Pursuing Significance
Robert (Bob) Aiken, president and CEO of U.S. Foodservice, sat down with HOW Online contributor Dov Seidman to talk about the corporate commitment to be “Your Partner Beyond the Plate.” The initiative is much more than a new marketing campaign for the company — it is a pledge to take a long view of business, building an enduring legacy by focusing on how U.S. Foodservice does what it does as a core strategy.
Whether I’m talking to our board of directors or a group of drivers in one of our divisions, we talk about our journey to significance and the importance of balancing financial success with long-term significance.
In Part 2 of our “CEO-to-CEO Corner” series, Aiken discusses how the views of U.S. Foodservice’s two largest shareholders, private equity firms Kohlberg Kravis Roberts and Clayton, Dubilier & Rice, are in alignment with the organizational plan toward long-term significance. Aiken drives this effort by involving leaders at every level of the company in the creation of that vision and having management embrace and live the values while rewarding employees for how they’re making the numbers in evaluation systems.
- Read Part 1 of the series
- Part 2 of the series
- Read Part 3 of the series
- Read Part 4 of the series
Dov Seidman: I’m struck as I find these thoughts progressive, and what I find most progressive is how reinforcing the relationship for you is between values and outcomes and significance and success — and, at the same time, it’s hard not to be mindful of the fact that it’s Kohlberg Kravis Roberts and Clayton, Dubilier & Rice that are your largest shareholders.
Here you are, answering to private equity firms where, conventionally, we think of them that it is all about the bottom line. So how do you manage that dynamic and the new enlightenment around 21st century business that comes with that?
Bob Aiken: The reputation, of course, that of private equity firms is that they slash and burn their way to profits. We were fortunate when our company was sold about 18 months ago that they new owners were KKR and Clayton Dubilier & Rice. And I’ll tell you, the very first meeting that I had with them, we talked about the fact that they wanted to build a strong company, that their investment would be an investment that they’d be in for the long term and that they saw the real opportunity here to build a significant company, one that, ultimately, will become a public company.
They understood from the very first meeting that, to do that, we have to invest capital in our business to make certain we’ve got the right assets in the right markets. That we’ve got to invest in our people at all levels of the organization to help them feel like they’ve got a career with us and they can be successful.
And then, ultimately, if we do those things, that would then engage our customers in a way that’s different from how our competitors engage the customer.
So while our new owners weren’t talking about success versus significance and how we go about those things — and their terminology was a little bit different than ours — their views about how to create a great company were in great alignment. And we never felt like we had to convince them about the right things to do.
As an example, the very first meeting of our board of directors, I had four really important capital projects, over $120 million investment, that we had not been able to gain approval on in a period of years that we had been pushing the project. In one case, we actually had been pushing the project about six years. I brought those four projects before the board in the very first meeting and said, “This is how we’re going to build a great company.” They approved all four projects.
It’s a great manifestation of the support that we have from our sponsors. We are well aligned; we are not at odds with them in any way about the importance of building a proud legacy.
Seidman: How are they now engaging with your terminology? Because language matters, how we talk about our business influences how we think of it. You know, most thoughts that we have are linguistically formed. In the words we choose, if you underscore the word “how,” then there’ll be more emphasis on how we do things.
And, if you underscore the word “significance,” you’re, hopefully, capturing people’s imagination and being other-regarding, truly trying to make a difference in the lives of your customers and other stakeholders. So, how are they responding to the actual terminology? Are they embracing it as a cornerstone, as central to the mission or is it just good marketing?
Aiken: No, I would say this: Dov, to really achieve cultural change within an organization, you have to talk about the same things at every level of the organization. And you have to repeat yourself with great frequency.
Whether I’m talking to our board of directors or a group of drivers in one of our divisions, we talk about our journey to significance and the importance of balancing financial success with long-term significance — what we’re trying to create in terms of the legacy at U.S. Foodservice and how it is we’re going about to do those things. You could talk to people at any level of our organization and they would be able to give you a view about the values or our company, what we do to try to live those values and how it is we’re trying to create a sustainable, successful business over the long term. That’s true for our directors and our board of directors. I think they have really fully embraced the corporate culture that we’re creating and are working to do their part to make that culture a reality.
Seidman: That’s one stakeholder: your board and your shareholders. In my experience, I sometimes see that when a leader, like yourself, or another one that had such a clear vision and appreciation for the relationship, for example, between success and significance and living values, sometimes the other leaders of the company say, “I can just focus on business because our fearless leader, the guy at the top, is so about values, he’s always talking about significance, that I don’t need to be.” And then, when I observe that happening, I see that these companies aren’t really able to make as much progress as they would aspire to. How are you meeting the challenge of truly inspiring and enlisting the next 50 leaders of the company so that they can stand up with you and truly make a wave and cascade this? And if you’re just one person doing it, I think you’d admit that would be quite an impediment, right?
