Premier’s The Royal Bank of Scotland Business Studies,
Economics Scholarship
Lessons learned from successful
businesses
Robyn Menkes
St Leo’s Catholic College, Wahroonga
Sponsored by
Aim
The aim of the study tour was twofold:
1. To study the leadership of major successful businesses that have engaged in practices
that endear themselves to all key stakeholders. The CEO and key leaders of Trader Joe’s,
Patagonia, Maya Inc and Access Capital will be interviewed as to how their leadership
has lead to the success of their respective businesses and
2. Undertake an in-depth study of the operations of the Patagonia factory located in
Ventura, Trader Joe’s operations in various stores and the Maya factory located in
Pittsburgh. These case studies will be developed using the NSW Board of Studies
syllabus as the guide.
Rationale
Today the measure of a business’s success is often based on the profit or “bottom line”. Over
the last century businesses have been employing strategies that emphasise the increase of profit
by cutting costs. This is a commonly held principle of running a successful business.
“The consciousness that has ruled businesses over the part two centuries is rooted in
classical notions that reason is superior to emotions in the affairs of people. This has
reduced stakeholders ….to largely bloodless statistical entities”.1
However recent research2 suggests that the relationships that are developed by the leaders of the
large corporations are having a much larger impact on the success of the business. Sisodia et al
conclude that “enduring behaviour by a company toward its stakeholders is one of the most
decisive competitive differences ever wielded in capitalistic enterprise” 3
For companies to survive in the 21st century thinking needs to change. Daniel Goleman4
provides data from studies of more than 500 organisations showing that self confidence, self
awareness, self control, commitment and integrity are factors that lead to more successful
employees as well as more successful companies. It is this premise that I wish to explore through
interviewing the CEO’s and employees of the nominated companies Fullan5
I visited a number of companies and organisations. From each visit evidence was gathered about
the successful practices of the business itself and the key leaders of the business.
PART A: Leadership
I had the opportunity to attend the Great Places to Work Conference in Denver which drew 750
attendees from 18 countries and 75 people from outside the USA.
The theme of the conference was based around “trust”. Those who attended had the
opportunity to discuss, share ideas and take away new insights into the running of successful
Goleman Daniel, Working with Emotional Intelligence
Sisodia, Rajendren S. Sisodia, Rajendra, Wolfe, David B. Sheth Jagdish N. Firms Of Endearment: How world class
companies profit form passion and purpose.
3 Sisodia, et al page 43
4 Goleman,
5 Fullan Michael, The six secrets of Change 2008 Jossey Bass
1
2
businesses. “A great place to work is one where you trust the people you work for, have pride in
what you do, and enjoy the people you work with.”
The trends that leaders today need to be aware of and address are:
1. Changing boundaries and borderlines
2. Choosing your adventure – employees need to see how their “adventure” will be created
and enhanced by working in that organisation
3. Water cooler in your pocket – the work place practice of employees gathering around the
water cooler or coffee machine to discuss issues, work practices etc has now been
replaced to some degree by the Smartphone – the “water cooler in your pocket”.
Many successful businesses are grappling with developing trust. How do you develop trust in an
organisation that has 32,000 employees worldwide as Goldman Sachs does? According to Eileen
Dillon (CEO and Global Head Internal Communications Golman Sachs) it is by providing
information that is authentic and meaningful. Digital media is used and the most recent example
is a Voicemail from the CEO in Japan. Nancy Altobello from Ernst & Young says that
employers need to be proactive in the business and getting to know the employees, developing
teamwork, integrity and trust. She went on to say that particularly for young employees they need
to see how they are important to the business - ie personalising the work experience.
Developing leaders is one area that is important to us as educators both within the classroom
and within our respective organisations. It is through rewarding success and dismissing people
who exhibit unacceptable behaviour.
Tony Heish (CEO Zappos) was very clear in his vision for employees of his company.
Prospective employees must not only have the necessary knowledge and skills but they must also
fit into the Zappos culture. He tells the story of how after a number of interviews the interviewer
then goes back to the driver of the shuttle bus who brought the prospective employee to the
office to ask how he treated the driver. Not all attributes of a person can be found out through
interview questions.
