Management style fosters efficiency, rapid growth

October 18, 1990|By David Conn

On paper, Bill Marriott is a retailing whiz.

He opened a 56,000-square-foot supermarket in Columbia last year, a store whose 200 employees sell everything from carrots and carnations to laxatives and live lobsters.

Almost from the opening day of Giant Store 203 in the Dorsey's Search Village Center, sales were strong: $675,000 a week. The store should take in $35 million this year, and it was profitable only a few months after it opened.

On paper, Bill Marriott is retailer of the year.

But in the store he has very little decision-making authority. He cannot, for instance, choose which brands of potato chips to carry or move the produce section to the back of the store. If the Valu Food down the street is offering Ghostbusters Slimer Fluoride Bubble Gum Toothpaste Gel for 10 cents less, it's not up to Mr. Marriott to match that price. And he can't decide to close the store early so his people can head to 33rd Street for the Orioles' opening day. At the top of the company, it's just the reverse. Robert Schoening, senior vice president for data processing, recently spent about $7 million on a couple of computer and communications systems, virtually on his own authority. "As it is today," he says, "I'm not asked to explain enough."

This "loose-tight" style of management has served Giant well in its 54 years in the Baltimore-Washington market. The retailer is now the 12th-largest supermarket company in the country, with $3.25 billion in sales in fiscal 1990. Its profit margin -- 3.34 percent of sales -- placed it second among all publicly traded grocery chains and was more than three times the industry average.

But with nearly 27,000 employees, with a market so saturated with stores that new ones are beginning to build sales at the expense of older ones, and with a weaker economy slowing sales growth, the company is meeting challenges it never had to face before.

In a letter to employees recently, Giant Chairman Israel Cohen tried to boost company morale during what he called "trying times." Treasurer David B. Sykes sounded the same note during the company's annual meeting last month.

In an interview, however, Mr. Cohen says he's not worried. He puts his faith in Giant's three biggest assets: "people, people and people."

"Izzy is an involved, hands-on person in the company," says Pete L. Manos, senior vice president for food operations. Mr. Cohen participates in the weekly merchandising meetings and he visits the stores, "but he leaves the operation of the company to the people in the departments." Lassen gehen, as the Yiddish phrase goes. Let 'em go.

"It's amazing how much of Giant's business is conducted in the halls and the cafeteria," Mr. Schoening says.

In the stores, however, very little is left to the imagination of the workers. Mr. Marriott, a 34-year-old Towson State University graduate, has the demanding job of managing his 200 staffers, making sure they properly execute the game plan drawn up at headquarters. But it's not his place to call any plays at the line.

"All we expect from each store manager is to follow instructions," Mr. Cohen says. "You can't have a dummy running a store; he's had 10 years of training before he became a manager." But "what do you want him to do, you want him to come up with an idea of changing the point of sales [cash register system] from what we have now to the new [IBM] 4680? That's not his job. You want him to change a fixture from a top and bottom ice cream as opposed to a coffin [ice cream display case]? That's not his job. You want him to get involved in Superdeals? That's not his job. . . .

"All we're interested in is the execution as it's been dictated by headquarters: clean stores, in stock, service, attitude, atmosphere, courtesy."

The strategy doesn't stifle Giant staffers or turn them into curmudgeons for at least three reasons: The company's rapid growth provides opportunities for advancement; new positions are almost always filled from within the ranks; and Giant treats its people well.

"The Giant Family" isn't just talk, says Alvin Dobbin, senior vice president for operations. "Associates," as employees are known, are encouraged to bring family members on board. At a store opening in Leesburg, Va., a few years ago, Mr. Dobbin asked whether any staffers had relatives with the company. "One woman raised her hand and said she had 37 family members working for Giant," he says.

The company has an emergency aid fund with a more or less optional payback policy that helps out staffers in need. (Mr. Dobbin says people repay the loans if they can.) For example, a checker who was shot and paralyzed off the job received a home renovation to accommodate her wheelchair, and a clerk whose legs were crushed earlier this year when he pushed a pregnant woman out of the way of an oncoming car received a $5,000 check.

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