The Pantry's 'Ownership Culture'

New training, hiring initiatives aim to cultivate motivated workforce

Angel Abcede, Senior Editor/Tobacco, CSP

[Following is the second installment of a three-part series examining The Pantry's effort at both an internal and external transformation. Today's focus: culture change. See the January 2011 issue of CSP magazine for the complete story.]CARY, N.C. -- The year 2011 will be a pivotal one for The Pantry, witnessing not only the degree of success of its Fresh Initiative--a transformation of the chain's Kangaroo Express c-store model--but also the establishment of a new company culture.

Keith Oreson, who joined The Pantry as senior vice president of human resources [image-nocss] from Advance Auto Parts, a nationwide chain of aftermarket auto part stores, in June 2010, described the previous store culture as "keep your head down, don't take on risks, just do your job." He is tasked with developing an ownership culture, one where employees treat the company as if it is their own business.

It's a "big shift" in thinking for The Pantry, Oreson acknowledged, and one that "really starts at the top," with The Pantry's senior management team, led by president and CEO Terry Marks. Its progress will also be arguably tougher to measure and direct than the transformation taking place across the chain at the store level.

"It'll happen organically over time, and it's not something you can will, and not something on which you can put out an edict," Oreson told CSP Daily News. "Through our actions--the senior leaders of the company--consistency will breed believability."

Larry Wilson, consultant to Fortune 500 companies on cultural change, said that to be successful at such an internal transformation, companies such as The Pantry must empower employees, and give them the chance to use their own creativity and voice.

"You want the leader to facilitate an open culture and have the problems and rewards to be able to be figured out by employees, much more so than people at the top," Wilson told CSP Daily News. "It's a hugely important change process, but it will never work in a command-and-control, fear-based culture."

To begin that empowerment process, The Pantry is taking several concrete steps at revamping its approach to the human side of the business in 2011, running the gamut from hiring to firing. They include:

Hire best talent. A new "director of talent acquisition" will develop strategies to improve sourcing and hiring new executive and managerial talent. Recruiters will go into the field to directly support management training. In the past, an applicant would fill out a paper application in the store, and the store manager would interview them with an often outdated interview guide providing the questions. Now, an online assessment tool from PreVisor Inc., to be implemented in first-quarter 2011, will allow The Pantry to screen store-level applicants for cultural fit, before they reach the interview stage.

The qualities the retailer is screening for include being friendly, outgoing, and showing a strong desire to serve customers. Here, managers are following the mantra of hire for ability and train for skills.

Accelerate training and development. A new e-learning system that can be deployed to stores will provide interactive training programs for store-level associates. The company is revamping its classroom store and district sales manager training, and has developed the capability to deploy just-in-time training for program rollouts, including the new CARES Planner workforce management software and KSS PriceNet fuel pricing software, both debuting in early 2011.

"The idea is, when this stuff is hitting stores, we're providing training in a timely fashion, and in a manner that we can ensure effective implementation, and it's ultimately sustainable," said Oreson.

Engage the team. Development plans for high-potential employees who are eager to advance in the company will provide them a path to move forward; 80% of the plan involves on-the-job experience that will help The Pantry achieve its business objectives while the employee is able to stretch into new skill areas. For example, a promising store manager may be given oversight of the rollout of the Fresh Initiative into a new district. "It's going to demonstrate to the organization that we're really committed to helping people get to the next level," he said.

The company has also revamped its incentives for 2011, with the goal of simplifying the bonus plan on two metrics that store managers can control: driving merchandise sales and profitability. The maximum amount earnable under the bonus plan has also grown 50%.

Assess the bench. By the end of January, The Pantry plans to have completed a talent review process, where each upper-level manager will assess how well managers down to the store level have met their performance targets, and whether they did so in a way consistent with the Kangaroo Express values--the "what and how," as Oreson described them. Each manager will be plotted on a "9-box" grid--also known as a "performance and potential matrix"--to determine their leadership potential within the company.

Those who rank well will be earmarked for promotion and get a development plan to earn it. Management will have "conversations about" those who rank low, and determine whether they simply need more help or are not a cultural fit. The assessment will at first apply to management down to the store manager level, although it may later be extended to assistant store managers and even store associates.

"It becomes a foundation to assess our bench strength, and then to begin planning to not only develop and/or improve the performance of our people, but then to put together plans to address our workforce needs going forward," said Oreson.

Angel Abcede, CSP/Winsight By Angel Abcede, Senior Editor/Tobacco, CSP
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