Many successful businesses have a very small staff turnover, for Robert W Baird and Co their
turnover is 4.7percent compared to the industry average of 16 percentt. By developing a great
culture in the company quality people are attracted to join. On average this company has 200 –
300 applicants for each job. Between eight and 12 applicants might be interviewed for an
advertised position. A great culture will also mean that talent is retained, more productivity and
higher profits. Flexible work hours and working conditions are common and also promote staff
retention.
In many successful companies there is a movement away from the “I” culture to the “we”
culture. This is carried through to the physical environments of the workplace. Many offices
today have open offices and smaller individual work areas and more meeting rooms and areas for
collaboration and discussion. Barbara Armstrong of Kahler Slater spoke about the workspaces
that her company designed. Company values are exhibited in entry foyers and in the work areas.
Ethics resource centre
Published every two years, ERC's National Business Ethics Survey (NBES) is the nationallyrecognised barometer of workplace ethics.
I met with Moira and Nick (Senior Vice President and her senior research associate).
The Centre began in the 50s as a result of the immigrants coming into the country and the
trouble businesses were having in dealing with the different cultures. This developed into a
consultancy assisting companies to deal in an ethical way. Since the 1960s the ERC has worked
on ethics and charted the changes that society and businesses have faced in terms of ethical
climate, major ethical dilemmas and business ethics development.
The prime focus of the work that the ERC does today is research. The current research is on the
cutting edge – looking at how social media is impacting on the working environment. The
Centre is involved in researching the next question for businesses – the impact of social
networking on company’s image.
The ERC has written curriculum for high and middle school students training as leaders in the
program. This is aimed at giving the students the skills to identify issues, develop strategies to
meet objectives and work collaboratively to meet the goals. In addition the ERC provides
resources for teachers in the form of scenarios, information, websites, discussion starts and
lessons. The third function of the curriculum is the involvement of local businesses with
individual schools or by networking with students to discuss business ethical dilemmas.
PART B: Companies
Patagonia
Throughout the visits to the Corporate headquarters, factory and stores across the United States
the mission statement “Build the best product, cause no unnecessary harm, use business to
inspire” was lived out by the employees and the company. The tour of the factory and
headquarters in Ventura California was a testament to the company values.
Building the best product
Providing customers with quality products and benefiting the environment drive the company.
The products are “durable, timeless and multifunctional”. All come with an iron clad guarantee.
When I visited the Ventura store I saw a woman return a jacket that had a broken zipper. She
said that it was an old jacket and that they may not be able to fix it. The store manager (Dave)
assured her it would be fixed, brought the jacket over and showed me that it had been purchased
11 years ago!
Patagonia also minimises environmental damage by sourcing fabrics that are environmentally
responsible. The company even develops its own fabrics if needed. Recycled polyester,
organically grown cotton, recycled nylon, hemp and Tencel are used.
“Fair labour” standards are used as guiding principles. Over the last ten years a number of
factories have not had their contracts renewed because of their work practices .
Causing no unnecessary harm.....
This part of the mission statement focuses on the manufacturing and delivery of the products.
The company acknowledges that these processes do have an impact on the environment but
their philosophy is to minimise this impact. As a result the company began using organic cotton
in 1995 and introduced recycled polyester in 1993. A mini website has been developed
(footprints chronicles) which informs the public of the environmental impacts of Patagonia
products: (http://www.patagonia.com/us/patagonia.go?assetid=23429)
At the Ventura corporate headquarters there is a subsidised kitchen that provides organic food
to the employees sourced locally and, where appropriate, organic. Again this demonstrates the
company living out its mission statement. The furniture in the company meal area is made of
locally grown plantation wood. The employees are involved in sports and environmental issues.
Chris Bell ( Chiper Bro _ often the face of Patagonia) has worked for the company for many
years and in the summer months he has leave to run his surf school business. This is not an
uncommon phenomenon – many employees are encouraged to pursue their sporting interests
and environmental interests. Many are encouraged to become involved in these projects and are
given leave to follow these pursuits; indeed, in some cases the company subsidises them.
