Basket
Workers who are willing to go unpaid to stand up for your
leadership is no small thing. Customers vocally boycotting is
also a major business risk for any company.
The situation has also done something that corporate
managements should dread -- circulate on social media.
Crowdsourcing through GoFundMe is raising funds to help out some
of the striking workers.
Artie T.'s treatment of employees has clearly created engaged
ones -- striking hits the word "engaged" on a bunch of levels.
Engaged employees drive financial value -- that's a fact, not a
theory. Just recently, the National Bureau for Economic Research
posted a report compiled by researchers from Wharton Business
School and Warwick Business School. They found that in markets
like the U.S., companies that took care of employees tended to
outperform the market.
Hopefully the Market Basket customers and employees will get
their leader back. The board and all bidders like Hannaford
should recognize that if they don't, they may end up with a shell
of a grocer. Not only should a company have a good leader,
workers and customers are actually the lifeblood of every
Regardless of what happens in this messy situation, there are
big lessons about how we should view business in America. Caring
and empathy work. If work's like a family -- and not a
dysfunctional one -- every stakeholder wins.
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The Market Basket Strike Really Matters
originally appeared on Fool.com.
John Mackey, co-CEO of Whole Foods Market, is a member of The
Motley Fool's board of directors.
owns shares of Costco Wholesale and Whole Foods Market. The
Motley Fool recommends Costco Wholesale, McDonald's, and Whole
Foods Market. The Motley Fool owns shares of Costco Wholesale and
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