When the Board Doesn’t Care About Employee Engagement – The Market Basket Saga

It’s the case of a CEO who did well by his employees (personable management style, career growth, great pay, profit-sharing, etc.) and, in turn, customers – engendering the loyalty of both. So much so that when the CEO was ousted in a board-level family feud, employees and customers protested loudly — with employee rallies and online petitions by customers to boycott the company  It’s the story of the Market Basket  grocery chain that finds itself in a management and public relations nightmare.

With empty shelves, frightened or disgruntled employees, and frustrated customers, I can’t begin to imagine how much the company is losing in actual dollars, not to mention brand damage.

“Put your staff first, customers second, and shareholders third … then, in the end, the shareholders do well, customers do better, and your staff are happy.” Sir Richard Branson

This win-win-win approach works for StarbucksVirginZappos and many others companies. It’s also a winning strategy of Firms of Endearment that “follow a stakeholder relationship business model rather than a traditional stockholder-biased business model.” Why doesn’t the board of Market Basket get it?

UPDATE: Ousted CEO Arthur T. Demoulas is back at the helm after the company reached an agreement with him to purchase the grocery chain from the family members who fired him.

This quote from a HuffingtonPost article brings it all together: “Most times, CEOs and the company’s business model don’t always align with the employees’ best interests,” said Paul Pustorino, an accounting professor at Suffolk University’s Sawyer Business School. “What this proves is when a CEO can align the best interests of the company with the best interests of the employees, that generates strong employee loyalty and customer loyalty.”


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