Use business to inspire and implement solutions to the environmental crisis
Patagonia is encouraging other businesses to become environmentally aware and implement
processes and policies to reduce their impact on the environment.
When you visit each store you find a “Voice Your Choice” area which has the three local
environmental groups vying for the Patagonia donation.
People who work for Patagonia tend to be “overqualified” for their particular position – such is
the demand for a job at there. For instance the Store Manager of the Ventura store has a
business administration degree.
At the Ventura headquarters solar energy is used – the solar panels are used also as
shade/protection for the cars in the carpark. Employees are encouraged to car pool and special
car spots are kept for these cars. The child care facilities are important for the employees and
their children.
There is a recreation area that has free weights and a teacher of yoga comes in to run classes for
which employees pay a nominal fee of $2.
The tin shed which formed the original building is still used at Ventura – the outside is still the
same as in 1972 when the company began – a constant reminder to all that of the foundations of
the business.
Little expense is given to advertising - as the company believes that the product is the important
aspect. The product will sell itself if it is of high quality made from environmentally friendly
materials. Even the product brochures are used to promote environmental issues. The Spring
2011 issue articles on “The Call” (climbing) great places to climb, Patagonia’s Water Challenge
and Mud Sickness are examples.
The people I spoke with stressed the importance of the relationship between the employees and
the company.
Trader Joe’s
The first Trader Joe’s Store was located in Pasadena. When I visited the store I was struck by its
relatively small size. 80 percent of the products in the store are sold under the Trader Joe’s name.
Although there was not the wide variety of brand names in the store the prices were considerably
cheaper than at the larger grocery chain store close by.
Trader Joe’s brand was cheaper than other brands stocked in the store. Messages were displayed
indicating that the food was locally produced or sourced, even the wine. One unique feature of
Trader Joe’s stores is the use of a bell. If a cash register attendant needed service from a crew
manager they simply rang a bell (similar to a ship’s bell) and the manager would come to their
assistance. The Hawaiian shirt is a customary form of outer garment worn by the employees in
the store as well as those at Corporate headquarters.
The employees I spoke with all knew the history of the business and talked proudly about why
they loved working at Trader Joe’s. Many who work there are part time workers who are
generously paid, including contributions to retirement plans. Comments from employees
included:
“I just love the food”
“ I always feel good when I come to work”
“The people I work for are great – they really do care about you as a person and what is
going on in your life”
“Dan (Bane – CEO) is a great guy - he is often in our store just walking around, helping
out and talking to people”
“When Dan first came to the store I didn’t know who he was – I just thought he was a
customer and needed help finding some food. He asked me what I thought about
working here. He was genuinely interested in what I had to say”
Even New York employees knew the company history and the values.
Speaking with Dan Bane – CEO and Chairperson of Trader Joe’s at the headquarters in
Monrovia was one of the highlights of the study tour. Here was a CEO of a large company who
is acutely aware of the ins and outs of the company. He has little need or use for secretaries to
organise his schedule, although he does use the services of the office administrator at times. The
office administrator oversees the corporate headquarters and is not solely working for Dan Bane.
Even before entering the corporate headquarters at Monrovia I was unsure if I was at the right
place as there was no signage indicating that this is the headquarters of a large successful
company. However on entering the single level building it and seeing the rack of Hawaiian shirts
I knew I was at the right address.
Dan Bane has been the CEO of the company for 12 years. Prior to this he was one of the
Regional Directors of Trader Joe’s. He says that he has built on his predecessors work and
developed the values guide in the early 2000s. It is important to Dan that all the employees are
guided by the Values Guide which he developed in their work.
For most people, shopping is a chore. Trader Joe's makes it recreation.
Maya Inc
Maya Inc is located in Pittsburgh and was named as a Great Place to Work in 2010. The
company is a design consultancy and technology research lab.
I met with Mick McManus – the CEO and President of MAYA Inc and Terry Pronto – Head of
Human Resources as well as members of the Luma Institute which is an offshoot of Maya and is
involved in curriculum development.
Mick works on how we can use the human thinking process to utilise the technology that is
available. There are about 35 people working in the firm, either as researchers or product
designers. Work areas are flexible and designed around the projects that are being developed.
