The Power of Employees
The case of the supermarket chain Mercadona is a story of huge success due to multiple reasons which I will not elaborate in full detail since I want to concentrate on one of the key success factors: their employee management.
In
this chapter I would like to highlight the importance that employees play in
order to build a wow brand. We all know the global examples of strong corporate
culture that have a positive impact within the brand such as Google and
Facebook where employees embrace the brand as being part of a family to an
extreme where private and professional life are no longer differentiated.
Now
I would like to take you through a local Spanish example that a friend has been
following since years and which he considers to be a wow brand.
But
first let’s see several key facts of this story:
·
Mercadona is a Spanish family owned
supermarket chain founded by Francisco Roig and his wife in 1977 which began as
a small butcher shop in Valencia expanding nationwide since to more than 1.148
stores holding 14% of Spain’s total food retail space and reporting more than
€508 million in profits for the 2012 fiscal year
·
Despite Spain’s recent economic crisis beginning in 2008,
Mercadona hired more than 4,000 workers in 2012 and is one of the few Spanish
companies to profit during this period
·
Mercadona has a marketing model that does not spend capital
resources on advertising or market campaigns and adds yet another method of
cutting costs. It instead relies on word of mouth and free social media to
promote and maintain its brand.
·
Mercadona employs more than 70,000 workers, all of whom are
under permanent contracts. Upon hire, workers are required to complete four
weeks of training, costing the company an average of $6,500 per employee.
Employees must also go through twenty additional hours of training each year.
·
Employees receive salaries above the national average of workers
in the grocery store industry and the majority of employees receive a bonus
each year:
Ø
In 2011 223mn euros were given to employees as a bonus
·
Leaders of Mercadona believe this combination of training and
payment creates employees who are dedicated and flexible when it comes to
meeting customer needs. It is also believed to have helped the company to
maintain a relatively low level of only 5% employee turnover in 2012.
·
Mercadona does not open Sundays were legally allowed in order to
offer its employees a balance of work and private life.
·
The company also has a policy of internal promotion. All general
management positions have reached their positions within the company.
·
Absenteeism rate is 0,7% versus the national 6% average.
·
Mercadona was ranked the 9th most reputable company in the world
in 2009 by the Reputation Institute as listed in Forbes Magazine.
As
per the facts above mentioned we can see that Mercadona relies heavily on word
of mouth marketing and creating a strong employee - corporate brand (Mercadona) culture via the following
mechanisms:
1. Aligning People-Brands
Internal trainings, immersion programs about the brand/company. Making everyone understand what is the brand/company’s core essence
Internal trainings, immersion programs about the brand/company. Making everyone understand what is the brand/company’s core essence
2. Activating attitudes and behaviors
This is the most important for the Mercadona brand. Its values and personality can’t just exist in a training guide or hanging in the wall of a meeting room.
This is the most important for the Mercadona brand. Its values and personality can’t just exist in a training guide or hanging in the wall of a meeting room.
Formulating
attitudes and common behaviors of employees in their daily job lives, in their
routines is fundamental to create a common work spirit in the organization.
3. Reward Culture
The company has systems that reward employees towards promoting
the best practices, attitudes and behaviors in benefit of the Mercadona brand
(which is not a standard practice in the retail sector, especially amongst
lower educated staff)
4. Community
Acknowledging the importance of integrating employees as active members of the communities that surround the Mercadona brand. Who would know more in a community about the Mercadona brand and who would defend and prescribe the brand better than an employee?
Acknowledging the importance of integrating employees as active members of the communities that surround the Mercadona brand. Who would know more in a community about the Mercadona brand and who would defend and prescribe the brand better than an employee?
5. Measuring and tracking
Creating programs that measure the attitude and behavior of the Mercadona brand within its employees and linking it to the bonus scheme.
Creating programs that measure the attitude and behavior of the Mercadona brand within its employees and linking it to the bonus scheme.
Mercadona
is aware that competitive advantages within the retail sector are minimal and
that the key is “how” to communicate the brand through the human capital of a
company.
At the end of the day brands are the people that manage them, and the people that manage brands owe themselves to their brands
https://www.mercadona.es/ns/index.php?nidioma=5
https://twitter.com/Mercadona
Great insights on how we can create and drive employee leverage to build great brands
ReplyDeleteVery interesting case to explore how the employees could guarantee a big upgrade on the company results, giving to them freedom with responsibility to act as truly owners of the business.
ReplyDelete