Everyone who thinks about career fulfillment and success knows how important it is to build relationships. But, as the recent saga of Market Basket demonstrates, building relationships is only the beginning.
You may not have heard of Market Basket, even though recent events there have made international news. Market Basket is a chain of 71 supermarkets located in New England, catering to customers seeking low prices with few frills. The company has been owned by the Demoulas family since its origins in 1916 as a grocery store run by Greek immigrants. However, this is one big unhappy family. Years ago, when the company was owned by two of the sons (George and Mike) of the original owners, each had reputedly promised that their families would be provided for equally, no matter who died first. However, George’s heirs ended up filing a lawsuit against Mike, claiming that he had defrauded them out of their share of the company after George died, and in 1994 a judge ruled in their favor. George’s heirs, including his son, Arthur S. Demoulas, were awarded 50.5% of the stock in Market Basket, and Mike retained the remaining 49.5%. Upon Mike’s death in 2003, that share was divided up amongst Mike’s heirs, including his son, Arthur T. Demoulas.
Despite the acrimony between George’s heirs and Mike’s heirs, Arthur T. Demoulas was elected CEO of Market Basket in 2008. Arthur T. was well-liked by his employees; he paid them well, and he was known for generosities like continuing to pay employees who were too sick to come to work. Under his tenure, Market Basket performed well in its low-price niche. However, the family feud still simmered, and in June of this year, Arthur S. managed to garner enough support to have Arthur T. removed as CEO. In his place were installed co-CEOs, former executives from the supermarket chain Albertson’s and the electronics jugger-not Radio Shack. It was widely perceived that the new executives were brought in to change the basic strategy of Market Basket, by raising prices, lowering wages, and taking on additional debt, all with the goal of maximizing immediate profits to the shareholders.
The day after Arthur T.’s removal, Market Basket employees reacted. Six executives resigned, and about 300 employees rallied against the changes. Within a month, they were joined by thousands of other employees, many of whom went on strike in protest. (None of Market Basket’s employees are unionized.) The strikes by delivery truck drivers proved particularly effective, as many Market Basket locations quickly went low on stock. The new CEOs warned the striking employees that they would be fired and replaced, and that customers who could not get what they wanted at Market Basket would simply switch their loyalties to another chain, so that Market Basket might never recover. In response, remarkably, Market Basket customers who had been forced to shop elsewhere began bringing their receipts to Market Basket stores and taping them to the windows, in a show of solidarity for the striking workers.
I’ve been following this story closely for weeks, for two reasons. First, I remember Market Basket from when I was growing up in Massachusetts. It was the place our family shopped when money was tight. I didn’t realize that at the time; as a kid, I just thought of it as the cheapy-looking store with narrow aisles. With that unselfconscious attention to appearances that comfortable children can have, I was a snob. Thus, I was surprised to discover, when the story first broke, that the family was fighting over a $3 billion company with $4.3 billion in annual sales. Market Basket? I had always assumed that they were just barely holding on. Now I wanted to know more.
Second, I’ve been getting a day-by-day accounting on my Facebook feed from one of Market Basket’s employees. I can scarcely help thinking of this person as the little girl, ten years younger than me, who used to live next door, even though of course she is an adult now. For the last two months, she has been posting about her support for Arthur T. and her frustration at being told not to report to work (since there was no food on the shelves). At one point, she wrote about interviewing for work at another supermarket, but it was clear that she loved working at Market Basket and would be very unhappy about having to leave. And her messages, and the responses to them from fellow employees and customers, made it clear that there was no exaggeration in the news reportage on the story: Market Basket employees really did feel like a family under Arthur T., and they were willing to endanger their jobs to get him back, because they recognized that relationship.
And, finally, this week, the situation was resolved. Arthur S. and his branch of the family agreed to sell their shares in Market Basket to Arthur T. and his branch of the family, meaning that Arthur T. will return as CEO. Employees are jubilant. Customers are pleased. In fact, the media attention and focus on Market Basket’s low prices has won it some new customers – the company, which was losing $10 million per day during the crisis, may actually end up performing better because of it. It’s a just-in-time-for-Labor-Day happy ending that Hollywood could not have scripted any better.
Arthur T. Demoulas understood the importance of good relationships, perhaps because he had also known the caustic effects of bad ones. He did a lot to foster such relationships with and among his employees and customers, and those relationships constituted some of the value of Market Basket. But relationships aren’t kept in a vault, and they can’t be audited. Relationships are less reliable than cash or real estate; they only exist when people believe they exist.
You can’t control what other people believe, but you can certainly influence it, and people are more likely to believe that a relationship exists when they can consistently attribute something to it. When Arthur T. continued to pay his employees more and charge his customers less than he could get have gotten away with, they could perceive relationships with him and with Market Basket. Think about the relationships you would like to believe you have created. When was the last time you gave the other party reason to buy that relationship?