August 5, 2021
TPL Insights: Building Peak-Performance Cultures #79 – Building a Powerful Employment Brand, Part 2
With paraphrased content from our interview with Chet Cadieux in August 2014
QuikTrip has one of the most powerful employment brands on the planet, and their employee feedback program is integral to its success. Employees receive frequent feedback, most commonly through anonymous electronic evaluations by their coworkers. QT does “360-degree” evaluations in which employees are evaluated by those directly above and below them to ensure fair and accurate evaluations. Apart from formal reviews, employees consistently give one another feedback. “If someone’s performance slips, the first thing we do is to have a conversation to see how we can help.”
QT reimburses college tuition up to $4,400 per year. It has several employee development programs in place, including a mentoring program for new supervisors, career counseling services and one-on-one meetings between store managers and employees every six weeks. The company makes it a priority to promote from within. To help employees learn the skills they need to succeed, QuikTrip offers free, onsite college courses in collaboration with a local community college. All of these perks are extremely rare in food retailing and near non-existent in C stores.
I’m amazed when I visit a QT store and the clerks on duty actually know what’s going on in the company. They know how many stores the company operates, how many they’re about to open and which markets are being opened. Chet communicates everywhere he goes; “Here’s the play and here’s how we’re going to win.”
Hard charging QT employees share five core values:
Be the best. We want to be the best at everything we do. We are dead serious about it. If we can’t be the best, we won’t play. Chet says that at this point, QT IS the best at selecting the right people, choosing the right locations, fuel, and fresh food. There are many things they’re great at and are still striving to be the best.
Like Southwest Airlines, QuikTrip takes costs out of the business where the customer can’t feel it. Chet’s father, Chester, worked like crazy for better than a decade to develop the highest quality fuel products while building the best possible supply chain for his fuel products, pushing their cost of goods down and their ability to be ultracompetitive up. QT’s gasoline is now recognized by customers in their eleven major markets as the highest quality, best value fuel available. The net result is a bullet proof brand at the lowest price with very healthy margins.
Everything is systematized. All hiring is centralized but training is customized to the individual store. Every store is near identical. Another parallel to the Southwest Airlines practice of flying one aircraft.
Never be satisfied. We have institutional paranoia. If we aren’t scared every day, someone will knock our block off. Mostly fear of a competitor we haven’t seen yet. Even though QT has the most modern and consistently merchandised store network in the industry, they continue to push the envelope. In 2010, they began experimenting with a third-generation store which is 20% larger than the standard, with expanded coffee bars, premium beverages, and fresh foods. The new concept has been wildly successful and incremental premium coffee, smoothie, ice cream sales actually exceed cigarette sales, a category that has been in sharp decline for over a decade. Chet is constantly in front of large groups of store employees congratulating them for a job well done in one breath and encouraging them to push to be better, to understand and adapt to the present and future needs and desires of their customers.
QT differs from other convenience stores by offering fast and friendly customer service and meticulously clean stores and facilities, compelling many customers to pass multiple competitors and make left hand turns across traffic to shop QT. Store layouts are designed to help customers find products as quickly as possible. All stores have the same layout and the same merchandise, so no matter what QT store customers visit, they find the same products in the same places. Customers have also fallen in love with the absolute faith that regardless of which QT store they visit, whether it’s in Tulsa, Dallas, Atlanta, Oklahoma City or wherever, they will have a very pleasant experience while interacting with friendly, enthusiastic store employees.
Consistency in speed, friendliness, product offerings, and cleanliness is another source of differentiation. You can go into any QT and get the same amazing service. Competitors try. They can copy QT’s layouts and products, but they can’t copy their purpose, culture, commitment, and consistency. QT has developed a number of protocols and safeguards to ensure consistency; two of the most effective were its daily activities worksheet (DAW) and its mystery shopper program.
The DAW is a tool that helps managers on each shift ensure that everything gets done. The DAW is divided into three sections: register time, tasks, and upkeeps. For each shift, the manager prints and posts the DAW, which communicates what needs to be done and when. When an employee completes a task or upkeep, he or she initials the worksheet, allowing everyone to see which tasks have been completed. Managers can assign jobs to specific employees or simply post the DAW and trust that employees will complete all jobs at their own pace.
The DAW also helps with staffing. QT tracks how long each type of register transaction, upkeep, and task takes and combined these data with forecasted traffic and sales data to determine staffing requirements in hourly increments. For example, QT knows that each cup of coffee sold takes five seconds of labor to ring up when paid for with cash and ten seconds of labor when paid for with a credit card. Based on these estimates, store managers know how much labor is needed on each shift and construct schedules accordingly.
QT invested in developing its own mystery shopper program to evaluate each store’s customer service. Mystery shoppers evaluate every element of customer service—employee appearance, store cleanliness, and merchandise—based on standards developed from customer feedback. An employee’s bonus—amounting to approximately 10% of his or her pay—is based on the store team’s performance for the mystery shop.
Until 1995, the customer-service standards were set in the boardroom by a board of directors. Now, the standards are based on what thousands of QT’s customers say. The average mystery shopper score for QT stores is 94%, with a very small standard deviation. QT’s mystery shoppers routinely “shop” a competitive set across many channels. The competitive set includes Chick-fil-A and McDonald’s fast-food restaurants, Hy-Vee and Kroger grocery stores, Walgreens and CVS pharmacies, Wal-Mart, and several convenience and gas stores including Shell, Chevron, Exxon, RaceTrac, Casey’s, Kum and Go, and 7-Eleven. The most recent composite average score for the competitive set was 76.1%. The best score in the competitive set was 85% (Exxon) and the worst was 61% (7-Eleven). Wal-Mart and McDonald’s scored close to average. QT employees are well aware that the systems that their employer utilizes are all engineered to support the company’s purpose, to provide opportunities for employees to grow and succeed. This awareness is one of the primary reasons QuikTrip has one of the world’s most powerful employment brands. Stay tuned for Part 3 next week.
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Consultants in Retained Search & Leadership Advisory