Aiken: I think your analogy of making waves is exactly the right analogy here. The risk of being a CEO is that you become disconnected from your organization, that you’re standing up and talking about things that are not relevant to what others are talking about. When you define a vision, it’s very important that you engage people at every level to help you to execute that vision.
You started your question by saying that I was a person with a very clear vision about what we want to achieve here. I will tell you, we are very early in our journey to significance, and our vision is not as clear as it will be over time.
One of the ways to really engage our company is to involve people at every level in the creation of that vision. I have a council of 10 of our top sales reps from around the country and I get together with them a couple of times a year, and we talk about what it is that we can do to help touch our customers more effectively. Then we take those ideas and we make them a part of our business model. And suddenly, I’ve got 10 people who are willing to do the wave with me, who are very influential within the organization. And they go out and start doing that wave because they know we’re listening.
Then I bring in people who are our top 50 leaders and we sit down for two days every six weeks and talk about where we’re going as a company and what it is we have to achieve, and we listen very carefully to what their opinions are. We hold them accountable to what we want to accomplish. And then I know when they go back into their management roles, they’re talking about the same things that I’m talking about and that we’re not disconnected.
So it takes time to build a wave. I do find that as you build that wave and you get more people to stand up as it’s going around the stadium that each time it goes around, you get more and more people to stand up. But the way to do that is to engage them and make them a part of the vision that you’re trying to communicate. That resonates and it is certainly resonant with the broad population of colleagues.
Seidman: What do you do if someone from the executive team or senior leaders of the company aren’t standing up with you, because that’s tantamount to being counteractive — someone trying to get a wave in an opposite direction almost?
Aiken: It’s a very interesting question. I think it’s a real issue for anybody who manages a large company because, undoubtedly, people have their views and their set of prior experiences and life experiences that they bring with them into any job. And so you have to have that uniformity of vision at the top. I’ll tell you, if I had people who were part of my senior staff who I really felt were not out embodying the values and supporting the vision or our company, that I would spend an awful lot of time with them to understand why that is, to understand where they saw issues with the vision and to try to bring them aboard.
But, ultimately, they have to get onboard and the only way to do that is to engage them one-on-one and to understand what the issues are to come out of a session with a common understanding about how important that vision is. I feel fortunate that our senior leadership team has embraced our focus on significance as well as success.
But everyone, particularly in times like these, sees a little crack in the armor, and then you have to sit people down and say, remember what we’re trying to achieve here and don’t give up. Ultimately, this is going to support our success and help us to build to where we want to get to. But it takes reinforcement, it takes commitment and, as a leader, it takes enthusiasm around what you’re trying to accomplish. As a leader, if you’ve got other senior leaders that you just can’t get on board, then you have to have a different conversation because you can’t have such a central element of what you’re trying to accomplish being undermined by people in other senior leadership positions.
Seidman: And do you, as the most senior leader, back all of this up with who gets promoted, who makes the most money — meaning, are you explicitly rewarding those people who can make the numbers but also how they make the numbers, which matters just as much?
Aiken: In our performance management system, we look at two things. We look at the execution of our strategies and evaluate people based on how they’ve executed those strategies and the financial success that drives because, ultimately, you have to pay your mortgage, right? But we also look at their embodiment of the values of our company, for everyone here who has a performance evaluation in our company, which is thousands and thousands of people. For every single one of them, their manager talks with them about their embodiment of the values and their support of those values and how they live within those values — and so it is a key aspect of our performance management evaluation process, for how people are promoted and how people are paid. If you don’t draw that linkage into compensation and evaluation systems, it leaves you at risk of being disconnected and not really driving what matters. So we have made that connection in our compensation and evaluation systems.
Seidman: You said that it starts in many ways with the sales force because they’re the embodiment of the company. If you and your top sales leaders were to get together for an afternoon and I asked them the following question, “Please find your top 50 performers. Let’s send them to Hawaii as part of Bob’s President Circle to celebrate their top performance. Is it fair to say that you and your top sales leaders could readily identify your top 50 sales performers based on numbers and numeric results?”
Aiken: We definitely can. In fact, we do hold what we call a “President’s Cup” each year. While we don’t go to Hawaii, we always go someplace nice. We take about the top 250 sales performers on that excursion. And we spend time talking about the business and we get to know each other and our significant others, and it’s a great trip. But you’re raising an interesting question because all of that today, the selection criteria for that sales force, is built exclusively around sales performance and sales growth.
Seidman: Here’s my follow-up question. What if we return to that meeting and what if the sales leaders can readily identify the top 250 leaders based on agreed-upon measurable performance criteria. What if we changed the question? Now find your top 250 performers based on those who consistently exhibit ethical leadership, people who get their hows right, people who can pursue significance and get their job done along the way and live the values. Could that group just as readily find the top 250 of those leaders with the same clarity and the same precision?