Each project has a set community in a designated area with a “mayor” overseeing the project.
70 percent of the business is focussed on the product design the other 30 percent is devoted to
research. When there is a high demand for product design the researchers are able to assist and
vice versa. This allows for better communication between the two groups and fosters empathy.
Terry developed the “Bring children to work” policy and the “Assistance to higher education”
program. There were initial objections raised by other members but they agreed to a trial. The
policy was so successful that it is still practised today. One of the unseen benefits of bringing the
baby to the workplace was that the child had a calming influence – something that no one had
envisaged. This practice is ongoing today.
I discussed the leadership qualities of Mick and the influence he has on the culture of the
workplace. One of the initial things that Mick instigated was to meet with every employee of the
company for an hour when he joined the company as CEO. He was learning what they liked and
didn’t like about the firm, about the firm, their personal goals, likes and dislikes.
Mick is a working part of the teams believing that this is an important lesson for CEO’s to learn
and experience. This then allows them to have empathy with their employees. It also allows
employees to see their leaders take risks and to fail..
Since the company was named as a 2010 GPTW Terri has had to change the way she hired
young people. Such was the demand for jobs in the company that she was unable to use the
traditional HR recruitment methods. The quality of the applicants is outstanding but what the
company now looks for is not only the educational qualifications and the products (via their
portfolios) but also the processes they went through to create the product. This became such an
important part of the HR area that a new company has been developed based on curriculum –
the LUMA Institute - which aims to” help organizations and individuals (from K through CEO) learn and
leverage the practices of Human-Centered Design. Our services help businesses, schools, and government enlist
design to drive innovation and make things better”-(Maya website).
Access Capital Advisers– Tom Snow
Access Capital Advisers is an independent asset adviser company that has over 70 staff and over
50 investment professionals across five offices and three continents. With a relatively small
global staff the company is the seventh largest infrastructure manager in the world entirely
owned by the employees. Clients include institutional investors such as governments, corporate
and industry investors.
I interviewed Tom Snow who is a Partner, Director and Head of Infrastructure Australasia. Tom
is relatively young to have such an important role within the company; however he has an
extensive academic record including being a Rhodes Scholar. Tom is a quiet leader who has a
strong work ethic.
Employees of ACA are highly experienced and educated. Tom explained that, to be in this
business, it is essential to be highly qualified. The role of educational institutions is paramount in
providing employees that are highly educated. He also outlined the change in the hiring of
graduates over the course of the company. Whereas in the first instance the company was
focused mainly on the academic qualifications of their prospective employees it has become
apparent that this, in itself, is not enough to be a successful employee in the company. The “fit”
of the employee to the culture of the company is now becoming more important. Skills such as
working as a team, taking initiative, working ethically are recognised as essential to the ACE “fit”
and, with the relative small size of the firm, it allows for the development of an inclusive culture
where each employee is offered a fulfilling professional and personal career.
There are eight core values of ACE: innovation, seeking challenge, integrity, ownership, respect,
teamwork, trust and excellence. Employees undergo performance reviews twice a year as well as
annual salary reviews.
Like all the companies and CEOs interviewed the work/life balance was a major issue for ACE.
Employees are at the core of the success of the company so specific strategies have been
implemented to highlight the “other” areas of a person’s life. Flexible working conditions have
been implemented where appropriate and regular social and sporting activities are organised.
Summary of key learnings from the study tour
1. There is no one set style of leadership that will result in a successful business
2. There are a number of qualities that each successful leader has.
3. There is a growing movement toward teaching ethics in business schools and as
educators in schools we need to be aware of this and incorporate it into our curriculum
4. Companies are not only interested in the knowledge that young people have but their
skill set, problem solving skills, interpersonal and collaborative skills, research skills and
their values and ethics.
5. Successful businesses mean a successful society – if businesses act ethically and develop a
great culture within the organisation then society will be a better place.
6. Culture is just as important as the brand for successful companies.
Specific resources and case study material are being developed that may assist teachers in the
implementation of the new Business Studies syllabus. Please email for further details:
robyn.menkes@ceosyd.catholic.edu.au