Leaders & Laggards | October 2017

Leadership Leader

Our leadership Leader for this month is Charles Butt, CEO of H-E-B groceries, headquartered in San Antonio Texas. Intensely private, alas, we have no photograph we could use.

H-E-B is one of the largest privately held companies in the country, and certainly the largest grocery store in Texas and northern Mexico. With almost 100,000 employees and revenues exceeding $20 billion, their size is nothing to be trifled with. H-E-B was on Amazon’s radar before they made the decision to pursue whole foods. They’re ranked #3 in the nation for grocery stores, and #12 among all retailers.

All of that, however, is not what made them this month’s leader. No, it’s all the other stuff…

First, something close to home. Charles Butt but made a personal donation of $5 million to the JJ Watts Foundation for Houston Flood Relief, and the H-E-B Corporation provided monetary, material and volunteer support to victims of hurricane Harvey since the storm began. Charles Butt and his family donated an additional $1 million, in memory of their late patriarch, Howard E Butt, Jr., to help people recovering from the storm’s damage. H-E-B employees felt it was a badge of honor to be at work during hurricane Harvey.

The H-E-B mobile app frequently trends as one of the most popular on both Apple’s Store as well as Google Play. Think about that—a grocer, focusing almost entirely on just Texas and Mexico, is trending nationwide with their mobile app. Take that, Amazon!

They know how to hire at H-E-B as well. And before you chuckle too hard, realize most organizations do not. Not really, anyway. Their hiring practices were singled out by researchers from Harvard Business School for “looking beyond the degree” in their hiring practices. Take a look at their career page, and you’ll notice some differences from many others, particularly retail. Discussions around development, career paths, and expectations… all integral to their obvious success.

And don’t forget the hoochies! Apparently H-E-B also carries (or somehow causes) hoochies.

So, hoochies notwithstanding, Charles Butt and his H-E-B stores are an easy winner for October’s Leadership Leader.

Leadership Milquetoast 

We like some of what we see CEO Brian Cornell doing for Target to keep it from going the way of other defunct or dying box stores. How’s that for equivocation?

Cornell is leading Target through a $7B investment in remodeling old stores, opening new small-format stores in high-traffic urban areas, (thankfully) fixing a supply chain notorious for leaving shelves bare, and upgrading its e-commerce platform. His style is data-driven and hands-on, his outlook for Target is upbeat, and investors seem to be responding.

But not everything thing Cornell has done as CEO is puppies and rainbows. Target’s investors enjoyed his first year, rode through a bumpy second year, and suffered during his third year mainly because it’s been a “follow the leader” strategy that will never get Target to the front of the pack.

Target has not kept up with the Joneses – or Amazon and Walmart in this case – and is pumping money into neglected areas to catch back up. That strategy will work out well if everyone will just stop moving forward.

Take e-commerce, for example. Target is trying to introduce on a wider scale next-day delivery for a price, and same-day deliver for a premium. That means for those with plenty of money, you don’t have to wait or worry when you run out of diapers and toothpaste. Sorry, we’re not impressed.

Investment in existing stores and the supply system? It’s about time. And the small-format stores are likely to be very popular in the right locations, but Target will pay a premium for the footprint and stocking each store differently to meet local demands. We’re not that fond of trying to be everything to everybody.

Still, we like Cornell’s focus on listening to what the customers say – personal visits to customers’ homes is a nice touch, we like his enthusiasm, and we like keeping the shelves stocked. Cornell knows Target has to evolve to be competitive and is leading in the right direction.

But as we’ve all been taught, evolution is a very slow process. We’re looking for innovation here, not imitation. Until we see something different, Brian Cornell gets lumped in with the other mediocre CEOs as this month’s Leadership Milquetoast.

Leadership Laggard

We’ve written about this before, but indecision kills… and Roger Goodell is killing us.

Warning: if you disagree because of your politics, you’ve missed the point. 

In his carefully worded memo to NFL franchise Chief Executives and Club Presidents this month, NFL Commissioner Roger Goodell nimbly danced around the current NFL players’ protest issue(s), but he offered absolutely nothing as a way forward. He did offer his opinions, but you know what they say about opinions being like assholes…

My opinion is that he should make a decision befitting the leader of an $80B organization. Goodell has been making over $34M a year to lead the 32-franchise league, worth an average of $2.5B each, but he’s failed to do anything with his indecisiveness over the last year except make things worse. And it seems like each week, another owner steps in it.

His “I think they should stand during the National Anthem, but it’s okay if they don’t” stand is weak. We don’t care which – they have to stand, or they don’t – but until Goodell leads the franchise executives (who are also making bucket-loads of money) in charting a new course, the NFL will continue floundering like a rowboat in heavy seas.

The players have something to say – hell, we all do – and Goodell doesn’t want them to do it during the National Anthem. What alternative has he given them, besides the “to protest, or not to protest” option? That’s all the commissioner and franchise owners could come up with?

Come on, Roger… LEAD THEM! Get your wishy-washy, politically correct opinion out of the middle of the road and get this league headed in the right direction again. Until then, welcome to the club; you’re this month’s Leadership Laggard.

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