Aiken: Today, we could not. But I’m just thinking as you asked the question about some of the new efforts that we’re deploying to make our sales force more successful. Where we do focus more on the hows than just the results? You raise an interesting question to say, whether based on those criteria, we would have an opportunity to define success based on the hows and not just the results. An example of that is we’re working with all of our sales reps now to open new accounts because we know that opening new accounts is the real key for them to grow their business, and it’s also the hardest thing that they do.
Historically, we’ve compensated our sales management only on the gross margin dollars that their teams generated. Now, we’ve added a component to say, in addition to that we think it’s really important that you open new accounts, so we’re going to compensate you based on the number of new accounts that your team opens. So you take that to the next logical step and say, Ok, we’ve developed the how and we’ve created some compensation systems around it, what other recognition and rewards and acknowledgement could we bring to the business to really help make it part of the culture of the company?
Seidman: I assume you think you’d be a better company if the answer to the second question were as clear and as powerful as the first, meaning you and your sales leaders could identify your top 250 ethical leaders with the same clarity and certitude as you could identify your top performers. I think what you’re saying is that you’d be a better company in pursuit of significance if the answer to the second question were as good as the first and even more so if the list were one in the same.
Aiken: Yes.
Seidman: Your top 250 performers and leaders had a great overlap right?
Aiken: Yes. When you talk about ethical performers, really I interpret that to mean those that outbehave. What would be interesting about this whole thing is to look at those that have the best sales results and to also measure them against these behaviors that we’re modeling within the company and see do they really out behave the other 4,700 reps that we’ve got and is there a correlation between this behavior and success.
We may have that group; it may be that those that outbehave also outperform, and that would sure be the ultimate confirmation that we’re on the right track. But you’ve raised an interesting opportunity for me to think about today. And when we talk about being on this journey, that’s what I mean. We don’t have all the answers about where we’re going to create a company of significance, but we continue to look to define what that journey means and then to reinforce it through a compensation system, through the hows, the acts that we take to go about it and through celebrating people who are embodying what it is we want to accomplish.
Seidman: As a matter of logic, or the logic of your own strategy, you have no choice but to emphasize outbehave for this reason. If sales people are the ones having connection and dialog with customers and prospects, and you’re telling those customers and prospects that a relationship with you transcends the food and the stuff and the numbers, then sales people have to be able to engage and have conversation that goes beyond the food that they’re going to contract over. So if they don’t outbehave, how are they going to take the conversation? How are they going to foster a meaningful relationship of loyalty in a set of dimensions that is more than in your word, beyond the food?
Aiken: That’s exactly right. Let me tell you a story about one of our sales associates, a woman named Jolene in Charlotte, N.C. We had a customer down there — we have about 250,000 customers — who runs a Mexican restaurant. The owner and the employees in the restaurant speak Spanish and they had an upcoming health department inspection and they were concerned because they didn’t feel they could communicate effectively with the health department inspector, and their business is at risk, right? I mean, if you can’t pass a health department inspection because you have a language barrier, you’ve got a problem.
So Jolene went in on a Sunday morning and the restaurant owner had his entire staff there and she trained them in our food safety program in Spanish. The following week, the health department came in as scheduled and the restaurant scored a perfect score — actually over 100% — and the owner couldn’t have been happier. So not only did Jolene outbehave and create that connection with that customer but then that customer went out and talked to all of his peers and said, “Let me tell you about what U.S. Foodservice did for me and how they helped me.” That’s an example of outbehaving.
Of course, we go, how do you measure those sorts of things across a 5,000-person sales force because there’s such power in what happened there. Role modeling, providing opportunity for those kinds of encounters and engagements is critical, but then understanding when they happen so that we can reward those that make it happen is equally critical.
Seidman: Absolutely, and we tend to use the word behave. We speak to children and we say, “Behave!” We admonish them, “Behave yourself!” and usually we speak about behavior following the lack of it. When someone misbehaves we tell them to behave. But you’ve used the notion of outbehave, but you’re not saying, “Let’s behave because we haven’t,” you’re saying behavior and how we connect with the marketplaces, indeed the new power to use your word or the source of sustained competitive advantage, and that’s a powerful vision, but it’s quite amorphous and there’s responsibility on you and the leaders to make that concrete, right?
Aiken: That’s exactly right. Outbehave is your word Dov. I picked it up from you, but then I’ve had to internalize it and understand what it means for us. Within our company, it means our leaders outbehaving and making certain that we’re supporting our sales force with everything they need to be successful. They feel that connection and that energy and that then inspires them to go outbehave in the marketplace and connect with customers in the same way. You can’t expect your sales force to outbehave if you as a company and your leadership aren’t outbehaving in your support of them.
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