How to Build a Culture that Holds Leaders Accountable
As CEO of Foodstuffs North Island, New Zealand’s largest grocery retailer, Chris Quin wanted to improve the overall leadership culture of this well-established co-operative by making his leaders more accountable.
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As CEO of Foodstuffs North Island, New Zealand’s largest grocery retailer, Quin wanted to improve the overall leadership culture of this well-established co-operative by making his leaders more accountable and more consistent across the span of this organization that is very geographically spread. This was particularly important for Quin at the store level, where leaders need to be able to make real-time decisions to meet customer needs and solve problems.
This was no simple challenge; Foodstuffs North Island is a co-operative, which along with sister-co-operative, Foodstuffs South Island, has over 600 owner-operated stores across multiple brands, employing collectively more than 40,000 people and grossing more than $8 billion NZ in annual revenues.
How do you impart leadership skills like accountability and consistency across an organization so large, so varied, and so geographically spread? There were no easy or obvious options available and that was a concern because, as Quin noted, leadership is the cerebral cortex of a high-functioning retail chain.
“This is a 98-year-old organization that has enjoyed success for a very long time,” Quin said. “For the most part, we haven’t faced many serious challenges in the marketplace. But there are challenges coming along with a market transformation and for the most part, our leaders had not been tested in this kind of scenario.”
Online competition from Amazon and big-box behemoths like Walmart and Costco have been transforming the retail grocery industry across the globe, although not yet established in New Zealand, it’s a matter of time before Foodstuffs has a global competitor. In this kind of environment, Quin said, it’s important to know that leaders are all on the same page and accountable for outcomes. It can prove especially difficult in a co-operative model where owner-operators are often very protective of the unique store cultures they’ve built.
“We have always strived to be the most customer-driven retailer in the world. But to do that consistently in all our stores, we need customer-driven leaders and store owners who are not only good at customer service but willing and able to use data to make decisions. Getting everyone to work together to accomplish these things is a challenge.”
Quin started by asking all his key leaders—both in the co-operative support offices and supply chain—to pledge their commitment to better leadership through a formal contract.
And not just any contract—The Leadership Contract—an LHH leadership development program based on Vince Molinaro’s New York Times bestselling book of the same name. In 2019, Quin brought Molinaro and his team to New Zealand to work directly with executives, support office and supply chain leaders and embed the principles of accountable leadership.
Quin said he was drawn to the four pillars of The Leadership Contract (TLC), which state:
• Leadership is a decision—make it,
• Leadership is an obligation—step up,
• Leadership is hard work—show courage and resilience,
• And Leadership is a community—collaborate.
Quin said The Leadership Contract terms were simple and elegant, making it easier to communicate across an organization with a co-operative structure.
“Every organization struggles with developing good leaders,” Quin said. “You have reluctance, partial implementation, and passive acceptance, where people nod and grin at you and then don’t do what you’re asking them to do. That is a real challenge in a company with a co-operative structure, where you don’t necessarily employ a command-and-control approach. The Leadership Contract ensures we’re all operating on the same page.”
TLC rolled out on a number of different streams into the Foodstuffs North Island leadership hierarchy. Work was done with the support office executive team to ensure they were all on board. Molinaro then travelled to New Zealand to deliver a keynote address to leaders and store owners. Finally, the workshops were organized to embed the four pillars of TLC, while HR pledged to create metrics to measure the outcomes.
Quin said he was keenly aware that one of the biggest weaknesses of leadership development programs is that participants can be too passive or even reluctant to implement new strategies and behaviors. “Partial implementation is the enemy of many leadership development programs,” said Molinaro. “You need to ensure that everyone is buying in, everyone is committed. Or the whole thing will be a failure.”
To drive home the importance of TLC and its application to all day-to-day leadership activities, Quin made some significant changes have been made in the way the performance of senior leaders would be assessed. Now, Quin said, these leaders will be measured not only by bottom-line performance, but also on the degree to which they are collaborating with their peers and demonstrating accountability to direct reports.
De-emphasizing bottom line financials while amplifying the importance of principles like commitment and collaboration has been a challenge for some Foodstuffs leaders to take on board, Quin noted.
“We have some very successful, highly logical people who didn’t understand what we were doing at first. They said, ‘What is this? My numbers are good and that means I’m doing a good job.’ But for the long-haul, we need to start accepting that emotional connection between leaders is good for performance.”
It’s still early days when it comes to measuring outcomes from the implementation of TLC, but Quin noted that most major HR indicators—engagement scores, turnover, and sick leave—all seem to be pointing in the right direction.
For the leaders who have been exposed to The Leadership Contract and the new emphasis on accountability and collaboration, the experience has been invigorating.
“I will think more about how my colleagues and my peers are interacting in the room,” said Lindsay Rowles, the company’s General Manager of Membership and Property. “It’s very easy for us all, when we’re busy, to make snap judgements and come to conclusions. But to really take the time to figure out where that team member is coming from and basically work on the assumption that everybody is there to help us get a better result overall—and just be very mindful of that.”
In the end, Quinn said he will be extremely satisfied if the company’s leaders demonstrate a real commitment to accountability in their day-to-day work.
“They’re focusing on how personal accountability for their own behaviors really empowers the organization. Our commitment to each other on a very simple thing, which is that everyone has everyone else’s back. This leadership team is a community of connected senior leaders.”
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